Mann unveils new industrial policy

Punjab Chief Minister Bhagwant Mann on Saturday unveiled a new industrial policy here, asserting that his government is determined to make the state the number one investment destination in the country through bold reforms and a flexible incentive framework designed around the needs of industry.

He asserted that the Punjab government has fundamentally restructured its industrial policy to accelerate industrial growth, attract large-scale investment and generate employment across the state.

Highlighting that Punjab is already witnessing record investment, Mann said the Industrial & Business Development Policy 2026 allows investors to choose up to 20 incentives and design customised packages suited to their business models, introduces capital subsidy in Punjab, and offers incentives of up to 100 per cent of fixed capital investment.

It also reduces employment generation subsidy eligibility to Rs 25 crore investment and 50 workers, thereby opening industrial incentives to a much wider base of businesses, he said. Addressing a gathering, Mann said the policy represents a major shift in the way industrial incentives are structured in Punjab. “Every other state in India hands investors a fixed menu and says take it or leave it, but Punjab has changed that. Now an investor can pick up to 20 incentives and build a package around their own business model, he said.

Mann said different industries have different operational realities and cost structures. “Pharmaceutical companies need different support than an EV manufacturer; a data centre has different costs than a textile plant. The new policy acknowledges that and builds around it.”

He said the framework allows investors to optimise incentives according to their sector, cost structure, and scale of operations.

“The incentive package can be optimised for their specific cost structure, their specific sector and their specific scale. That is money on the table that wasn’t there before,” he said.

Highlighting another major feature of the policy, Mann stated that for the first time in Punjab’s history, the government has introduced a capital subsidy.

“If someone is planning an Rs 100-crore plant, without capital subsidy... is their risk. With capital subsidy, the Government co-invests a portion upfront, and their capital at risk drops.”

He added that this significantly improves investment economics.

“This means the same revenue with lower investment. Punjab is the first state in the country to offer that.”

Mann further observed that most industrial policies in other states are largely designed to attract new investors while existing businesses often receive little attention.

“Most industrial policies in other states are drafted for outsiders with new investors, greenfield projects and companies being wooed from other states. Businesses already operating, already paying taxes and already employing people are usually an afterthought.”

He said the new policy corrects this imbalance by extending incentives to modernisation and expansion projects as well.

The CM also highlighted that the policy provides long-term stability to investors through an extended incentive period. “Incentive support has been extended up to 15 years, whereas most state policies run 5-10 years.”

He said this provision is particularly important for capital-intensive sectors.

“This is a big boon for heavy industry, semiconductors, pharmaceuticals, data centres and others as these are not businesses that return profit in a year or two but are decade-long commitments.”

Explaining the financial significance of this provision, he stated, “Fifteen years change the net present value, along with the total present value of all future incentives, dramatically. For capital-intensive sectors, this could be the single most important number in the entire policy.”

The CM further asserted that the definition of fixed capital investment has been expanded, which will increase the base on which incentives are calculated.

The CM noted the policy also focuses on making industrial incentives more accessible to smaller businesses.

Mann said the policy promotes inclusive employment practices. “Punjab has made inclusion a financial decision, not just a social one, by ensuring higher Employment Generation Subsidy for businesses employing women, SC/ST and persons with disabilities workers and for IT/ITeS units.”

The CM further said the government has introduced additional incentives to promote industrialisation in regions that require greater investment. “Twenty-five per cent additional incentives have been provided for nine thrust sectors and for industries located in border and Kandi areas.”

He said border districts such as Pathankot, Gurdaspur, Amritsar, Ferozepur, and Fazilka have historically seen lower levels of investment.

“These districts have historically seen lower investment because of perceived geographical risk. Punjab is now compensating investors for that risk in rupees, not reassurances.”

“For a first-mover willing to set up in these areas, the incentive stack becomes genuinely compelling,” he added.