Wage support, incentives, night shift flexibility for women: How Punjab’s new Industrial Policy is opening the door for businesses

In the IT sector, the support will be Rs 5,000 per employee per month, while companies establishing Global Capability Centres (GCCs) will receive Rs 7,500 per employee monthly. Women will also be allowed to work night shifts in industrial establishments, subject to mandatory safety provisions. The policy extends the incentive eligibility period from the earlier seven to 10 years to 10-15 years, giving industries more flexibility to utilise benefits.

According to official projections, Punjab aims to attract Rs 75,000 crore in industrial investment by 2026 through the new policy. The state had attracted around Rs 25,000 crore in investment in FY2024 and Rs 55,000 crore in FY2025, indicating rising investor interest.

Aligned with investors’ concerns and state’s economic priorities

The government believes the move will bring small and medium enterprises and the IT industry into the incentive framework and encourage wider job creation across sectors. The policy has been framed after extensive consultations with industry stakeholders.

The government had constituted 24 sectoral committees comprising industry experts, trade body representatives and government officials to examine sector-specific challenges and growth opportunities.

The committees submitted 601 recommendations, of which nearly 77 per cent have been incorporated into the policy. Officials said the consultative approach helped design a framework aligned with investors’ concerns and the state’s economic priorities.

Extra incentives for food processing, textiles industries

The policy allows investors to choose from around 20 incentive options, enabling them to create customised packages based on the nature and scale of their projects. Key incentives include SGST reimbursement, employment generation subsidy, electricity duty exemption and stamp duty exemption.

Several priority sectors will receive additional incentives, including food processing, textiles and allied industries, sports goods, agro-waste processing, auto and auto components, electronics and semiconductors, IT and ITeS, electric vehicles, and defence and aerospace. Industries in these sectors will be eligible for an additional 25 per cent incentive.

To promote industrialisation in underdeveloped regions, units set up in border districts of Pathankot, Gurdaspur, Amritsar, Tarn Taran, Ferozepur and Fazilka will receive an additional 25 per cent incentive. The same benefit will apply to the Kandi region.

More grants for startups

The policy also emphasises innovation and the startup ecosystem. Seed grants for early-stage startups have been increased from Rs 3 lakh to Rs 5 lakh, with a second tranche of Rs 10 lakh introduced for scaling startups.

Startups supported by the state will also receive preferential access to government procurement. The government plans to establish an Innovation and Startup Hub in Mohali, aiming to position the city as the Silicon Valley of North India.

Environmental sustainability has also been incorporated into the policy. Industries installing Zero Liquid Discharge (ZLD) systems will receive a capital subsidy of up to Rs 10 crore, while units adopting paddy-straw-based boilers will get support of up to Rs 7.5 crore.

Power sector reforms have been included to reduce energy costs. IT and data centre projects will receive electricity at industrial tariff rates, while EV-charging stations will be charged Rs 5 per unit.

The limit for captive renewable energy generation has been increased to 125 per cent of sanctioned load, and industries will have the option of dual grid connectivity wherever technically feasible. To simplify regulatory procedures, approvals will be processed through a FastTrack portal that promises time-bound digital clearances within 45 working days. The policy also promotes self-certification and third-party certification to reduce delays.

The state has also expanded its industrial land bank, which will be accessible through the same portal to help investors identify suitable land.