Homestays are private houses providing accommodation to tourists, offering bed and breakfast services. The Provision of affordable accommodation in private homes with basic amenities helps address the shortage of lodging during the tourist season in the state. These homestays can be either additions to existing ones or entirely new units.
Homestays are expected to have basic amenities such as bed, table, chair, closet, Wi-Fi, electric kettle, toiletries, proper lighting, and good ambience to enhance the overall experience for visitors in the State.
Restaurants/Cafes are establishments that serve food and beverages to customer. Wayside amenities encompass various options, including restaurants, cafes, dhabas, and other basic tourist Infrastructure like toilets and parking spaces. These establishments should provide a pleasant ambiance with comfortable seating, whether located in the heart of the city or at tourist sites on the outskirts. They aim to offer tourists better food and service options while exploring the State’s tourist sites.
Crafts emporiums are retail stores that offer a wide variety of handicraft merchandise, with a focus on products created by local craftsmen. The State’s broader objective is to support creative entrepreneurs and prioritize people in brand building. This approach also promotes tourism by creating an immersive cultural experience for those interested in delving deeper into the place’s culture and traditions.
Proposed Estimated Target
The scheme aims to establish 500 homestays and 100 other units, including restaurants, dhabas, wayside amenities, and craft emporiums, annually over a 5-year period (FY 2022-27). The estimated budget for the scheme is Rs. 110 crores, with the flexibility to revise targets based on demand and estimated potential by the Tourism Department.
Table C: Estimate for cost of the project.
|Sl No.||Units||Subsidy/Rate||Per Year||For 5 years|
|Number||Total Subsidy||Total Subsidy|
|2||Restaurants, dhabhas, wayside amenities, craft emporium||3,50,000||100||3,50,00,000||17,50,00,000|
| ||Total :|| || ||21,00,00,000||105,00,00,000|
|3||PMU cost @3%||3.00%|| ||63,00,000||3,15,00,000|
|4||Other cost: Administration, logistics.||1.76%|| ||37,00,200||1,85,01,000|
| ||Grand Total :|| || ||22,00,00,200||110,00,01,000|
Hence, the estimated financial implication to the department per year for a period of five years is Rs 22 Crores.
- To generate livelihood opportunities in both rural and Urban areas of Meghalaya by establishing new self-employment ventures like homestays, restaurants (dhabas/wayside amenities) and crafts emporiums.
- To promote the development of aesthetically pleasing homestays, restaurants (dhabas/wayside amenities) and crafts emporiums while providing technical assistance, such as design templates, to preserve the region’s natural beauty.
- To stimulate ancillary employment in both rural and urban areas by significantly boosting the Tourism sector.
- To address the increasing demand for high-quality accommodation in the State.
- To unlock new potential destinations by creating high-quality accommodation options.
Rationale for the Scheme
- High Tourist Footfall in the State:
Meghalaya is a highly sought-after tourist destination, drawing approximately 1.2 million visitors in 2018, including both national and international tourists.
The Tourism Sector currently contributes 3 to 5 percent of the GSDP and holds the potential to become a major driver of economic growth in the State. Recognized for its multiplier effect on the economy, investments in this sector are essential for creating numerous livelihood opportunities in both formal and informal sectors.
- Infrastructure Enhancement Necessity:
Existing tourism infrastructure in the state is insufficient to cater to the current demand and expansion of tourism. Furthermore, most upcoming homestays, especially in rural areas with high tourism potential, require standardization to maintain the aesthetic appeal of the locations.
- Promotion of High-Value Tourism:
The Tourism Department aims to establish a model of tourism that focuses on creating exceptional experience to attract discerning travellers from both the country and abroad, thereby promoting high-value tourism. To achieve this, there is a need to develop quality tourism infrastructure, particularly in terms of tourist accommodation.
With the growing trend and preference for homestays, the Tourism Department recognizes the need to facilitate the growth of tourist infrastructure while simultaneously linking it to livelihood and employment opportunities. The Meghalaya Tourism Homestay Scheme of the Tourism Department aims to fulfil these needs by providing financial and technical assistance to the local entrepreneurs who aspire to establish homestays and other tourist Infrastructure in the State.
Convergence of PMEGP with Tourism
The Prime Minister’s Employment Generation Program (PMEGP) Scheme, initiated by the central government, aims to provide employment opportunities to citizens by facilitating the establishment of microenterprises through credit-linked subsidies, both in rural and urban areas.
Under the Scheme, the full business cost is provided as a loan by the bank to the beneficiary, which must be repaid over a maximum period of 7 years. PMEPG subsidies are granted after a three-year lock-in period, contingent upon successful implementation and a positive physical verification report. Among the various activities listed under PMEGP, the tourism sector offers the most promising opportunity for unemployed citizens in Meghalaya to earn a livelihood.
However, many potential beneficiaries in Meghalaya’s rural and urban areas, with significant tourism potential, do not utilize the scheme due to their inability to manage high EMIs during the initial three-year lock-in period. Since the tourism industry typically has a longer gestation period, the requirement for high EMI payments early on deters aspiring entrepreneurs from embarking on the tourism ventures. Consequently, this has resulted in a low uptake of the PMEGP scheme, both in the state overall and particularly within the tourism sector.
Meghalaya Tourism Development and Investment Promotion Scheme 2012 (MTDIPS)
The State’s MTDIPS Scheme has provided assistance to entrepreneurs in establishing tourism related infrastructure, such as homestay, resorts, restaurants (dhabas/wayside amenities). While the scheme has enjoyed a 100% success rate till date, its limited budget has restricted its ability to benefit more beneficiaries.
