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Travel & Tourism; Business & Entrepreneurship

Capital Investment Subsidy for Establishment of New Hotel or Mini Resort of Standard Category

The scheme aims to encourage the establishment of new standard category hotels and mini resorts in Madhya Pradesh. It provides a 15% capital subsidy up to ₹50,00,000/- to private investors and entrepreneurs creating tourism accommodation infrastructure.

Authority

State/ UT

Region

Madhya Pradesh

Status

Verified 2026

Updated

March 2026

What you get

- The scheme offers a Capital Investment Subsidy of 15% against the fixed Capital Investment. | - The maximum ceiling of the subsidy is ₹50,00,000/-. | Conditions | - It is mandatory for the unit to run for at least three years from the date of availing the subsidy. | - The unit must submit a self-declaration on or before the 15th of April every year regarding the continuous operation of the unit. | - If the unit closes within 1 year from the date of receipt of subsidy, 80% of the subsidy amount must be refunded. | - If the unit closes within 2 years from the date of receipt of subsidy, 60% of the subsidy amount must be refunded. | - If the unit closes within 3 years from the date of receipt of subsidy, 50% of the subsidy amount must be refunded.

Who can apply

The applicant must establish a new Hotel or Mini Resort of Standard category.; The applicant must incur a minimum capital expenditure of ₹2,00,00,000/- as approved by the department.; The applicant must ensure the Hotel has a minimum of 25 air-conditioned lettable rooms.; The applicant must ensure the Resort has a minimum of 10 air-conditioned lettable rooms.; The applicant must mandatorily provide employment to 70% residents of Madhya Pradesh for new Standard hotels.; The applicant must submit the application for subsidy within 1 year from the date of commencement of operation.; The applicant must ensure the investment made prior to 3 years from the date of commencement of operation is not included in the capital subsidy calculation.

Required Paperwork

  • Aadhaar Card
  • PAN Card
  • Income Certificate
  • Residence Proof (Domicile)

Common Questions

Is there a strict deadline for submitting the subsidy application form after I have commenced the commercial operations of my unit?

You must submit your application within 1 year from the date of commencement of operation to be eligible for the claim.

Are there any mandatory employment requirements regarding local residents that I must satisfy to be eligible for the capital subsidy?

Yes, to be eligible for the capital subsidy, it is mandatory to provide employment to 70% of the total staff to residents of Madhya Pradesh.

Once I have received the subsidy, is there a mandatory minimum period during which I must keep my tourism unit operational?

You are required to run the unit for at least 3 years from the date of availing the subsidy and must submit a self-declaration regarding continuous operation annually.

What are the financial consequences if I am unable to sustain the operation of my unit and have to close it within three years?

If the unit closes within 1, 2, or 3 years of receiving the subsidy, you must refund 80%, 60%, or 50% of the subsidy amount respectively.

If I decide to establish my tourism project in a distant or ulterior area, are there any additional financial incentives available?

Projects in such areas are eligible for an additional 5% Capital Investment Subsidy, and the minimum investment limit and rooms ceiling are reduced to 50%.

If my tourism unit qualifies for grants under more than one category, can I claim benefits from all eligible categories simultaneously?

No, if a unit is entitled to a grant/subsidy in more than one category, you must choose only one category in which you wish to get the benefit.

I already own an operational hotel and plan to expand it; am I eligible to receive a subsidy for this expansion under the guidelines?

Expansion projects are eligible for the subsidy provided there is a minimum 50% increase in the staying capacity of the existing establishment.

As an entrepreneur belonging to the Scheduled Caste or Scheduled Tribe category, am I entitled to any extra fiscal benefits?

Yes, entrepreneurs from SC/ST categories with 100% ownership of the tourism project are entitled to an additional 5% capital investment subsidy.

Is the subsidy amount calculated solely based on my investment, or is there an upper limit I should be aware of?

The subsidy is a percentage of your fixed capital investment, but it is strictly subject to a maximum ceiling amount specified for your project category.

If I have incurred capital expenditure prior to the actual commencement of the unit, will that cost be considered for the grant?

Expenditure incurred up to a maximum of 05 years prior to commencement is considered valid if the project was executed and operated in one go.

To prove the capital cost incurred on my project, whose certification is required to be submitted along with the subsidy application?

The total capital cost incurred must be certified by a certified Engineer/Valuer, and the total project cost must be certified by a Chartered Accountant.

What specific documentation must I provide to officially prove the date of commercial operation of my tourism unit?

You must provide copies of the first lodging bill, catering bill, bill of service provided, or any other legally acceptable proof to prove the date of commercial operation.

Does my project need to be established within a specific timeframe to qualify for the capital investment benefits mentioned?

Your project must be established and operationalized during the operative tenure of the policy to be entitled to the capital investment subsidy.

How should I submit my application for land allocation or permissions to ensure it is processed correctly by the department?

All applications for land allocation, permissions, and subsidies should be submitted online through the State Government's Invest Portal or Single Window System.