Madhya Pradesh Fasal Vividhikaran (Crop Diversification) Encouragement Scheme 2026

This scheme encourages the setup of new standard category hotels and mini resorts in Madhya Pradesh by Read More... offering a 15% capital subsidy, capped at ₹50 lakh, to boost tourism infrastructure. Read less

Details

Looking to set up a new hotel or mini resort in Madhya Pradesh? The state government's 'Capital Investment Subsidy for Establishment of New Hotel or Mini Resort of Standard Category' scheme is designed to give your venture a significant financial boost.

What Is This Scheme?

Launched by the Tourism Department of Madhya Pradesh, this scheme aims to promote quality accommodation facilities. It provides a capital investment subsidy of 15% on the total fixed capital invested in setting up a new hotel or mini resort of a standard category. The maximum subsidy amount you can receive is ₹50,00,000.

Who Can Benefit From This Scheme?

This scheme is for entrepreneurs and investors looking to establish new, standard-category hotels or mini resorts within Madhya Pradesh. Key requirements include investing a minimum of ₹2,00,00,000 and ensuring a certain number of air-conditioned rooms are available.

Why This Scheme Is Important

By encouraging the creation of new, quality tourism accommodation, this scheme helps in enhancing the tourism potential of Madhya Pradesh. It supports private investment in the hospitality sector, leading to job creation and economic development within the state.

Objective

This scheme encourages the setup of new standard category hotels and mini resorts in Madhya Pradesh by offering a 15% capital subsidy, capped at ₹50 lakh, to boost tourism infrastructure.

Benefits

The scheme permits the costs incurred for necessary inputs provided to farmers to inspire them towards diversification.

The scheme primarily sanctions costs related to Human Resources (Manav Sansadhan) deployed for area overlap and Marketing (Vipanan).

The scheme generally does not sanction Capital (Poonji) expenditure.

Capital expenditure may be sanctioned only in special circumstances for Critical Equipment.

Assistance from the State Government is provided for a minimum period of 3 years.

The period of assistance may be extended based on specific needs.

The applicant organization, if eligible for other Central Government or State Government schemes for capital investment, will be facilitated to receive such assistance.

Conditions

The implementation and monitoring of the scheme must ensure that work is carried out according to the determined directions and guidelines of the State Level Project Screening Committee (SLPSC).

The proposal submitted by the applicant must detail the viability (Vyavsayata) and provide justification (Aparikshan) for the Proposed Expenditures (Prastavit Vyay).

If the applicant Company, Firm, or Institution violates the conditions of the sanction, especially the terms of the Detailed Project Report (DPR), provision will be made for regulatory action or recovery of funds.

Sources and references

Guidelines

Eligibility Criteria

You must be establishing a new Hotel or Mini Resort that meets the 'Standard' category requirements.
Your minimum capital expenditure must be ₹2,00,00,000, as approved by the department.
For hotels, you need to ensure a minimum of 25 air-conditioned lettable rooms.
For mini resorts, a minimum of 10 air-conditioned lettable rooms is required.
You must ensure that 70% of the employees hired for new Standard hotels are residents of Madhya Pradesh.
Your application for the subsidy must be submitted within 1 year from the date your unit starts operations.
Any capital investment made more than 3 years before the commencement of operations cannot be included for subsidy calculation.

How To Apply

Applications for this subsidy are accepted within one year from the date of commencement of operation.
All applications for permissions and subsidies are to be submitted online through the State Government's Invest Portal or Single Window System.
The scheme is implemented by the Madhya Pradesh Tourism Board. For any specific queries or to find the official portal, please refer to the official government sources.

