Challenge-Based Destination Development (CBDD), 2023

Policy Update
Shivali Yadav

 1. Background

Challenge-Based Destination Development (CBDD) originates from the Union Budget 2023-24, whose Paragraph 93 announced that tourism would be taken up ‘in Mission Mode’ and that ‘at least 50 destinations will be selected through challenge mode’ for holistic development, covering physical and virtual connectivity, tourist guides, food-street standards and tourist security, integrated through a mobile application, with every destination developed ‘as a complete package.’

Acting on this announcement, the Ministry of Tourism’s Swadesh Darshan Division issued the Guidelines for Challenge Based Destination Development on 15 November 2023 (File No. SD-8/25/2023-SD), constituting CBDD as a sub-scheme under Swadesh Darshan 2.0 (SD2.0), the Ministry’s central sector scheme launched in 2022 for integrated, destination-centric tourism development, itself a successor to the original circuit-based Swadesh Darshan Scheme launched in January 2015.

CBDD’s stated objectives are to transform tourist destinations into sustainable and responsible destinations, provide an end-to-end tourist experience, and develop destinations through competition, convergence and strategic alignment with India’s tourism priorities. Proposals must align with the five priorities of the Goa Roadmap: Green Tourism, Digitalisation, Skills, Tourism MSMEs and Destination Management, and with the ‘Travel for LiFE’ sustainability programme.

Selection operates through Destination Management Organisations (DMOs), which States and Union Territories may nominate, with a ceiling of five nominations per State across four thematic categories: Spiritual Tourism, Culture & Heritage, Vibrant Village Programme, and Ecotourism & Amrit Dharohar Sites. The guidelines originally envisaged 50 destinations, 15 each under Spiritual Tourism and Culture & Heritage, 10 each under Vibrant Village Programme and Ecotourism, against a total funding ceiling of Rs 900 crore, with per-destination grants of Rs 25 crore, Rs 25 crore, Rs 5 crore and Rs 10 crore respectively. Every selected destination must undertake two mandatory initiatives: strengthening of its Destination Management Organisation and certification under the Sustainable Tourism Criteria of India (STCI), with a minimum Bronze rating required.

2. Functioning

A destination proposal is submitted by its DMO through the State Government, endorsed by the Chief Secretary, to the National Mission Director, Swadesh Darshan Scheme. Proposals are evaluated on parameters including destination readiness, tourism potential, institutional arrangements, community engagement, environmental considerations, and overall coherence, with weightage for convergence with central schemes such as UDAN, Vande Bharat, national highway development, the Skill India Mission, the Smart Cities Mission, the Swachh Bharat Mission, and the Solar Cities initiative.

Winning destinations are funded primarily for ‘soft interventions’- training and capacity building, marketing and promotion, market research, visitor management and institutional strengthening, while hard infrastructure is funded only where critical to the tourist experience and executable within the project timeline; no standalone hard-infrastructure or land-acquisition funding is permitted, and States must certify encumbrance-free land availability for any hard component.

Funds are released in five instalments tied to physical and financial progress: 10 per cent on selection and initiation of STCI certification; 30 per cent on utilisation of 75 per cent of the first instalment; 30 per cent on utilisation of the first instalment and 75 per cent of the second, alongside 30 per cent physical progress; 20 per cent on utilisation of the first two instalments and 75 per cent of the third, alongside 60 per cent physical progress; and a final 10 per cent on completion, submission of a Utilisation Certificate and project closure.

Selected DMOs must submit a Weekly Progress Report every Monday, with monthly and weekly institutional reviews and a third-party impact assessment of interventions envisaged under the guidelines. As of 17 March 2025, the Ministry had identified 42 destinations under CBDD, short of the 50-destination target, distributed as 11 under Spiritual Tourism, 16 under Culture & Heritage, 5 under Vibrant Village Programme and 10 under Ecotourism & Amrit Dharohar Sites.

3. Performance

Of the 42 identified destinations, the Ministry had formally sanctioned 36 projects across 24 States and Union Territories by 2024-25, spanning all four thematic categories, with a project completion timeline designated as March 2026:

Source: Press Information Bureau, Ministry of Tourism, replies in Lok Sabha dated 17 March 2025 and 28 July 2025.

