Capital Investment Subsidy to Establish a New Deluxe/Three Star or Higher Category New Hotel and Resort
By Madhya Pradesh Tourism Board
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Quick Answer
A scheme by the Government of Madhya Pradesh offering a capital investment subsidy of 15% (up to ₹5 crore) for establishing new deluxe/three-star or higher category hotels and resorts.
- Funding amount
- ₹1.5Cr – ₹5Cr
- Funding type
- Subsidy
- Provider
- Madhya Pradesh Tourism Board
- Application deadline
- Rolling
- Location
- Madhya Pradesh
About this subsidy
The scheme "Capital Investment Subsidy to Establish a New Deluxe/Three Star or Higher Category New Hotel and Resort" was launched by the Department of Tourism, Government of Madhya Pradesh. The scheme provides a capital investment subsidy of 15% on fixed capital investment, subject to a maximum ceiling of ₹5,00,00,000/-. The applicant must invest a minimum of ₹10,00,00,000/- in capital expenditure and ensure the establishment of at least 50 lettable air-conditioned rooms. The scheme is implemented by the Madhya Pradesh Tourism Board and applications for this scheme are accepted online through the state's investment portal.
The scheme aims to bolster the tourism infrastructure within Madhya Pradesh by incentivizing private investment in high-quality accommodation facilities. By offering a significant capital investment subsidy, the Department of Tourism, Government of Madhya Pradesh, seeks to attract developers to establish new deluxe, three-star, or higher category hotels and resorts across the state. This initiative is crucial for enhancing Madhya Pradesh's appeal as a premier tourist destination, catering to both domestic and international visitors who demand superior lodging options. The subsidy directly supports the financial viability of large-scale hotel projects, ensuring that new developments meet stringent quality standards including a minimum of 50 lettable air-conditioned rooms and a substantial capital outlay. This strategic investment from the government plays a pivotal role in creating job opportunities, boosting local economies, and fostering sustainable growth in the hospitality sector, aligning with the state's broader economic development goals. The program is implemented by the Madhya Pradesh Tourism Board, ensuring efficient execution and oversight of all applications and disbursals.
Eligibility
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Subsidy providers
The Madhya Pradesh Tourism Board is the state's tourism agency. It runs a set of schemes for people building, upgrading or running tourism projects in Madhya Pradesh. Most are capital subsidies for hotels, resorts and tourism infrastructure. The rest cover land and heritage…
Learn moreBenefits & Funding
- Amount
- ₹1.5Cr – ₹5Cr
What You Get
The program offers a substantial Capital Investment Subsidy of 15% on the approved fixed capital investment for eligible new hotel and resort projects. This subsidy is capped at a maximum of ₹5,00,00,000/- (Rupees Five Crore Only), providing significant financial relief to private investors undertaking large-scale developments. The benefit is designed to offset a portion of the considerable initial capital expenditure required for establishing high-category accommodation facilities. Beneficiaries must ensure their units remain operational for at least three years from the date of availing the subsidy, with a structured refund mechanism in place if the unit ceases operations prematurely (e.g., 80% refund if closed within 1 year, 60% within 2 years, and 50% within 3 years). This conditional disbursal ensures the long-term commitment and sustainability of the supported projects within Madhya Pradesh's tourism sector. The subsidy is intended to directly reduce the financial burden on the private investor, making these capital-intensive projects more attractive and viable.
- Disbursement
- Reimbursement
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Selection Process
The selection process primarily involves a rigorous verification of the application and supporting documents by the Madhya Pradesh Tourism Department/Board. Once an application for the capital subsidy is submitted, it undergoes a thorough review to ensure compliance with all eligibility criteria, including verification of the minimum capital expenditure, the category and room count of the new hotel/resort, and the commencement of commercial operations. This process ensures that only genuinely eligible private investors establishing high-quality tourism infrastructure receive the subsidy.
Application Process
- 1
Register on Invest Portal
Visit the MP Invest Portal to register as a 'Vendor / Investor' by providing basic organizational details, email, and mobile number.
You - 2
- 3
- 4
- 5
How to apply
Four steps from draft to disbursement — one action each.
- 1
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 2
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 3
Submit on the official portal
Use the official application link and verify all details before final submission.
- 4
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Program templates & documents
Files the program publishes for applicants — download these and apply in the prescribed format.
Frequently Asked Questions
What is the primary objective of this scheme?
The scheme aims to promote private investment in the establishment of new deluxe/three-star or higher category hotels and resorts in Madhya Pradesh, thereby enhancing tourism infrastructure and boosting the state's appeal.
What is the maximum subsidy I can receive?
The maximum capital investment subsidy provided under this scheme is ₹5,00,00,000/- (Rupees Five Crore Only).
What is the minimum investment required to be eligible?
Applicants must incur a minimum capital expenditure of ₹10,00,00,000/- for the establishment of the new hotel or resort.
What are the key operational requirements for the hotel/resort?
The new facility must be of Deluxe/Three Star or higher category and must feature a minimum of 50 lettable air-conditioned rooms. It must also remain operational for at least three years post-subsidy disbursal.
How soon after commencing operations must I apply for the subsidy?
The application for the capital subsidy must be submitted online within one year from the date of commencement of your hotel/resort's commercial operations.
What happens if my unit closes after receiving the subsidy?
The subsidy is repayable on a graded scale if the unit ceases operation within three years. For instance, 80% must be refunded if it closes within 1 year, 60% within 2 years, and 50% within 3 years.
Sources
Data on this page is compiled from official program and provider references.
