The North News
Chandigarh, May 15
In a bid to curb stubble burning and promote sustainable industrial practices, the Punjab government has introduced a new capital subsidy scheme to encourage the use of paddy straw-based boilers. The initiative, announced by Industry Minister Tarunpreet Singh Sond on Thursday, is part of a major amendment to the Industrial and Business Development Policy 2022. It offers financial incentives to existing industrial units to switch from coal or oil-based boilers to those using paddy straw – a move aimed at reducing pollution and providing farmers with an alternative use for crop residue.
The decision was approved by the state Cabinet in February and officially notified on 20 February 2025. Detailed guidelines for the subsidy were issued on 23 April.
Under the scheme, industries installing new paddy straw-based boilers will receive a subsidy of ₹1 crore per 8-tonnes-per-hour (TPH) boiler or 33% of the actual cost, whichever is lower, capped at ₹5 crore per unit. Units upgrading existing boilers will be eligible for ₹50 lakh per 8 TPH boiler or 33% of the cost, with a maximum benefit of ₹2.5 crore. Larger boilers will receive proportional support.
An estimated 500 to 600 industrial units in Punjab – particularly in boiler-intensive hubs like Ludhiana – stand to benefit. The government has allocated ₹60 crore for the rollout of the scheme. Additional incentives include 100% stamp duty exemption for land used to store and handle paddy straw, and full reimbursement of state GST (limited to 75% of investment) for up to seven years. Speaking at a press conference at Punjab Bhawan, Minister Sond said the scheme reflects the state’s dual goals: promoting industrial development and tackling the longstanding problem of air pollution caused by stubble burning.
“This is not just a green energy initiative – it’s a step towards cleaner air, empowered farmers, and a robust industrial ecosystem,” he said.
Only existing industrial units are eligible under the scheme. To apply, units must present a Consent to Establish certificate issued by the Punjab Pollution Control Board after 20 February 2025. The scheme will be implemented on a first-come, first-served basis. Firms receiving subsidies must use paddy straw for a minimum of five years or risk having the subsidy reclaimed.
