Policy Briefing
On 31 December 2025 the state notified MIISP 2025, but the incentive scheme that actually governs disbursement is still PSI 2019 until the implementing resolution publishes. For projects mid-flight, the gap between the two regimes has become a decision worth crores.
For a decade, an investor sizing a manufacturing project in Maharashtra worked from a single, stable reference point: the Package Scheme of Incentives 2019. Capital subsidy, SGST reimbursement, electricity-duty exemption, stamp-duty relief — all of it sat inside one framework, with one set of zone definitions and one body of precedent. That stability is precisely what made the incentive line in a project model dependable.
That reference point has now moved. On 31 December 2025, the Government of Maharashtra notified the Maharashtra Industries, Investment & Services Policy 2025 (MIISP 2025) — a five-year framework, valid to roughly the end of 2030, that replaces the Maharashtra Industrial Policy 2019. It is a genuinely larger document in ambition: it widens the state’s focus from manufacturing alone to manufacturing, services and innovation together, and it sets headline targets of ₹70.5 lakh crore in total investment (₹41.5 lakh crore manufacturing, ₹29 lakh crore services), 50 lakh new jobs, and a lift in industry’s share of state Gross Value Added from 25% toward 30% by 2047 (Government of Maharashtra GR, 31 December 2025; corroborated by Rödl & Partner analysis, 5 February 2026).
For leadership teams, the natural assumption is that a new policy means a new incentive calculation. Here is the part that assumption misses — and the reason timing now matters more than it has in years.
The scheme has been announced. The scheme has not yet begun.
A state industrial policy is a statement of intent. The instrument that actually disburses money to a specific factory is the Package Scheme of Incentives — a separate Government Resolution that translates the policy’s promises into rates, ceilings, eligibility windows and claim mechanics.
As of early 2026, the PSI 2025 implementing resolution had not been published. Until it is, PSI 2019 remains the operative scheme — the framework against which eligibility is assessed and claims are actually paid. This was set out plainly at a Vidarbha Industries Association session in January 2026, conducted by a Joint Director of Industries, and reported in late February: the new scheme’s resolution is awaited, and existing units continue under PSI 2019 in the interim (The Live Nagpur, 26 February 2026).
The trap, stated simply: a unit that has completed its effective steps but has not yet commenced production — and has not filed under PSI 2019 — may apply under the new scheme when it arrives. But the incentives it receives will be PSI 2019 or the new scheme, whichever is lower. (Source: Vidarbha Industries Association session, reported 26 February 2026.)
Read that twice, because it inverts the usual instinct. The temptation, on hearing that a richer-sounding policy has been announced, is to wait for it. For a project in motion, waiting can be the costliest possible move — it forfeits a known PSI 2019 entitlement without guaranteeing anything better, because the “whichever is lower” rule caps the upside while leaving the downside fully exposed.
This is the single most consequential piece of policy nuance in Maharashtra right now, and it is invisible from a press release. It is only visible to someone reading the resolutions, the transition clauses and the filing calendar together.
What PSI 2019 still puts on the table
Because PSI 2019 is what governs today, its actual contents — not the new policy’s headlines — are what belong in a project model right now. For a large project, the basket is substantial:
- Industrial Promotion Subsidy (SGST reimbursement). Reimbursement of up to 100% of gross State GST on the first sale of eligible products within Maharashtra for MSMEs; up to 50% of gross SGST for Large-Scale Industry; and up to 40% of net SGST for Special LSI. The total is capped as a percentage of Fixed Capital Investment, set by the project’s zone (PSI 2019 GR, 16 September 2019).
- Electricity-duty exemption of up to fifteen years for new units in the higher-incentive zones (C, D, D+, No-Industry Districts and Naxalism-affected areas); seven years for export-oriented, IT and biotechnology manufacturing units in the developed zones.
- Interest subsidy of 5% per annum on term loans for fixed assets, capped at the unit’s annual electricity bill.
- Power-tariff subsidy of ₹1 per unit for units in Vidarbha, Marathwada, North Maharashtra and the Konkan belt; ₹0.50 per unit elsewhere; for three years from the start of production.
