"The quota of private tour operators will be reduced by 20 percent. They will be compensated next year. However, the quota of the Haj Committee of India will not change as mostly poor people benefit from it," External Affairs Minister Salman Khurshid told reporters after discussing the issue with around 200 delegates from all over the country.
"I know there is anxiety (among pilgrims), but there is a need to make some sacrifice," he said.
The Haj Committee of India welcomed the move.
"We welcome the government's decision. It will benefit all the Hajis of the panel," chairman of the Haj Committee of India Qaiser Shamim told IANS.
The problem arose after the Saudi Arabia government reduced the quota of 2013 Haj pilgrims of all countries by 20 percent, and its own by 50 percent, due to construction work going on in the shrine areas, including Mecca and Medina.
The construction is aimed at expanding facilities for the pilgrims.
Since then, the Indian government had been concerned over reducing the number of pilgrims, fearing a law and order situation and negative propaganda against it, said Shamim.
According to government officials, out of India's quota of 1.7 lakh for the annual Haj pilgrimage this year, 1.25 lakh have been selected by the Haj Committee through a draw of lots. The rest are going through private tour operators.
Mostly poor people go through the Haj panel on a government subsidy.
Following the decision, the quota of private tour operators, numbering around 45,000 would be cut by 20 percent, said the officials.
"The poor should get a priority. I have spoken to the attorney general on the legal implications of the decision, if any," said Khurshid.
He appealed to the delegates to explain the situation to the people and said it was being done to create a good atmosphere.
Stating that the government was trying to improve travel facilities, the minister clarified that the new rule that a person can go through the Haj panel only once means that others should also be able to benefit from the subsidy.
Khurshid also suggested the Haj panel should explore the idea of setting up a Haj fund on the lines of Indonesia.
He released a booklet on Haj guidelines for the pilgrims in nine regional languages, besides Hindi and English.
Earlier, Shamim said the Indian contingent mostly consists of senior citizens and the government should consider providing some incentives so that youngsters are drawn to the annual pilgrimage.
"Malaysia and Indonesia send a large number of youngsters to Haj due to the belief that it is better to go on pilgrimage before marriage," he said.