Centre Pushes for Homestay Growth with Mudra Loans and Tribal Village Schemes

New Delhi : The Government of India is stepping up efforts to promote homestays as a sustainable model for tourism growth and rural development. In a written reply in the Lok Sabha today, Union Minister for Tourism and Culture Shri Gajendra Singh Shekhawat outlined several key initiatives undertaken by the Ministry of Tourism to support homestay operators across the country, including in the hill state of Uttarakhand.

Under its voluntary classification scheme for Incredible India Bed & Breakfast Establishments, the Ministry classifies operational homestay rooms into Gold and Silver categories based on prescribed guidelines. This classification aims to promote quality and trust among domestic and international tourists seeking local and authentic experiences.

In a significant move to ease access to finance, the Union Government has announced collateral-free institutional credit through Mudra Loans for homestay operators in the 2025–26 Union Budget. This financial support is intended to encourage individuals, especially in rural and remote areas, to set up or expand homestay businesses.

Furthering this effort, the government has also approved the Pradhan Mantri Janjatiya Unnat Gram Abhiyan, focused on improving the socio-economic conditions of tribal communities. As part of the scheme, the development of 1,000 homestays has been proposed. States and Union Territories can receive up to ₹5 crore in assistance for setting up 5 to 10 homestays per village within clusters of 5–6 villages, as per eligibility guidelines.

To build capacity and ensure quality services, the Ministry is implementing the Capacity Building for Service Providers (CBSP) Scheme, which offers education, training, and certification for tourism service providers, including homestay owners. The objective is to enhance professional expertise across both urban and rural tourism sectors and unlock new employment opportunities.

The Ministry is also expanding digital outreach through the Incredible India website, designed as a one-stop platform for tourism information and services, including homestay listings. In parallel, private travel portals and Online Travel Aggregators (OTAs) are increasingly offering homestay booking options, helping operators reach a wider audience.

These initiatives reflect the government’s growing emphasis on sustainable, community-based tourism, especially in rural and tribal areas, with a focus on economic empowerment, cultural preservation, and employment generation.