Scheme for Hotel and Restaurant Projects

What is the Scheme for Hotel and Restaurant Projects?

Scheme for Hotel and Restaurant Projects is a term loan scheme of the Pondicherry Industrial Promotion Development and Investment Corporation Limited (PIPDIC), the Government of Puducherry undertaking that functions under the Department of Industries and Commerce. PIPDIC lists the scheme among its specific schemes for tourism-related activities, and describes its purpose as assistance for setting up small hotels and restaurants in urban areas.

Puducherry's economy leans heavily on visitors, the French quarter, the beaches, Auroville and the temple circuit all draw travellers who need rooms and meals. Small hospitality units are therefore a natural lending line for the territory's own development corporation, and PIPDIC funds them rather than leaving the sector entirely to commercial banks.

The scheme is a credit scheme, not a grant. Money lent under it is repaid with interest, and it is secured against immovable property.

How much assistance is available?

PIPDIC describes the loan under the hotel and restaurant scheme as need-based, the Corporation assesses the project cost, the promoter's contribution, and the projected cash flow, and sanctions accordingly rather than against a published ceiling. For comparison, PIPDIC's wider tourism-related activities scheme carries a maximum project cost of Rs 1,200 lakh with repayment of up to 10 years including moratorium, and a hotel or restaurant project of that scale would normally be appraised there.

Interest follows PIPDIC's standard structure:

Units promoted by women, Scheduled Caste, Scheduled Tribe or differently abled persons are charged 0.5 per cent less than the normal rate.

The debt-equity norm is up to 3:1 for loans up to Rs 25 lakh and up to 2:1 for loans above Rs 25 lakh, which in practice means a promoter must bring at least a quarter to a third of the project cost.

An investigation fee of 0.50 per cent of the loan applied is charged for loans up to Rs 25 lakh and 0.75 per cent above that, with a 50 per cent concession for SC and ST entrepreneurs.

Who is eligible for a hotel or restaurant loan?

You can apply if:

• You are an entrepreneur setting up a hotel or restaurant in an urban area of the Union Territory of Puducherry, including Karaikal, Mahe and Yanam.
• You are a proprietorship, partnership firm, private limited company or public limited company. PIPDIC lends to all these forms.
• You can bring the promoter contribution required by the debt-equity norm.
• You can offer immovable property as collateral security meeting PIPDIC's valuation norms.
• Your project can obtain the municipal or panchayat permission, food safety registration and Tourism Department approval the activity needs.

You cannot apply if:

• Your project is outside the Union Territory of Puducherry.
• You are seeking a grant or a subsidy. This scheme is a secured term loan; capital subsidies for eligible enterprises are separate and are dealt with by the Department of Industries and Commerce under the industrial policy.
• You have no collateral property and no guarantor who can offer property meeting the norms.
• You are an existing defaulter with PIPDIC, a bank or another financial institution.
• You are buying a running hotel as a going concern. Purchase of existing land, building and machinery is dealt with under PIPDIC's separate scheme for financial assistance for purchase of existing assets, which carries its own conditions including a 1 per cent higher rate of interest.

What collateral security does PIPDIC require?

• Property inside Puducherry: value not less than the term loan sanctioned.
• Property outside Puducherry with a building: not less than 150 per cent of the loan.
• Property outside Puducherry, land only, not less than 200 per cent of the loan.
• Valuation by a Chartered Engineer from PIPDIC's approved panel.

What documents are required?

How to apply for the Scheme for Hotel and Restaurant Projects

1. Prepare the project report, the number of rooms or covers, the civil work estimate, the kitchen and equipment list with quotations, the projected occupancy or turnover, and how you will fund your share.
2. Register as a New Customer on pipdic.in and log in to the customer account.
3. Choose the correct loan form under Loan Applications, the Application Upto 25 Lakhs form or the Above 25 Lakhs form, depending on the loan you are seeking.
4. Fill the application and upload documents; premises papers, plans, quotations, promoter identity documents and collateral property particulars.
5. Pay the application fee online — Rs 100 for a loan up to Rs 25 lakh, Rs 200 for a loan above Rs 25 lakh.
6. Go through appraisal. PIPDIC verifies the quotations and the premises, assesses the projections, and has the collateral property valued by a Chartered Engineer from its panel.
7. Complete documentation after sanction: original and antecedent title deeds, 30-year encumbrance certificate, valuation certificate, patta, FMB copy, tax receipts and the legal opinion. Disbursement follows documentation.

How do I check my application status?

1. Log in to pipdic.in and use the application status view under your customer account.
2. Quote the application number issued at submission.
3. Contact The Managing Director, PIPDIC Ltd., No. 60, Romain Rolland Street, Puducherry 605001, phone 0413-2334361, email info@pipdic.com.
4. Use the Enquiry or Grievance form on pipdic.in if the application has not moved.

Common reasons hotel and restaurant applications are rejected

• No clear title to the premises. A lease that is short, unregistered, or not on the required stamp paper.
• Collateral shortfall against PIPDIC's valuation norms.
• Optimistic projections not backed by comparable occupancy or covers data, which fail at appraisal.
• Missing statutory clearances: municipal or panchayat permission, food safety registration, and Tourism Department approval where required.
• Only one quotation for equipment. PIPDIC asks for the selected supplier's quotation plus two comparative quotations from standard suppliers.
• Existing default with any bank or financial institution.

Key dates

PIPDIC does not run an application window for this scheme. Applications are accepted through the year on the online portal. The interest rates, fee rates and debt-equity norms cited here are PIPDIC's published financial norms; the rate that applies to a sanction is the rate prevailing on the date of sanction, so confirm it with the Corporation before committing to a project.

Help and contact

• The Managing Director, PIPDIC Ltd., No. 60, Romain Rolland Street, Puducherry 605001 to 0413-2334361, info@pipdic.com
• General Manager (Administration), PIPDIC Ltd.; mobile 9894653835
• Online applications; pipdic.in
• Scheme list, pipdic.in/pipdic_schemes
• Financial norms; pipdic.in/financial_norms
• Department of Industries and Commerce, Government of Puducherry; industry.py.gov.in