Mumbai: The government has announced a new subsidy scheme linked to the number of rooms built by a hotel in a bid to create additional budget hotel room capacity ahead of the Commonwealth Games.

Earlier, the budget hotels were given a lumpsum subsidy, based on the star-rating of the hotel.

The subsidy scheme, announced by the ministry of tourism and culture, would be extended to budget hotels in the metropolitan cities as well.

Hotels in metropolitan cities were earlier not entitled to any such incentives.

Under the new scheme, hotels in one-star category will receive a grant of Rs2 lakh per room, subject to a maximum of Rs30 lakh for 15 rooms.

For two-star hotels, the incentive will be Rs3 lakh with a ceiling of Rs75 lakh for 25 rooms.

In the heritage hotels and three-star category, the ceiling for government grant has been raised to Rs100 lakh at the rate of Rs3 lakh per room.

Amidst soaring real estate prices and lukewarm response from the builders, the government has been hard put to raise guestroom capacity from the current 50,000 to around 150,000 ahead of an expected tourist deluge during the Commonwealth Games in 2010.

The ministry had earlier this year announced tax waivers for the families who want to double up their homes as bed and breakfast facilities for the travellers in a bid to increase the availability of affordable accommodation.