DPIIT Releases Operational Guidelines for Implementation of BHAVYA Scheme

The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, released the operational guidelines for implementation of the Bharat Audyogik Vikas Yojna (BHAVYA) Scheme, aimed at developing investment-ready industrial parks across India. The scheme seeks to strengthen India’s manufacturing ecosystem through integrated industrial infrastructure aligned with the objectives of Make in India and PM Gati Shakti.

In March 2026, the Union Cabinet approved the BHAVYA Scheme, with a total outlay of ₹33,660 crore, for the development of 100 plug-and-play industrial parks across India. Subsequently, on April 10, 2026, DPIIT formally notified the scheme and has now issued detailed operational guidelines governing its implementation.

Scheme Framework and Eligibility

Under the Scheme, financial assistance will be provided for development of 100 industrial parks over a six-year period from 2026–27 to 2031–32. The first phase will comprise two application rounds between June and September 2026. Applications are required to be submitted through an online portal managed by the Project Management Agency (PMA), along with a Detailed Project Report (DPR).

The guidelines prescribe minimum land requirements of 100 acres in non-hilly states and 25 acres in hilly states, northeastern states, Union Territories, and states with population below one crore. Both greenfield and eligible brownfield industrial parks are permitted, subject to availability of unencumbered, litigation-free, contiguous and unallotted land.

Sponsoring agencies must possess at least 90% encumbrance-free land at the time of application, and ownership of such land is required to be transferred to the Special Purpose Vehicle (SPV) within three months of project approval.

The guidelines also prescribe a framework for valuation of land contributed to SPVs as equity, including in cases involving land pooling, town planning schemes, and private developer participation.

Selection and Evaluation Process

Eligible applications will be evaluated on parameters including multimodal connectivity, industrial ecosystem strength, quality of infrastructure, policy facilitation, sustainability measures, and digital governance readiness.

The evaluation matrix additionally considers factors such as multimodal connectivity, integrated master planning, worker housing and social infrastructure, plug-and-play facilities, underground utility networks, digital infrastructure, skill ecosystem integration, renewable energy facilitation, industrial tariff competitiveness, and implementation readiness of single-window clearance systems.

Implementation Framework

Each approved industrial park is required to be implemented through an SPV incorporated under the Companies Act, 2013. The SPV will be responsible for planning, financing, development, operation, monitoring, plot allotment, lease management, and maintenance of the industrial park. Existing SPVs formed under the National Industrial Corridor Development Programme may also be utilised for BHAVYA projects, subject to ring-fencing of project funds and liabilities.

A key feature of the guidelines is the requirement that State Governments delegate planning and development powers to the SPV to facilitate effective single-window clearances. Such delegation has been made a prerequisite for release of project funding.

The guidelines further prescribe Shareholders’ Agreements governing SPV management, board composition, reserved matters, transfer restrictions, dispute resolution, audit rights, and State Support Agreements. SPVs may also create an Operations and Maintenance Corpus Fund by setting aside up to 5% of the gross allotment premium to meet operational deficits during the first five years following project completion.

Funding and Infrastructure Framework

Financial assistance under the Scheme will be provided through NICDIT in the form of equity contribution and, in approved cases, debt funding. Funding support may extend up to ₹1 crore per acre for eligible industrial parks. In private developer-led projects, funding is capped at ₹50 lakh per acre or 50% of infrastructure cost, whichever is lower.

Up to 25% of approved funding may be allocated towards external infrastructure for last-mile connectivity, subject to matching commitments from State Governments or private developers. Funds will be released in three tranches in the ratio of 40:40:20, linked to milestones including transfer of land, environmental clearances, delegation of planning powers, commencement of works, and allotment to manufacturing units.

The guidelines identify eligible infrastructure components such as roads, underground utilities, water and waste treatment systems, worker housing, renewable energy infrastructure, warehousing facilities, and testing laboratories. Land acquisition costs, working capital, capitalised interest, vehicles, commissioning fees, and preliminary expenses have been excluded from funding eligibility.

Private Developer led Industrial Parks

Private developers participating under the Scheme must satisfy prescribed eligibility criteria relating to incorporation in India, minimum net worth, technical experience, and absence of blacklisting by government authorities.

The guidelines also prescribe detailed provisions relating to lock-in periods, right of first refusal, change of control, distress exit mechanisms, and State step-in rights in cases involving insolvency or material default. Anchor investors may be permitted to allot up to 25% of developed land to themselves, subject to prescribed investment and operational conditions.

The guidelines further provide for GIS-based monitoring, third-party evaluations, audit mechanisms, and oversight by the National Level Steering Committee headed by the Secretary, DPIIT. Sponsoring agencies are also required to undertake post-project social and community impact assessments.