Punjab industrial policy 2026 unveiled with flexible incentives and new capital subsidy, says Bhagwant Mann

Punjab Chief Minister Bhagwant Mann on Saturday unveiled the Industrial & Business Development Policy 2026. Mann said the state aimed to become India’s top investment destination. Mann linked the plan to reforms and a flexible incentive system. Mann said the policy was redesigned to speed up industrial growth, draw big investment, and create jobs.

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Mann said Punjab was already seeing record investment. Mann said the policy lets investors select up to 20 incentives. Mann said firms could build customised packages around business needs. Mann also said the government introduced capital subsidy for the first time. Mann added incentives could reach up to 100 per cent of fixed capital investment.

Punjab industrial policy incentives and customised packages

Addressing a gathering, Mann said the policy changed how incentives were designed 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 support differed across sectors due to varying costs and operations. \"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,\" Mann said. Mann said the framework helped firms match incentives to sector, costs, and scale.

Explaining the same point, Mann said, \"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 wasnt there before,\" he said. Mann also said the definition of fixed capital investment was widened. Mann said this raised the base used for incentive calculations.

Punjab industrial policy capital subsidy and fixed investment support

Mann highlighted capital subsidy as a key change in Punjab’s industrial support. \"If someone is planning a 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.\" Mann said this improved project economics and reduced upfront risk.

Mann added, \"This means the same revenue with lower investment. Punjab is the first state in the country to offer that.\" Mann also said the policy covered existing firms, not just new entrants. Mann said incentives now applied to modernisation and expansion projects, alongside greenfield proposals and new investments.

Punjab industrial policy support period and sector focus

Mann said Punjab extended the incentive support period up to 15 years. Mann compared this with most state policies that run for 5 to 10 years. Mann said long timelines mattered for capital-heavy sectors. Mann said this included heavy industry, semiconductors, pharmaceuticals, and data centres.

Calling the longer horizon critical, Mann said, \"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.\" Mann said longer support helped projects with long payback cycles.

Mann said the financial impact was also linked to how returns were valued over time. Mann said, \"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.\" Mann presented this as central to investment decisions.

Punjab industrial policy employment subsidy and inclusion measures

Mann said the policy lowered the entry threshold for employment-linked benefits. Mann said eligibility for employment generation subsidy now started at Rs 25 crore investment. Mann said the condition also included employing 50 workers. Mann said this widened access to incentives for more businesses, including smaller firms.

Mann said the policy linked incentives with inclusive hiring. Mann said, \"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.\" Mann said this aimed to support broader participation in jobs.

Punjab industrial policy incentives for border districts and Kandi areas

Mann said extra incentives were planned for places needing more investment. Mann said 25 per cent additional incentives were offered for nine thrust sectors. Mann said extra support also applied to industries in border and Kandi areas. Mann said this was meant to address uneven industrial growth across regions.

Mann listed Pathankot, Gurdaspur, Amritsar, Ferozepur, and Fazilka as border districts with weaker investment history. Mann said the reason was perceived geographical risk. Mann said, \"These districts have historically seen lower investment because of perceived geographical risk. Punjab is now compensating investors for that risk in rupees, not reassurances.\" Mann said first movers could gain more benefits.

Mann added, \"For a first-mover willing to set up in these areas, the incentive stack becomes genuinely compelling,\" he said. Mann said the policy aimed to draw new projects while backing existing units. Mann said the overall plan was meant to grow industry, increase investment, and expand employment across Punjab.

With inputs from PTI