In a bid to bolster tourism and catalyse economic development in the state, the Uttar Pradesh government has announced a decision aimed at incentivising the hospitality industry. The government plans to significantly reduce property tax rates for hotels, thereby granting them industry status.
The decision, approved by the cabinet through circulation, is expected to spur the growth in the tourism sector and stimulate the opening of new hotels.
At present, hotels face a burden with a six-time higher property tax rates compared to residential buildings. After the government’s intervention, the property tax levied on hotels will now be reduced to three times of the residential property tax rate. The Urban Development department proposed this alteration, seeking to provide relief to the hotel industry and encourage its expansion. The move aligns with the Uttar Pradesh Tourism Policy 2022, which conferred industry status on hotels.
Differentiated house tax rates exist for hotels based on their star ratings. Hotels below four stars are charged five times the residential property tax, while those rated four stars and above face six-fold tax. Additionally, hotels offering bar facilities, irrespective of their star category, are subject to six times the residential property tax rate. The reduction in house tax is exclusively designed to foster the growth of registered hotels and promote the overall hospitality business in the state. Unregistered hotels, not recognised by the Tourism department, will not benefit from the tax exemption.
In the financial year 2022-23, hotels in 17 municipal corporations across the state contributed Rs 48.36 crore as property taxes. While the reduction in property tax rates may result in a slight decrease in municipal corporation revenues, officials believe that the surge in the hotel industry will ultimately lead to increased property tax collections.
In another significant move, the Uttar Pradesh government has facilitated a more investor-friendly environment by approving benefits for those who applied under the 2017 policy. Under the Uttar Pradesh Industrial Promotion and Employment Promotion Policy 2022, investors from the previous policy will enjoy advantages, making the investment landscape more accessible in the state. The cabinet’s approval of this proposal signals the government’s commitment to supporting existing investors and streamlining the transition to the new policy.
Furthermore, amendments to the Uttar Pradesh Public Works Department Assistant Engineer Service Rules have been implemented, changing the recruitment process for engineers. The revised rules now stipulate that 50 per cent of positions will be filled through promotion, the remaining 50 per cent being filled through direct recruitment. The quota for BTech promotion from electrical mechanics has been eliminated, simplifying the recruitment process.
The state government is also investing in infrastructure projects to enhance the quality of life of its residents and visitors. A new water treatment plant, costing Rs 365.89 crore will be set up in Ayodhya under Amrit Yojana-2. This initiative aims at providing pure drinking water to residents and pilgrims visiting the holy city.
To address security concerns, the government has approved the purchase of six anti-drone systems to safeguard highly sensitive locations, including Raj Bhavan, Vidhan Bhavan, Lok Bhavan, chief minister’s residence in Ayodhya, Kashi, Mathura, Gorakhpur and Lucknow. Additionally, two armored vehicles (Mahindra Marx Man) will be procured to enhance the security of Lok Bhavan and Vidhan Bhavan.
The cabinet has also sanctioned the expansion of the Gorakhpur-Maharajganj road to four lanes and the construction of a four-lane rail over bridge near Nakaha Jungle-Gorakhpur railway station, both totaling more than Rs 200 crore.
Moreover, the government’s commitment to urban development includes the approval of Rs 495.23 crore for the renovation of Godhaiya drain and Ramgarh pond in Gorakhpur. This project aims to mitigate waterlogging issues in the region and improve overall sanitation.
In a move to uplift educational institutions, 150 government industrial training institutes (ITIs) and Regional Staff Training and Research Centre in Aliganj, Lucknow, are being upgraded with the help of Tata Technology Limited. The government has approved the installation of vinyl flooring in these institutions to protect against dampness and enhance construction quality.