§1Who it is for

  • New units and existing units doing expansion (manufacturing; services only new units)
  • Existing units doing modernisation

Useful if

Manufacturing units investing in Punjab.

Do not spend time on it if

Units on the negative list.

§2Eligibility

Not in Negative List (Annexure I)

  1. Commercial production within 5 years of CAF acceptance
  2. MSMEs must register under GoI ZED Scheme and reach at least Bronze level at I-CAF approval for any post-production incentive

§3Benefits

  • Up to 20% of eligible FCI, max ₹10 crore, paid yearly over the chosen 10-15 year eligibility period
  • Modernisation: 20% of P&M investment, max ₹10 crore, 10 equal yearly instalments, once every 5 years

§4Norms — pattern of assistance

  1. Paid after adjusting all other incentives, within the Annual Ceiling
  2. Annualised quantum = capital subsidy / eligibility period
  3. Overall ceiling: MSME and Large units up to 100% of FCI; Border districts, Kandi areas and Priority sectors up to 125% of FCI; absolute cap ₹500 crore
  4. Unused annual ceiling lapses

§5Documents

Tick each one as you get it ready.

§6How to apply

  1. 1

    Submit CAF, then Incentive CAF (I-CAF) on the online portal; choose eligibility period 10-15 years (irrevocable)

  2. 2

    District Scrutiny Committee reviews yearly

§7Pros and cons

Merits

  • Applies to existing units modernising too

Demerits

  • Spread over 10-15 years
  • ZED Bronze mandatory for MSMEs

→Related schemes

Need help with Punjab capital subsidy?

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Sources

  1. Punjab Industrial and Business Development Policy 2026 - Gazette 8 Mar 2026 (hosted by Invest India)

Checked on 18 October 2026. For information only — confirm with the department or bank. Spotted a mistake? Report it.