New Delhi, Feb. 12: The tourism ministry has sought tax benefits and a relief package in the budget.

Ambika Soni, Union minister of tourism, said: “The devaluation of the dollar against the rupee is affecting the travel industry. The industry is after us (for relief) and we have taken this up at different levels in the finance ministry.”

The tourism industry has been hit by rupee appreciation.

The rate of conversion of the industry’s foreign exchange earnings has dropped 15 per cent in the last 16 months.

Soni said the ministry had also demanded incentives from the government for providing budget accommodation not only in Delhi but also at heritage sites throughout the country.

According to statistics available from the Federation of Hotels and Restaurants Association of India (FHRAI), Delhi alone needs about 30,000 hotel rooms to accommodate visitors to the 2010 Commonwealth Games.

“We have asked the finance ministry to give tax holidays for budget accommodation at places which are most visited such as world heritage sites. India has 27 of them,” Soni said.

She said her ministry was offering Rs 50 crore as incentives for developing infrastructure in large revenue generating circuits and Rs 25 crore for development of destinations such as Agra, Varanasi, Sarnath and Hampi.

An assessment done by the ministry puts the requirement for hotel rooms at 1,50,000 in less than three years, but Soni was not sure how the target would be met.

She was concerned over a lack of adequate response from the state governments and the Union urban development ministry.

“We are certainly racing against time. The ministry itself gives subsidy up to Rs 1 crore for building budget hotels, but there is very little we can do or which is in our hand to get land,” she said.

High land prices are a big obstacle in encouraging investment to increase room capacity.

“Some of the land auctions were so high that people did not even go for the bidding,” she added.

This despite the fact that finance minister P. Chidambaram had announced a five-year tax holiday for hotels of up to four-star grade in the last budget.