Two successive written replies in Lok Sabha allow fund utilisation to be tracked over time. Between the reply of 28 July 2025 and that of 8 December 2025, the number of sanctioned projects and the sanctioned amount remained unchanged, while the amount authorised for utilisation moved only marginally:

Source: Press Information Bureau, Ministry of Tourism, replies in Lok Sabha dated 28 July 2025 and 8 December 2025.

At roughly 10 per cent of the sanctioned value, the authorised amount corresponds to only the first of the scheme’s five disbursement instalments, the tranche released on selection and initiation of STCI certification for most of the 36 projects, five months apart and with the March 2026 completion deadline drawing closer.

4. Impact

CBDD marks a structural departure from the volume-based State proposal queue that characterised earlier Ministry of Tourism schemes, introducing a competitive, criteria-based selection process and making sustainability certification a mandatory upfront requirement for the first time in a Ministry of Tourism destination scheme. Its geographic spread includes strategically significant border and frontier locations: Kibithoo in Arunachal Pradesh, Mushkoh in Ladakh, and Jadung in Uttarakhand, aligning tourism development with the Vibrant Village Programme’s border-village objectives, and its convergence requirement formally links destination development to connectivity, skilling and civic infrastructure programmes run by other central ministries.

Measured against its own targets and timelines, however, CBDD’s delivery record to date is limited. Only 42 of the budget-mandated ‘at least 50’ destinations had been identified as of March 2025, and only 36 formally sanctioned, nearly two years after the Budget 2023-24 announcement. More significantly, the government’s own parliamentary replies show that barely a tenth of the Rs 648.11 crore sanctioned had been authorised for utilisation as of December 2025, just three months before the March 2026 completion deadline, indicating that most projects remain at the initial selection-and-certification stage of the disbursement schedule rather than having demonstrated the 30 or 60 per cent physical progress required to unlock further tranches.

This pattern is consistent with documented experience elsewhere in the Ministry: the Comptroller and Auditor General’s Report No. 17 of 2023, a performance audit of the parent Swadesh Darshan Scheme covering 2015 to 2022, found that the scheme was launched despite objections from the Planning Commission and Ministry of Finance, without the feasibility studies that were a prerequisite, and that fund under-utilisation persisted alongside long gaps between meetings of the Central Sanctioning and Monitoring Committee. Separately, the Rajya Sabha’s Department-related Parliamentary Standing Committee on Transport, Tourism and Culture found several projects under the Ministry’s PRASHAD pilgrimage-development scheme progressing at only about 10 per cent, with delays of over a year at sites such as Dwarka and Somnath in Gujarat.

5. Emerging Issues

• Issue 1: Shortfall Against the Budget-Mandated Destination Count
  Only 42 destinations had been identified and 36 sanctioned as of the latest parliamentary replies, against Budget 2023-24’s commitment of ‘at least 50’ destinations to be selected through challenge mode.

•  Issue 2: Stalled Fund Utilisation Ahead of the Completion Deadline
  Authorised utilisation moved from Rs 63.05 crore to Rs 64.81 crore — about 10 per cent of the Rs 648.11 crore sanctioned over five months to December 2025, against a project completion timeline of March 2026.

• Issue 3: Documented Monitoring Weaknesses in the Parent Scheme
  CAG’s Report No. 17 of 2023 found long gaps between meetings of the Central Sanctioning and Monitoring Committee and the absence of feasibility studies under the parent Swadesh Darshan Scheme.

•  Issue 4: Precedent of Multi-Agency Delay in Comparable Schemes
  The Parliamentary Standing Committee on Transport, Tourism and Culture found PRASHAD pilgrimage projects delayed by over a year at some sites due to coordination gaps with agencies such as the Archaeological Survey of India and Railways.

• Issue 5: Funding Design May Not Match Infrastructure Needs of Remote Destinations
  The guidelines restrict funding largely to ‘soft interventions’ and bar standalone hard-infrastructure or land-acquisition support, which may not suit remote or border destinations under the Vibrant Village Programme that could need basic infrastructure before soft interventions are effective.

•  Issue 6: No CBDD-Specific Budget Line Published
  CBDD is funded within the broader Swadesh Darshan/SD2.0 allocation rather than as a separately disclosed budget head, limiting transparent, standalone tracking distinct from the parent scheme.

