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The hotel policy had provided for exemption from luxury
tax for five years to new hotels in UP, besides giving the status of industry
to the hospitality sector.
The government gave no specific reason for decision,
which was endorsed by the state Cabinet though the official press release
did state that a committee headed by the Industrial Development Commissioner,
constituted in September 2007 to examine the policy, had recommended its
cancellation.
The previous Samajwadi government of Mulayam Singh had
announced the policy in April 2006 to encourage investment in the hospitality
industry in view of the 2010 Commonwealth games at its doorsteps, in East
Delhi. Union tourism ministry estimates a shortage of 30,000 hotel beds
in Delhi for the Games. U.P. was expected to provide 10,000 additional
hotel rooms.
In the previous policy, only hoteliers and other recognised
groups were entitled to apply for land allotment while builders and real
estate companies were barred. The amended policy makes no such distinction.
In the new policy, urban and industrial development authorities
like GDA and NOIDA have been authorised to identify land and allot it
to the hotel industry according to their rules.
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