Industry body seeks ‘improvements’ to subsidy provisions of state govt trade policy

The Punjab Pradesh Beopar Mandal (PPBM) has demanded “practical improvements” in provisions related to capital subsidy and interest subsidy in the Punjab Government’s new Industrial and Trade Development Policy-2026. PPBM president Piara Lal Seth said the current proposal to provide capital subsidy in annual instalments was creating financial pressure for industries, especially MSMEs and units located in border districts.

Industries had to make significant investments in land, plant, and machinery at the initial stage, Seth added, saying delays in grants impacted cash flow, and forced industrialists to take on more debt.

He said the subsidy, which is provided in ten annual instalments, increased the interest burden on industries, impacting project viability. Furthermore, the lump-sum subsidy offered by other states could cause Punjab to lag behind in attracting investment, he said.

The business body demanded that the capital grant be released lump-sum, after verification of investment and production commencement. This, it said, would strengthen the cash position of industries and reduce debt burden.