Introduction: Maharashtra Mega Projects Policy 2025

The Maharashtra Mega Projects Policy 2025, introduced under the Maharashtra Industries Investment and Services Policy (MIIPS) 2025, is a strategic initiative by the State Government to attract large-scale, capital-intensive, and employment-generating industrial investments.

This policy is specifically designed for Mega Projects and Ultra Mega Projects that bring long-term economic value to Maharashtra. Unlike standard industrial incentives, benefits under this policy are customized, negotiated, and approved at the highest level of government, making professional subsidy structuring essential.

At Finraja Consultancy Private Limited, we act as specialized subsidy consultants, helping large investors design, secure, and realize maximum incentives under the Maharashtra Mega Projects Policy 2025.

Understanding Mega and Ultra Mega Project Classification

Under MIIPS 2025, a project is classified as Mega or Ultra Mega based on two core parameters:

• Fixed Capital Investment (FCI)
• Direct employment generation

Eligibility Criteria for Mega & Ultra Mega Industrial Units

• Maximum defined areas are as per Government Resolution No. MAX-1220/CR-25/IND-18 dated 27.05.2020 or as amended by the Government.
• Aspirational Districts include: Gadchiroli, Washim and Nandurbar.

Core Incentive: Industrial Promotion Subsidy (IPS)

The Industrial Promotion Subsidy (IPS) is the primary financial incentive available to Mega and Ultra Mega Projects under MIIPS 2025.

Key features of IPS include:

• IPS is linked to eligible fixed capital investment
• The subsidy is released over a defined incentive period
• Incentive ceilings vary by region and project classification
• For Ultra Mega Projects, IPS is customized on a case-to-case basis

Unlike MSME incentives, IPS for Mega Projects is not automatic. It is granted only after detailed project evaluation, economic impact assessment, and approval by the High Power Committee and Cabinet Sub-Committee.

This is where structured incentive planning plays a decisive role in determining how much subsidy a project actually receives.

Capital Investment Eligibility Under MIIPS 2025

Only eligible fixed capital assets are considered for incentives. These typically include:

• Land (subject to policy conditions)
• Factory building and civil construction
• Plant and machinery
• Utilities, ETP, and infrastructure facilities
• Captive power plant investments

However, a crucial policy clarification applies here:

Investment in captive power plants is eligible for incentives, but does not count toward Mega or Ultra Mega classification thresholds. Many investors lose eligibility benefits due to incorrect asset classification at the planning stage.

Power Tariff Incentives and Electricity Duty Benefits

To reduce long-term operating costs, MIIPS 2025 provides power-related incentives for Mega and Ultra Mega Projects.

These incentives typically include:

• Electricity duty exemption for an approved period
• Power tariff subsidy subject to notified limits
• Positive consideration for renewable energy usage

For power-intensive industries such as metals, chemicals, cement, EV manufacturing, and electronics, these incentives substantially improve project viability and cash flow stability.

Interest Subsidy for Mega Projects

MIIPS 2025 also allows interest subsidy support on term loans used for creating fixed capital assets.

Key points include:

• Interest subsidy applies only to eligible term loans
• Subsidy is calculated as a percentage of interest paid
• The incentive period and ceiling are defined in the approved package
• Interest subsidy is not automatic and must be explicitly sanctioned

Proper loan structuring and certification are essential, as errors in loan mapping often lead to partial or full rejection of claims.

SGST and VAT-Linked Benefits for Ultra Mega Projects

Ultra Mega Projects may receive state tax-linked incentives, primarily through SGST reimbursement mechanisms.

Important considerations:

• SGST reimbursement is linked to actual tax paid
• Incentives are available only during the approved incentive period
• The total benefit is capped within the sanctioned incentive package

Incorrect GST structuring or inter-state billing arrangements can permanently reduce reimbursement eligibility. Hence, tax planning must be aligned with the incentive framework from the beginning.

Mega and Ultra Mega Industrial Parks Support

MIIPS 2025 actively promotes Mega and Ultra Mega Industrial Parks to accelerate large investments.

Projects located in notified parks benefit from:

• Faster approvals and government facilitation
• Better infrastructure readiness
• Higher confidence during incentive sanction

Location strategy plays a key role in improving both approval timelines and incentive certainty.

Employment-Driven Incentive Strengthening

Employment generation is not only a policy objective but also a strong justification tool for higher incentives.

The policy emphasizes:

• Maintenance of qualifying employment throughout the incentive period
• Preference for local employment
• Reduction in incentives if employment norms are not met

Well-documented manpower planning often strengthens the project’s case during approval and review stages.

Financial Impact of Mega and Ultra Mega Project Incentives

When structured correctly, incentives under MIIPS 2025 can deliver significant financial advantages.

Typical outcomes include:

• Reduction in effective project cost by hundreds of crores
• Faster payback period by 2 to 5 years
• Improvement in project IRR by 4% to 8%
• Enhanced long-term cash flow stability

However, the actual incentive realization depends entirely on structuring quality, not just eligibility.

Why Mega Projects Need Professional Subsidy Consultants

The MIIPS 2025 policy clearly establishes that:

• Mega and Ultra Mega incentives are customized, not formula-based
• Approval is case-to-case
• Government negotiations are integral
• Compliance failures can lead to clawbacks

This makes professional support non-negotiable.

At Finraja Consultancy Private Limited, we provide:

• Incentive feasibility and structuring
• Government coordination and approvals
• Asset and employment eligibility validation
• End-to-end claim management and realization

Our focus is not just approval, but actual disbursement.

Conclusion

The Maharashtra Mega Projects Policy 2025 offers one of the most powerful incentive frameworks in India for large investors. Through capital subsidy, power incentives, interest support, and tax-linked benefits, the policy significantly enhances project feasibility.

However, success under this policy depends on strategic planning, accurate interpretation, and professional execution.

If you are planning a Mega or Ultra Mega Project in Maharashtra, engaging experienced subsidy consultants early can make a difference of hundreds of crores in realized incentives.

Call us now: +91 9373114747 or visit finraja.com/contact for quick assistance.