In a major policy shift, the Punjab Government, under the leadership of Chief Minister Bhagwant Singh Mann, has amended the Industrial and Business Development Policy 2022 to roll out a capital subsidy scheme for installing boilers powered by paddy straw. This forward-looking initiative is designed to raise farmers’ income, tackle stubble burning, promote eco-friendly practices, and strengthen the state’s industrial sector.
At a press conference held at Punjab Bhawan, Industry Minister Tarunpreet Singh Sond announced that the Cabinet approved the subsidy plan on February 13, 2025, with the official notification released on February 20 and detailed guidelines issued on April 23, 2025.
The scheme provides financial support to existing industrial units currently using coal, oil, or other biomass fuels if they switch to boilers using paddy straw. The government will offer a subsidy of ₹1 crore per 8-tonnes-per-hour (TPH) boiler or 33% of the total cost—whichever is lower—capped at ₹5 crore per unit.
Industries upgrading their current boilers to run on paddy straw can receive ₹50 lakh per 8 TPH boiler or 33% of the actual cost, subject to a maximum of ₹2.5 crore per unit. Larger capacity boilers will be eligible for proportional subsidy benefits.
According to the Industry Department, approximately 500 to 600 industrial units in Punjab—especially in Ludhiana, a hub for boiler-intensive industries—are expected to benefit from the scheme. A total of ₹60 crore has been allocated to fund this initiative.
The Minister also pointed out additional incentives, including 100% stamp duty exemption on land bought for paddy straw storage and handling, along with full reimbursement of net State GST (limited to 75% of the total investment) for a period of seven years.
The core aim of the policy, Sond emphasized, is to balance industrial growth with environmental responsibility. The use of paddy straw as an industrial fuel will not only reduce air pollution caused by stubble burning but also promote a circular economy by putting agricultural waste to productive use.
Minister Sond noted that stubble burning remains a serious environmental concern in Punjab, and the government is committed to finding sustainable, long-term solutions. Encouraging industrial consumption of paddy straw is a key step in that direction.
To participate in the scheme, industries must present a Consent to Establish certificate issued by the Punjab Pollution Control Board after February 20, 2025. It is important to note that this scheme currently applies only to existing industrial units and excludes new setups.
Applications will be processed on a first-come, first-served basis. The Minister urged eligible businesses to apply early through the Department of Industries. As per the guidelines, subsidized boilers must run on paddy straw for at least five years; otherwise, the subsidy will be reclaimed by the government.