NITI Aayog proposes major reforms to slash hotel construction timelines in Maharashtra
On Wednesday, NITI Aayog and the Union Ministry of Tourism released a joint report recommending sweeping regulatory and construction reforms to slash hotel development timelines in Mumbai and across Maharashtra. The report, titled "Unlocking Growth in Tourism and Hospitality Sector" and prepared with research support from the Atithi Foundation, aims to reduce hotel commissioning timelines from the current 36 to 48 months down to 12 to 18 months, matching ASEAN standards.
The proposed reforms address significant bottlenecks that currently limit room supply, drive up project costs, and make travel more expensive for tourists. Currently, India has only about 2 lakh branded hotel rooms, which accounts for less than 8 percent of the country's estimated lodging capacity of 24.8 lakh rooms.
To accelerate investment, the report recommends scrapping project-stage approvals by the Ministry of Tourism. It proposes replacing multiple permissions with a single Health Trade Licence and a single liquor licence for hotels operating several restaurants on the same premises. Additionally, the report suggests eliminating the separate Eating House Licence, extending the validity of liquor licences and FSSAI registrations, and expanding digital single-window clearances.
On the construction front, the report proposes liberalising norms by increasing the permissible Floor Area Ratio (FAR). It also suggests easing ground coverage, parking, and minimum road-width requirements, alongside raising high-rise thresholds to facilitate faster and lower-cost hotel projects.
These recommendations are highly significant for Maharashtra as the state government seeks to expand tourism beyond Mumbai into regional destinations such as the Konkan coast, Tadoba, Mahabaleshwar, Ajanta-Ellora, Nashik, and Sindhudurg.
Hemant Joshi, CEO of the Atithi Foundation, noted that attractions alone are not enough to drive sustainable growth. He highlighted that while Maharashtra has immense potential, destinations like Tarkarli remain difficult to reach, Tadoba lacks global visibility, and Mahabaleshwar continues to struggle with congestion, parking shortages, and waste management pressures. Joshi called for destination-specific plans supported by professionally governed destination management organisations.
According to the report, India's tourism sector contributed Rs 15.73 lakh crore, or 5.22 percent of GDP, in 2023-24 and supported 84.6 million jobs. However, India still attracts less than 1.5 percent of global international tourist arrivals, highlighting the urgent need for these regulatory and infrastructure upgrades.
