Centre plans to build 500 tribal-run forest homestays in FY27 to promote domestic tourism

6% of the country’s population, concentrated in states like Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Gujarat, and Jharkhand, as well as in the Northeast. SummaryThe government plans to develop 500 tribal-managed forest homestays under a tourism scheme in FY27, aiming to generate rural employment and promote indigenous culture. The initiative will offer households up to

₹5 lakh in financial assistance to build or upgrade tourist-ready rooms.New Delhi: The government plans to convert remote forest villages into tourist destinations by building 500 tribal-run homestays in the financial year starting April 2026, as India seeks to spread the economic benefits of the travel market, two government officials said.The initiative, part of the Pradhan Mantri Janjatiya Unnat Gram Abhiyan scheme under the Swadesh Darshan programme, which has a

₹1,905 crore outlay for 2026-27, will offer tribal households financial assistance of up to

₹5 lakh each for constructing new rooms and up to

₹3 lakh for renovation of existing rooms, the two officials said on the condition of anonymity. Six projects are expected to be sanctioned under the scheme during the fiscal year, the first person mentioned above said.The plan was outlined by the expenditure department to the tourism ministry in a communication reviewed by Mint.The plan targets the 104 million tribal citizens, about 8.6% of the country’s population, concentrated in states like Madhya Pradesh, Maharashtra, Odisha, Rajasthan, Gujarat, and Jharkhand, as well as in the Northeast. The government said the initiative will create 1,000 jobs in the operations and maintenance phase.“The process for a dedicated outlay for the plan is under consideration, and it will soon be finalized,” said the second person.While the government has increased spending on tourism infrastructure schemes such as Swadesh Darshan from

₹630 crore in 2021-22 to

₹1,750 crore in 2024-25, and on PRASHAD from

₹153 crore to

₹240 crore during the same period, homestays still do not have a separate budget allocation.The tourism ministry has told Parliament that support for homestays is currently being provided through existing tourism and rural schemes. The government has, however, announced plans to support 1,000 tribal homestays with funding for construction and village infrastructure, while Budget 2025-26 also proposed collateral-free Mudra loans for homestay owners.The programme could help remove the chronic shortage of hotel rooms. It also tracks Prime Minister Narendra Modi's public calls for citizens to prioritise domestic travel, and travellers’ interest in immersive, community-led experiences.Queries sent to the ministries of finance and tourism remained unanswered till press time.Filling the rooms gapExperts and industry leaders have hailed the move as a ‘transformative step’ that showcases India’s tribal and regional cultural diversity.Rajan Bahadur, chief executive officer (CEO) of the Tourism & Hospitality Skill Council of India (THSC), told Mint that the government is taking domestic tourism seriously, with homestays expected to play a central role in the sector’s next phase of growth.“It would generate substantial livelihood opportunities while also helping showcase India’s tribal and regional cultural diversity,” said Bahadur.Dipak Deva, managing director for travel agencies Sita and Travel Corporation India Ltd (TCI) said that the proposed homestay push could become a powerful driver of rural employment, taking the economic benefits of tourism beyond heritage sites and landmark cities into grassroots communities.“Today’s traveller is looking for immersive experiences—including staying with tribal communities and exploring rural India,” Deva said, adding that such travel can also appeal to people working in high-stress industries seeking more therapeutic, experience-led holidays.The initiative could also attract overseas tourists, but experts stres