Maharashtra awards industry status to hospitality sector

The state cabinet on Thursday awarded the hospitality sector the status of an industry. The decision is expected to help revive the hospitality sector, which is now eligible for various benefits including rebates in electricity charges as well as water and property taxes.

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“Today, the Cabinet has approved “industry status” proposal for hotels in Maharashtra. This is a landmark moment for the hotel industry. After reduction of pre-establishment licenses from 70 to 10, industry status will give much needed support to hotels,” tweeted state tourism and environment minister Aaditya Thackeray on Thursday.

Establishments classified as hotels by the Union ministry of tourism can avail benefits from April 1, 2021. An expert committee will finalise norms for other establishments over the next two months.

Valsa Nair, principal secretary, tourism department, said, “There are 110 hotels, ranging between one to five stars, classified by the ministry of tourism. Since classification is not mandatory, many have not applied. To provide benefits to them as well, the committee will suggest norms which will be finalised by the state. Under these norms, they will have to apply online and after a field visit, further decision will be taken by the state.”

With the status in place, eligible hotels will be charged at industrial rates for power supply, water supply, taxes and dues instead of the commercial rates that are currently applicable. Also, for additional floor space index (FSI), establishments will be charged at industrial rates.

“We look forward to more global hotels coming to Maharashtra, with the state being the easiest to set up business in and the friendliest to run it,” Thackeray tweeted.

State industries minister Subhash Desai said power tariffs at industrial rates would be a game changer for the hospitality sector. “It is one of the sectors that has suffered a lot due to Covid-19. The potential for job creation is huge in the services sector, particularly in hospitality. We want to revive the sector. All the facilities and incentives applicable to industries will now be applicable to hospitality sector as well,” said Desai. He also said that the government expects the benefits received by the sector to be passed on to customers, which in turn would attract more tourists.

Riyaaz Amlani, CEO, Impresario Entertainment and Hospitality and member of the National Restaurant Association of India (NRAI), said the move would be a great boost for the sector. “It is definitely a momentous decision for the hotel industry. We have been fighting for this since over 25 years. Hat’s off to Maharashtra government. First, they reduced the number of licenses and now gave industry status to hotels. As of now, restaurants are excluded from it but we are hopeful that they will also be included soon,” Amlani said.

To attract more investors, the state government approved the ease of doing business policy last month, bringing down the number of licences required to start a venture in the hospitality sector to 10 from the previous 70.