Overview
The State of Rajasthan is one of the most favored destinations of tourists in India for both domestic & international traffic. Its desert dotted with rugged forts and beautiful palaces, lakes, wildlife and bird sanctuaries, charming cities, fairs and festivals, and colorful culture form the most fascinating and unique basket of attractions for any tourist. Tourism accounts for over 15% of the state's economy.

Popular tourist destinations in the state include historic cities (Jaipur, Udaipur), wildlife sanctuaries (Sariska, Ranthambore) and desert locations (Jodhpur, Jaisalmer). The State runs famous luxury tourist trains - Royal Rajasthan on Wheels and Palace on Wheels - that connect some of the important tourist destinations of Rajasthan with Delhi and Agra (in Uttar Pradesh). This year Jan tarMantar, Jaipur has been included in the list of World Heritage Sites of UNESCO.

During the calendar year 2010, up to December, the number of tourist arrivals in the State was 26.8 million (25.5 million domestic and 1.3 million foreign). With State registering an average annual tourist arrival growth rate of 15% in domestic and 12% in foreign tourists, the future of tourism is very promising in Rajasthan.



Rajasthan ranks 5th in the country in number of domestic tourists arrival (3.9% of total domestic tourists) and 6th in number of foreign tourists arrival (7.8% of total foreign tourists).

The split of foreign tourists by country in 2009 is as under:

Country	No. of tourists	% of total foreign tourists
France	167000	16%
Germany	100000	9%
U.K.	88000	8%
U.S.A.	82000	8%
Italy	63000	6%
Australia	46000	4%
Switzerland	38000	4%
Canada	34000	3%
Japan	22000	2%
Bangladesh	16000	1%
Others	417000	39%
Total	1073000

Rajasthan has a developed tourism infrastructure, with over 6,000 hotel rooms in more than 150 hotels. Of these, over 1,400 rooms (54 hotels) belong to the heritage category.

Why Locate in Rajasthan

• Rajasthan has a large number of heritage properties in various districts. The owners of these heritage properties have indicated their willingness to enter into contract with private parties.
  Explore more business opportunities at rajasthantourism.gov.in.
  
  The State Government is facilitating an arrangement wherein private heritage properties (forts, fortresses, palaces and havelis) can be taken up by investors in a joint venture or on management contract. The Government is in the process of identifying government properties of heritage value, which would be given out on lease arrangements.
  
• Tourism Units Policy 2007 is in place which provides various incentives to various units.
• A package of incentives is also available for new tourism units under the Rajasthan Investment Promotion Scheme 2010.
• The State Govt. with an objective for easy establishment of Tourist Units has launched an innovative scheme of Land Bank.
• Rajasthan is easily accessible to other states in India through air and rail. The two major tourist destinations in India, Delhi and Agra are in close proximity to the State.
  • Delhi - 260 kms from Jaipur. Jaipur, Jodhpur and Udaipur are connected by daily service of Air, Train and Bus and motorable super highway.
  • Agra - Daily train and bus service and a motorable super highway connect 240 kms to Jaipur

Policies
Tourism Units Policy 2007
The policy, already in place, covers Hotels, as well as all other units such as Heritage Hotels, Camping Sites, Holiday Resorts, Health Spas, etc.

• The minimum and maximum area for land to be auctioned from the land bank has been prescribed. The minimum area in the 2007 policy is the maximum area in the policy of 2006.
• The cost of land has been differentiated with the budget and 3-star hotels base price fixed at less than 50% of the commercial reserve price.
• Under Rule 7 of the Rajasthan Land Revenue Rules 2007 (conversion of agricultural land for non agricultural purpose in rural areas), a proviso has been added exempting from conversion charges all those desirous of establishing hotels or any other tourism unit on the land held by them.
• Regarding conversion of residential land and heritage properties into hotels and other tourism units, a proviso has been added to the Rajasthan Municipal Corporation Rules 2000 (land utilization conversion), where heritage property owners would not have to pay 40% of residential reserve price for conversion of the property into a heritage hotel, with the rider that the property should have a minimum of 10 rooms.
• Floor Area Ratio (FAR) of existing hotels would be increased from 1.75 to 2, to allow construction of an additional floor. However, the land coverage area shall be similar to previous permissible area. The additional floor would only be used for rooms.

Rajasthan Investment Promotion Scheme (RIPS) 2010
The Government has recently announced RIPS 2010 for setting up of new enterprise, enterprises going for expansion, modernization and diversification, and projects set-up for common social good. All kinds of investments are eligible under this scheme. The new scheme also simplifies the procedure for grant and disbursement of subsidy, and introduces transparency in system, by introducing the system of online disbursement of subsidy.

The highlights of RIPS 2010 are as follows
Subsidies

• Investment subsidy and Employment generation subsidy have been introduced.
• The maximum amount of subsidy shall be 50% of the tax deposited, i.e. VAT and CST or SGST(whenever introduced).
• RIPS 2010 provides investment subsidy to all eligible investors of an amount equal to 30% of the tax deposited, without any linkage with payment of interest and wages.
• Employment generation subsidy has been announced @ Rs_icon10,000 per employee/annum.For women, SC/ST and persons with disability this amount has been enhanced to 12,000 per employee/annum.
• For entrepreneurs belonging to Women, SC/ST, or person with disability category, an additional investment subsidy amounting to 10% of the taxes deposited has been kept.
• These subsidies have been announced for 7 years, but to give boost to the MSMEs in thenotified area, time limit has been extended to 10 years.
• Procedure for subsidy disbursement has been simplified by introducing a Challan for Adjustment through Treasury (Form VAT-37B).

Exemption from Taxes
The RIPS 2010 scheme announces exemption from payment of various taxes under the following categories of investment:
1.  New Enterprise and Project for Common Social Good
2.  Investment made for Modernization/Expansion/Diversification
3.  Sick Industrial Enterprise for its revival

The type, extent and period of exemption are as follows:
In case of Enterprises going for modernization/expansion/diversification, the exemption from payment of tax(es) shall be allowed only to the extent to which additional tax liabilities accrue due to utilization of additional capacity created after modernization/expansion/diversification.

Key Players
Prominent tourism industry players with strong presence in Rajasthan include:

• The Indian Hotels Company (IHC): IHC is the hospitality arm of the Tata Group, India's largest private sector business group. In Rajasthan, IHC operates six hotels and resorts in Jaipur, Udaipur, Jodhpur and Ranthambore National Park, with over 400 rooms. IHC had a consolidated income of over US$ 220 million for the year ending 31 March 2004. The Taj Group has been active in converting former royal palaces in India into world class luxury hotels such as the Taj Lake Palace in Udaipur, the Rambagh Palace in Jaipur and Umaid Bhawan Palace in Jodhpur.
• ITC-Sheraton
• The Oberoi
• Holiday Inn

Data Source: Economic Review 2010-11, Government of Rajasthan
Last Updated: October 10, 2011