Initiative part of the Mukhyamantri Tourism Start-Up Scheme
TNR News Network
SHIMLA:
If you’re planning to start a homestay or guest house in Himachal Pradesh, there’s good news. The state government has introduced a special low-interest finance scheme to help locals set up new tourism units or upgrade existing ones.
This initiative, part of the Mukhyamantri Tourism Start-Up Scheme, offers interest subsidies on loans up to Rs 2 crore, aiming to create local employment and strengthen rural and tribal economies through tourism.
Subsidies range from 3% to 5%
According to the scheme notified by the Department of Tourism and Civil Aviation, loans taken for establishing or improving homestays will receive interest subsidies ranging from 3% to 5%, depending on the location of the unit.
Homestays located in urban areas are eligible for a 3% subsidy, while rural areas qualify for 4% and tribal regions for a 5% subsidy. The benefit will apply for a maximum of three years, including the moratorium period. The subsidy is applicable on loans up to Rs 2 crore for Diamond and Gold category homestays and Rs 1 crore for those under the Silver category.
This scheme is open only to bona fide residents of Himachal Pradesh aged 18 years and above, ensuring that the financial assistance remains focused on empowering locals. Both new and existing homestay operators can apply, but they must commit to operating the unit for at least five years. If a homestay shuts down before that period, the government has the right to recover the subsidy.
Those defaulting on loan repayment can lose it
Applicants will also be required to submit key documents, including a GST number, homestay registration certificate, bonafide certificate and an affidavit pledging to maintain operations for the mandated period.
The interest subsidy will be transferred directly to the beneficiary’s loan account on a quarterly basis through a nodal bank. After the loan is sanctioned, the lending bank will inform the District Tourism Development Officer (DTDO), who will coordinate further. However, any delay in loan repayments beyond three months will lead to the suspension of subsidy payments.
A delay beyond six months can result in cancellation of the subsidy altogether. In the case of new constructions, the homestay unit must be ready within two years from the date of loan sanction or the subsidy will be withdrawn.
To ensure transparency and proper record-keeping, applicants must maintain digital or manual booking logs and provide the GST number to the department within three weeks of receiving benefits. Homestay units will also be billed for electricity and water at commercial rates. The government will inform the concerned electricity and water supply departments once a unit is approved under the scheme.
The scheme has already been implemented following its notification in the state gazette and is currently valid until December 1, 2027, though it may be extended depending on its success. It reflects the state government’s push to make tourism more inclusive and sustainable by promoting local entrepreneurship, especially in areas that often remain outside traditional tourism circuits.