•  Issue 7: Category-Wise Imbalance Against Original Targets
  Actual thematic distribution (11 Spiritual, 16 Culture & Heritage, 5 Vibrant Village, 10 Ecotourism) diverges from the guideline’s original target mix (15/15/10/10), suggesting uneven State-level readiness or interest across themes.

6. Way Forward & suggestions :

With the March 2026 completion deadline for the first tranche of 36 sanctioned projects approaching and fund utilisation still at an early stage, CBDD’s near-term priority is execution rather than further expansion. Complete identification and sanctioning of the remaining destinations, with particular attention to the under-subscribed Vibrant Village Programme category, which reached only 5 of its originally envisaged 10 destinations. Complete identification and sanctioning of destinations to meet the Budget’s ‘at least 50’ commitment, prioritising the under-subscribed Vibrant Village Programme category.

Examine the reasons for lower Vibrant Village Programme uptake and provide targeted proposal-development support to border and frontier States for that category. Undertake a destination-wise review of STCI certification status and physical-progress milestones to identify and unblock projects still stuck at the first disbursement tranche, with the completion deadline approaching. Conduct an urgent, destination-wise physical progress review of all 36 sanctioned projects to identify and clear bottlenecks preventing the release of the second and subsequent disbursement tranches. Verify that CBDD’s own prescribed review cadence weekly progress reports and monthly/weekly institutional reviews is being followed in practice, given the parent scheme’s documented lapses.

Apply monitoring lessons from CAG’s Swadesh Darshan Scheme audit, regular Central Sanctioning and Monitoring Committee meetings, and documented feasibility assessments to CBDD’s institutional review process. Proactively map and resolve multi-agency clearance requirements at CBDD destinations likely to need them, drawing on the coordination lessons from PRASHAD’s documented delays. Pre-empt multi-agency clearance delays of the kind documented in the PRASHAD scheme by mapping ASI, Railways, forest and environmental clearance requirements early in project planning.

Assess whether the funding design serves the specific needs of remote and border destinations, and consider convergence-based infrastructure support through other central schemes where CBDD funding alone is insufficient. Disclose CBDD-specific sanction and utilisation figures within the Ministry of Tourism’s Demand for Grants, building on what is already shared through periodic parliamentary replies. Publish CBDD-specific sanction and utilisation data within the Ministry of Tourism budget documents for improved fiscal transparency.

Extend STCI Gold-certification incentives and DMO revenue-generation models to help destinations sustain operations once central funding tapers. Executed along these lines, CBDD’s competitive, sustainability-linked model could still deliver on its original ambition of complete, high-quality destination packages supporting Sustainable Development Goal 8 on decent work and Goal 11 on sustainable communities, and the broader Viksit Bharat 2047 vision for India’s tourism sector.

References

Comptroller and Auditor General of India. (2023). Report No. 17 of 2023: Performance audit on “Swadesh Darshan Scheme”—Union Government, Ministry of Tourism. https://cag.gov.in/en/audit-report/details/119135

Ministry of Finance. (2023). Union Budget 2023–24: Budget speech. Government of India.

Ministry of Tourism, Swadesh Darshan Division. (2023). Guidelines for challenge-based destination development: A sub-scheme of Swadesh Darshan 2.0. Government of India.

Press Information Bureau, Ministry of Tourism. (2025, December 8). Challenge-based destination development component under SDS 2.0. Government of India.

Press Information Bureau, Ministry of Tourism. (2025, July 28). Destinations under CBDD scheme. Government of India.

Press Information Bureau, Ministry of Tourism. (2025, March 17). Development of selected tourism destinations under CBDD. Government of India.

Department-related Parliamentary Standing Committee on Transport, Tourism and Culture. (n.d.). Reports concerning the Ministry of Tourism/PRASHAD scheme. Rajya Sabha, Government of India.

About the Contributor: 

Shivali Yadav is pursuing an M.A. in Liberal Studies at Govind Ballabh Pant Social Science Institute, Prayagraj, and is an IMPRI intern. Her work focuses on gender, education, youth, and public policy, with interests in educational equity and qualitative research. 

Acknowledgement

The author sincerely thanks the reviewers and editorial team for their valuable comments, constructive suggestions, and guidance. Their feedback helped improve the clarity, structure, and analytical depth of this policy update.

Reviewers: Devanandana C, Katyayani Sinha

Disclaimer :

All views expressed in the article belong solely to the author and not necessarily to the organisation.

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