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« New Gurgaon Master Plan Raising Hopes for House Buyers | Home | Property Prices shooting up in Vishakhapatnam »

Govt. stakes on FDI for Growth of Hotels

Hospitality sector is all set to hit the next milestone in the wake of fast flourishing real estate. The sector requires $1.5 billion to add three lakh hotel rooms over the next three years. This encouraged the government to bet on FDI to arrange for the same.

Handsome amount of foreign investments are required in this sector, says Ajay Dua, secretary, department of industrial policy and promotion. According to the data showcased by different surveys, the industry has attracted Foreign Direct Investment (FDI) worth $450 million.

Recently, Federation of Indian Chambers of Commerce and Industry (FICCI), has organized a seminar to shed light on growth prospects of the hospitality sector.

Lack of proper physical infrastructure, corruption, and red tape are some of the major roadblocks blocking domestic as well as foreign investment in hospitality sector thereby hampering its development. Once these are overcome, large investments will flow in. Also, the government is planning to re-visit the foreign equity cap in the infrastructure sector in March and further liberalize the rules and regulations for FDI inflow.

As for now, the hospitality industry has expressed the urgent requirement to develop budget hotels. The tourism ministry is needed to take considerable steps for a 10 year tax rebate for upcoming budget hotels, says Habil Khorakiwala, FICCI President. He further adds that fluctuating taxation norms prevent potential foreign investors from parking in their money in India.

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