The official press release on the decision stated that a committee headed by the Industrial Development Commissioner, constituted in September 2007 to examine the policy, had recommended its cancellation. But the release did not give details of the “shortcomings” of the old policy.

The previous government, in view of the huge business potential of the Commonwealth Games 2010 in New Delhi, had announced the policy in April 2006 to attract investment in the hospitality industry. As per Union tourism ministry estimates, there is a shortage of 30,000 hotel beds in Delhi for the Games. UP is expected to provide 10,000 additional hotel rooms.

In the previous policy, only recognised groups in the hotel industry were entitled to apply for land allotment while builders and real estate companies were specifically barred. The amended policy makes no such distinction.

In the new policy, urban and industrial development authorities like the Ghaziabad Development Authority (GDA) and New Okhla Industrial Development Authority (NOIDA) have been authorised to identify land and allot it to the hotel industry as per their respective rules. In case such land is not available in their master plan, then both the authorities have been empowered to effect land-use change and allot land to the hotel projects.