BHAVYA Scheme gets Cabinet nod: Govt approves plug-and-play industrial parks plan with Rs 33,660 cr outlay

The Union Cabinet Committee on Wednesday approved the Bharat Audyogik Vikas Yojna (BHAVYA), with an allocation of Rs.33,660 crore for developing 100 plug-and-play industrial parks across the country, as proposed under Union Budget 2026.

Under the BHAVYA scheme, projects will be developed with state governments, central PSUs and private developers.

The projects will be selected in challenge mode under the following evaluation criteria:

• PM GatiShakti principles
• Underground utility corridors
• Green energy
• Ease of doing business reforms

The Centre will provide support of up to Rs 1 crore per acre under the scheme for 6 years (FY 2026-27 to 2031-32). Industrial parks of a minimum of 100 acres are eligible for the government grant.

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What is BHAVYA scheme?

Under the BHAVYA scheme, the government will facilitate approximately 34,000 acres of investment-ready, plug-and-play industrial facilities at competitive rates.

As per a government release, the scheme aims to develop world-class industrial infrastructure, unlocking manufacturing potential and driving India’s growth story.

The government has approved BHAVYA scheme after the success of Industrial Smart Cities developed under the National Industrial Corridor Development Programme (NICDP) framework.

The scheme will deliver plug-and-play industrial ecosystems, enabling industries to move from intent to production with speed and certainty, the government said in a release. "With pre-approved land, ready infrastructure, and integrated services, BHAVYA will significantly reduce entry barriers for investors."

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Under the scheme, industrial parks ranging from 100 to 1000 acres will be taken up for development. The government will provide financial support of up to Rs. One crore per acre for:

• Core infrastructure (internal roads, underground utilities, drainage, common treatment facilities, ICT and administrative systems)
• Value-added infrastructure (ready-built factory sheds, built-to-suit units, testing labs, warehousing)
• Social infrastructure (worker housing and support amenities)

In addition to this, it will also provide support for external infrastructure up to 25% of the project cost, ensuring seamless connectivity and integration with existing networks.

Industrial parks under the BHAVYA scheme will be designed with the following principles:

• Aligned with the PM GatiShakti Principles to enable seamless multimodal connectivity and efficient last-mile access
• Green energy and sustainable resource use with integrated underground utility corridors enabling a no-dig environment for efficient maintenance and uninterrupted industrial operations

The scheme aims to benefit manufacturing units, MSMEs, startups, and global investors seeking ready-to-use industrial infrastructure, along with workers, logistics providers, service sector enterprises, and local communities.

Budget 2026 proposal

Under the Union Budget 2026, Finance Minister Nirmala Sitharaman allocated Rs 3,000 crore for a new scheme for plug-and-play industrial parks, stating such a policy to revive 200 legacy industrial clusters will help improve their cost competitiveness and efficiency through infrastructure and technology upgradation.

"This means improved infrastructure and regulatory support that will revive the underutilised assets," said a government official.

The Indian government has taken up measures to build industrial clusters through various schemes over the past few decades, from the 1997 Industrial Park Scheme, 2005 SEZ Act and the National Industrial Corridor Development Programme besides sector-specific clusters for electronics, textiles, and software.