Challenges Addressed by the Meghalaya Tourism Homestay Scheme
The introduction of the Meghalaya Tourism Homestay Scheme aims to address the challenges associated with the two aforementioned schemes, namely PMEGP and MTDIPS, specific to the State of Meghalaya, by integrating the benefits from both the Schemes. The Scheme, through convergence, seeks to tackle the following issues:
- The burden of high EMI repayments during the first three years of PMEGP’s lock-in period for the beneficiaries.
- The low utilization of the PMEGP Scheme in the State of Meghalaya.
- The limited coverage of Tourism Department due to budgetary constraints.
- The promotion of profitable business opportunities that were previously not identified by potential beneficiaries.
- Addressing the long gestation period of Tourism Industry and the necessity to support and encourage entrepreneurs during its initial years.
- Enhanced monitoring with additional support from DCIC and banks.
- The Tourism Department will add an additional subsidy of 35 percent to the existing 35 percent PMEGP Subsidy. The maximum subsidy that a beneficiary can avail from the Tourism Department is Rs 3.5 Lakh, which is 35 percent for a project cost of up to Rs 10 Lakhs.
- The partner bank under the scheme will provide 95% of the total amount required for constructing homestays and other amenities, which is Rs 9,50,000 (for ST in rural areas with a project cost of Rs 10 Lakhs), while the remaining 5% is to be contributed by the beneficiary.
- A one-year moratorium period will be provided after which the beneficiary will begin repaying the loan over a period of 7 years.
- The approximate EMI for the first 3 years will be Rs 4,671/-
- The approximate EMI for the next 4 years will be Rs 6,990/-
- The Tourism subsidy of 35% will be paid in the first 3 years as an EMI.
- The PMEGP subsidy will be transferred to the beneficiary account at the beginning of the fourth year.
Project Cost beyond Rs 10 Lakh:
While the Scheme is designed for an upper limit of up to Rs 10 lakhs, PMEGP provides a loan of up to 2o Lakhs for tourism infrastructure. Hence, a beneficiaries can also apply under the scheme for a project cost of up to Rs 20 Lakhs. However, even with the Rs 20 lakh loan, the subsidy provided by the Tourism department will be limited to 3.5 Lakh i.e., 35% of 10 Lakhs.
The details of the subsidy of Tourism and PMEGP for both 10 lakh and 20 Lakh Loan and the amount of subsidy are provided in table below.
Total Financial Assistance
Levels of funding from PMEGP, Tourism department and thereby the total subsidy under Meghalaya Tourism Homestay Scheme is a shown in the table below:
Table A: Rate of subsidy in percentage for a project cost of up to Rs 10 Lakhs
|Categories of beneficiaries ||Beneficiary’s contribution ||Rate of Subsidy (of project cost)|
|Scheme|| ||PMEGP||Tourism Department||Total Subsidy|
|Area (Location of the project)|| ||Urban||Rural||Urban||Rural||Urban||Rural|
|Special (including SC / ST / OBC /Minorities/Women, Ex-servicemen, physically handicapped etc.||5%||25%||35%||35%||35%||60%||70%|
Table B: Maximum subsidy amount for a project cost of Rs 10 Lakhs and Rs 20 Lakhs.
|Categories of beneficiaries under PMEGP||Beneficiary’s contribution (of project cost)||(Total Subsidy in Rupees)|
|For 10 Lakhs |
| || ||Urban||Rural|
|Special (including SC / ST / OBC /Minorities/Women, Ex-servicemen, physically handicapped etc.||50,000/-||6,00,000/-||7,00,000/-|
|For 20 Lakhs|
| || ||Urban||Rural|
|Special (including SC / ST / OBC /Minorities/Women, Ex-servicemen, physically handicapped etc.||1,00,000/-||8,50,000/-||10,50,000/-|
- The maximum cost of the project admissible for subsidy though Tourism Department is Rs 10 Lakh.
- The maximum cost of the project admissible for subsidy though through PMEGP is Rs 20 Lakh.
- If the total project cost exceeds Rs 20 Lakhs, the balance amount may be provided by the Bank without any Government subsidy.
With the creation of at least 500 homestays per year over a period of 5 years, about 2,500 homestays will be created. It is expected that a minimum of 2 employment will be created per homestay. Hence, creating a minimum of 5,000 direct employment opportunity through the creation of homestays.
Besides the flagship unit of Homestay, other units such as restaurants ( dhabas / wayside amenities) and crafts emporium are expected to create at least 5 employment per unit. Thus, generating at least a minimum of 2,500 direct employment opportunities.
The boost in tourism through the scheme will also create thousands of indirect employments. Thus, in total the programme is estimated to create at least 10,000 employment opportunities for the people of Meghalaya.
Trainings and Capacity building
Entrepreneurship Development Programme (EDP)
The EDP programme will adhere to the two-day format outlined in PMEGP guideline for the service sector. Its objective is to raise awareness about various managerial and operational functions, including finance, marketing, enterprise management, banking formalities, and book-keeping, enabling entrepreneurs to run their business effectively.
Training in collaboration with Tourism Department
As part of the scheme, beneficiaries must undergo mandatory training within six months of receiving the first instalment. Theses training sessions, organized by the Tourism Department in collaboration with private hotels or leading institutes, will span three to four weeks (subject to change based on the requirements). They will cover various aspects of hospitality management and guest services.
The training aims to equip homestay owners with essential skills and knowledge to provide exceptional services to their guests, including customer service, housekeeping, food preparation, cultural sensitivity, and marketing strategies. Learning from experienced hospitality professional and instructors, beneficiaries will gain valuable insights into best practices, ensuring that their homestays meet the expectations of high-value tourists while maintaining high-quality standards.
Awareness Camp & Support Mela
Awareness camps will be held in every district by tourist officers or in collaboration with nodal officers from DCIC to facilitate the onboarding process of beneficiaries. Additionally, the bank will organize Melas/camps at locations where it has no physical presence