Subsidy for Manufacturing Unit in Maharashtra – Complete Guide (PSI-2019)

Subsidy for Manufacturing Unit in Maharashtra – Complete Guide (PSI-2019)

Updated as per Maharashtra Package Scheme of Incentives 2019 (Valid until new scheme is announced)

Maharashtra is India’s second-largest industrial hub and one of the most supportive states for manufacturing enterprises. With the Package Scheme of Incentives (PSI-2019), the Government of Maharashtra provides substantial subsidies to promote new manufacturing units in less-developed regions and priority sectors.

Whether you want to start a factory in Pune, Nashik, Aurangabad, Nagpur, Raigad, Kolhapur, or Vidarbha, understanding the PSI-2019 policy will help you optimize your project cost and maximize financial benefits.

This blog provides a simple, complete and updated guide to all incentives available for manufacturing units under PSI-2019.

✅ 1. What Is PSI-2019?

The Package Scheme of Incentives 2019 (PSI-2019) is Maharashtra’s industrial subsidy policy that offers:

• Industrial Promotion Subsidy (IPS)

• Interest Subsidy

• Electricity Duty Exemption

• Power Tariff Subsidy

• Stamp Duty Exemption

• Additional incentives for MSMEs

The benefits differ based on taluka classification, sector, and project size (MSME / LSI / Mega).

✅ 2. Who Is Eligible for Subsidy?

You are eligible if you set up a new manufacturing unit in Maharashtra that falls under:

✔ Industries listed in First Schedule of IDRA Act
✔ MSME manufacturing units
✔ Food & agro processing (secondary & tertiary)
✔ IT/Electronics hardware
✔ Biofuel, green energy
✔ Logistics, warehousing
✔ Industry 4.0 / EV / advanced manufacturing

❌ Not eligible: liquor, tobacco, gutkha, banned products.

✅ 3. Area Classification – The Most Important Factor

Subsidy differs taluka-wise. Maharashtra is classified into:

More backward area = higher subsidy.

Some districts like Vidarbha, Marathwada, Ratnagiri, Sindhudurg, Dhule get special 80% basket benefit.

✅ 4. Subsidy Benefits for MSME Manufacturing Units

4.1 Industrial Promotion Subsidy (IPS)

MSMEs get 100% SGST refund on first sale within Maharashtra during the eligibility period.

4.2 Interest Subsidy

Up to 5% interest subsidy on term loan (subject to electricity bill amount).

4.3 Stamp Duty Exemption

Available in C, D, D+, No Industry, Aspirational & Naxal areas.

4.4 Electricity Duty Exemption

7–10 years (depending on area).

4.5 Power Tariff Subsidy

• ₹1/unit for Vidarbha, Marathwada, Ratnagiri, Sindhudurg, Dhule

• ₹0.50/unit for other areas
  for 3 years.

✅ 5. How Much Subsidy Will You Get? (Area-wise Breakdown)

🟩 Group C Areas – 30% of FCI

Eligibility period: 7 years

🟦 Group D Areas – 40% of FCI

Eligibility period: 10 years

🟨 Group D+ Areas – 50% of FCI

Eligibility period: 10 years

🟧 Special Districts (Vidarbha, Marathwada, Ratnagiri, Sindhudurg & Dhule)

Subsidy up to 80% of FCI

🟥 No-Industry Districts / Naxal / Aspirational

Subsidy up to 100% of FCI

✅ 6. Additional 20% Extra Subsidy for Priority Sectors

These units get 20% more subsidy + 2 extra years eligibility:

• Food processing (Secondary & Tertiary)

• Farmer Producer Companies (Primary also allowed)

• Green energy / biofuel units

• Industry 4.0 manufacturing

• Renewable energy component units

❗ Maximum total subsidy = 100% of eligible FCI

✅ 7. Subsidy for Large, Mega & Ultra-Mega Manufacturing Units

LSI (Large Scale Industries)

IPS = 50% of SGST
Basket subsidy:

• C area – 40%

• D area – 60%

• D+ area – 70%

• Special district – 80%

• Naxal / Aspirational – 100%

Mega / Ultra-Mega Projects

Benefits decided by High Power Committee (HPC)
— often extremely high, including:

• 100% SGST refund

• Capital subsidy

• Stamp duty exemption

• Electricity duty exemption

• Customized incentives

✅ 8. What Counts as Eligible Fixed Capital Investment (FCI)?

You get subsidy on:

✔ Land
✔ Building
✔ Factory shed
✔ Plant & Machinery
✔ Utilities (electricals, DG, transformer)
✔ Installation, testing
✔ R&D
✔ Pre-operative expenses (upto 10%)

❌ NOT eligible:
Vehicles, furniture, deposits, second-hand machinery older than 10 years, residential buildings.

✅ 9. Key Conditions for Claiming Subsidy

• Complete effective steps

• Apply before commercial production

• Start commercial production within investment period

• Maintain employment norms

• Maintain production & sales records

• Annual audited financials

• Submit IPS, interest subsidy & other claims on time

✅ 10. How to Apply for PSI-2019 Subsidy? (Step-by-Step)

Step 1: Acquire land / lease (effective possession)

Step 2: Get statutory approvals (MPCB, IEM/Udyam)

Step 3: Apply for Eligibility Certificate (EC)

Step 4: Start commercial production

Step 5: Submit documents to get EC issued

Step 6: Claim IPS / interest subsidy every year

Step 7: Comply with monitoring & operative period

🔥 11. Real Advantage – Why Maharashtra Is Best for Manufacturers?

• High subsidy in backward areas

• Special support for MSMEs

• High ease of doing business

• Strong industrial infrastructure (MIDC)

• Supportive banking ecosystem

• Talent availability

• Proximity to Mumbai–Pune trade belt

🎯 Conclusion

Setting up a manufacturing unit in Maharashtra under PSI-2019 can significantly reduce your project cost, loan repayment burden, and operational expenses.
With correct planning, many units can recover 40% to 100% of their project cost through subsidies.

If you are planning a new unit or an expansion, choosing the right taluka and right project structure can help you maximize subsidy.

📞 Need Professional Assistance to Calculate Your Subsidy?

Adroit Corporation specializes in:

✔ PSI-2019 subsidy planning
✔ Project report preparation
✔ Loan & subsidy application support
✔ Area-wise subsidy calculation
✔ End-to-end execution until disbursement

Contact:
📧 sales@adroitcorporation.in
📞 7203010101
🌐 www.adroitcorporation.in

Rajesh Savaniya