Documents Required

Proof of Company/Firm Registration:

Memorandum and Articles of Association (for Public/Private Limited Company)
Partnership Deed and Certificate of Registration (for Partnership)
Certificate of Registration (for Proprietary Concern)
Certificate of Establishment of Firm/Company

Property and Land Documents:

Certified Khasra Map
Site Map
Registered Sale Deed or Lease Deed

Project and Planning Documents:

Project Report
Certificate from HRACC (if applicable)
Certificate from Town and Country Planning (TNCP)
Map Sanctioned by the Local Authority (e.g., Municipal Corporation, Municipality)
Building Permission from the Appropriate Authority
Approved Floor Plan
Completion Certificate from Competent Authority

Financial and Investment Proof:

Total Project Cost Certificate (Certified by a Certified Engineer/Valuer)
Total Capital Cost Certificate (Certified by a Chartered Accountant)
Debt Details from Concerned Financial Institution

Proof of Commencement of Operation:

Photocopy of First Lodging Bill
Photocopy of First Catering Bill
Copy of First Bill of Service/Facility Provided

Other Essential Documents:

Coloured Photographs of the Unit/Project (03 different angles, JPG format, max 500 KB)
Cancelled Cheque of the Firm/Company
Copy of PAN Card
Copy of Photo ID Proof (Aadhaar Card/Voter ID/Passport etc.)

Official Sources

For the most accurate and up-to-date information, please always refer to the official website of the Madhya Pradesh Tourism Board or the relevant government portal.

FAQ’s

What's the timeline for submitting the subsidy application after my hotel or resort starts running?

You must submit your application within 1 year from the date your unit officially begins its operations.

Are there any specific employment rules for hiring local residents that I need to follow?

Yes, to be eligible for this capital subsidy, you must hire 70% of your total staff from the residents of Madhya Pradesh.

How long do I need to keep my tourism unit open after receiving the subsidy?

It's mandatory to keep the unit operational for at least 3 years from the date you receive the subsidy. You'll also need to submit a yearly self-declaration confirming it's still running.

What happens financially if I have to close my unit within the first three years?

If your unit closes within 1 year of getting the subsidy, you'll have to refund 80% of it. If it closes within 2 years, you'll refund 60%, and within 3 years, you'll refund 50%.

Does the government offer any extra benefits if my project is in a less developed or remote area?

Yes, projects in eligible remote areas can get an additional 5% Capital Investment Subsidy. Also, the minimum investment required and the number of rooms needed are reduced by 50% for such projects.

Can I claim benefits from multiple subsidy categories if my project qualifies for more than one?

No, if your unit is eligible for subsidies under different categories, you must choose only one category to receive the benefit from.

I'm planning to expand my existing hotel. Does this scheme cover expansion projects?

Expansion projects are eligible, provided there's a minimum 50% increase in the accommodation capacity (number of rooms) of the existing establishment.

Are there any additional incentives for entrepreneurs belonging to Scheduled Caste or Scheduled Tribe communities?

Yes, SC/ST entrepreneurs who fully own the tourism project are eligible for an extra 5% capital investment subsidy.

Is the subsidy amount fixed, or is there an upper limit I should know about?

The subsidy is 15% of your fixed capital investment, but it's capped at a maximum amount of ₹50,00,000.

If I invested in the project before it officially started, will that spending be considered for the subsidy?

Yes, capital expenditure incurred up to 5 years before the commencement of operations can be considered valid, as long as the project was executed and operated continuously.

Whose certification do I need for the capital cost to support my subsidy application?

The total capital cost must be certified by a qualified Chartered Accountant, and the total project cost needs certification from a Certified Engineer or Valuer.

What documents can I use to prove when my tourism unit began commercial operations?

You can submit copies of your first lodging bill, first catering bill, first service bill, or any other official document that legally proves the date of your unit's commercial operation.

Does my project need to be completed within a specific policy period to get the subsidy?

Yes, your project must be established and become operational during the valid period of the applicable policy to be eligible for the capital investment subsidy.

How should I submit my application for land or other necessary permissions?

All applications for land, permissions, and subsidies should be submitted online via the State Government's Invest Portal or their Single Window System.