NITI Aayog pitches reforms to boost homestays, calls for fiscal incentives and digital push

Mumbai, Aug 22 NITI Aayog on Friday proposed a set of reforms to strengthen India’s homestay sector, saying it can become a key driver of jobs and regional growth as the country banks on tourism for economic expansion.

In a new report titled “Rethinking Homestays: Navigating Policy Pathways”, the policy think tank in collaboration with Internet and Mobile Association of India (IAMAI) have suggested fiscal incentives, simpler registration and renewal processes, and digitalisation of operations to help states build a resilient and inclusive ecosystem for homestays.

The report notes that domestic tourism has surged after the pandemic, with more travellers seeking immersive and community-based experiences.

Homestays, it says, offer a unique way to showcase India’s culture and spread the economic benefits of tourism to local communities.

However, the sector is currently held back by cumbersome regulations, inconsistent policies across states, and limited access to incentives.

According to NITI Aayog, the homestay market in India was valued at Rs 4,722 crore in 2024 and is projected to grow at 11 per cent annually till 2031.

The sector also has one of the highest employment multipliers in tourism, creating opportunities not just for hosts but also for local businesses in food, handicrafts, and transport.

The recommendations include setting up a single-window digital platform for homestay registration and compliance, allowing self-declarations to reduce paperwork, and offering proportionate registration fees to encourage more small operators.

NITI Aayog has also called for homestays to be treated as residential units for utilities such as water and electricity, so that operators are not forced to pay commercial rates.

The report highlights best practices from states such as Goa, Kerala and Uttarakhand, which have already introduced targeted incentives and simpler frameworks.

It recommends that these lessons be scaled nationally to make homestays a strong pillar of India’s tourism economy.

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