Andhra unveils tourism policy

The Andhra Pradesh government on Sunday unveiled a new incentive-packed tourism policy aimed at enhancing public-private participation in tourism projects and positioning the state tourism as a major revenue generator.

Releasing the AP Tourism Policy-2006 at a press conference here, tourism and sugar minister J Geeta Reddy said the main objective of the policy was to harness its direct and multiplier effect for employment generation and economic growth in the state, besides ensuring balanced regional growth across the state with focus on rural tourism.

"The policy will offer sops including 100 per cent reimbursement of stamp duty and transfer fee for lease of land and buildings meant for tourism projects, ploughing back of 25 per cent value-added tax (VAT) for five years from the date of commencement of operation ie up to 2009-10, and reimbursement of power cost to hotels at the rate of 75 paise per unit," she said, adding that all the tourism projects would enjoy a single-window clearance.

The policy will also offer concessions on luxury and entertainment tax. For new hotels, 25 per cent of luxury tax will be ploughed back for a period of five years. Further, the base tariff per room, for levying luxury tax, will be raised from Rs 300 to Rs 500 per day, and the rate of tax will remain unchanged at 5 per cent. Twenty five per cent on entertainment tax would be reimbursed for multiplexes in theme parks and urban entertainment centres for a period of five years. The benefit is applicable for projects more than Rs 5 crore and is restricted to notified tourism areas and special tourism areas. The minister said the concessional allotment of land on long lease would continue and the length of the tenure will be up to 33 years initially.

"However, longer initial lease period exceeding 33 years will also be considered for mega projects. The lease rent will be 10 per cent of the market value and would be reviewed every five years," she said. With regard to investment subsidies, this benefit will be limited to all notified tourism projects, including hotels, motels, resorts, heritage hotels and amusement parks, costing less than Rs 5 crore. The eligibility will be pegged at 20 per cent of the cost of the project (fixed capital investment) subject to a maximum of Rs 20 lakh to an entrepreneur or a company, the minister said. A separate fund will be created in the tourism department with sufficient budget allocation for sanction of all the incentives, she added.