- Stamp-duty exemption of 100% in the C, D, D+, aspirational, No-Industry and Naxal-affected categories.
PSI 2019 also raised the MSME ceiling to Fixed Capital Investment of up to ₹50 crore, widening the band of projects that qualify for the most generous SGST treatment (PSI 2019 GR, 16 September 2019).
The point for a board is not the individual line items; it is that a live, claimable framework exists today, and that an eligibility clock is already running on it.
What MIISP 2025 signals for the next cohort
For projects still at the concept or land-identification stage — those whose effective steps lie ahead — the new policy’s architecture is the more relevant guide, and it rewards close reading.
MIISP 2025 reorganises the state’s priorities into tiers. The highest-priority manufacturing band includes aerospace and defence, agro and food processing, automotive and auto components (with explicit weight on EV, hybrid and hydrogen drivetrains), battery and energy storage, chemicals and petrochemicals, pharmaceuticals and med-tech. A thrust tier targets semiconductors and display fabrication, hydrogen fuel cells, lithium cells, solar modules and computing hardware. A frontier tier reaches toward optics and sensors, bio-based polymers, small modular nuclear reactors, autonomous-vehicle components, 6G infrastructure and quantum hardware (Rödl & Partner, 5 February 2026).
Three structural mechanisms are worth flagging because they change how a project should be designed, not merely costed:
- Anchor-vendor incentives. Captive vendors supplying a Mega or Ultra-Mega unit can access anchor-comparable incentives (excluding land and capital subsidy) — a material consideration for any investor building a supplier ecosystem rather than a single plant.
- A ₹1,000-crore R&D fund and import-substitution bonuses, which reward projects that localise rather than assemble.
- Customised Mega and Ultra-Mega packages, negotiated through a Cabinet Sub-Committee chaired by the Chief Minister — the route by which the largest projects secure bespoke terms.
None of this is claimable until the implementing resolution publishes. But all of it should shape how a project being scoped today is structured, so that it lands on the right side of the new tiers when the scheme opens.
The decision in front of leadership
Strip away the policy vocabulary and the situation reduces to a single question of sequencing:
- If your project has completed its effective steps, the live issue is protecting your PSI 2019 entitlement and understanding exactly how the “whichever is lower” transition clause will treat you. The risk here is inaction.
- If your project is still being scoped, the live issue is designing it to qualify for the right MIISP 2025 tier — sector classification, localisation, vendor structure — before the implementing resolution sets the rules in stone.
Both require reading two regimes at once and holding them against your own project calendar. That is not a task for general counsel or a project-management office; it is a policy-interpretation task, and getting the date wrong is expensive in a way that is entirely avoidable.
How Altius works this
Altius Ventures reads the operative resolutions and the transition clauses together with a client’s actual project timeline, then maps the incentive position under both regimes side by side — so leadership can see, in numbers, what is at stake in filing now versus waiting. The objective is a clear-eyed view of entitlement and timing, not a promised outcome: incentive realisation depends on eligibility, documentation and the state’s own process, and we frame it that way throughout.
When the PSI 2025 implementing resolution publishes, the calculus in this briefing will change. We will update it here. If you are scoping or mid-flight on a project in Maharashtra, that update is worth getting ahead of.
Is PSI 2019 still valid in Maharashtra in 2026?
Yes. As of early 2026, the PSI 2025 implementing Government Resolution had not been published, so the Package Scheme of Incentives 2019 remains the operative scheme for assessing eligibility and paying incentive claims (Vidarbha Industries Association session, reported 26 February 2026).
What is the “whichever is lower” rule in the incentive transition?
A unit that has completed its effective steps but has not commenced production, and has not filed under PSI 2019, may apply under the new scheme when it arrives — but it will receive PSI 2019 or new-scheme incentives, whichever is lower.
Should I wait for the MIISP 2025 incentive scheme before filing?
It depends on the project's stage. For a project that has completed its effective steps, waiting can forfeit a known PSI 2019 entitlement without guaranteeing more, because of the "whichever is lower" cap. The decision should be made on a case-specific reading of project timeline against both regimes.