State Government’s Extended Power Subsidy: A Boon for Industries in Vidarbha, Marathwada, and Northern Maharashtra

Empowering Industries in Backward Regions

Power Subsidy Extension: In a significant move to boost industrial growth, (Maharashtra Industries Growth) the State Government has prolonged the Power Subsidy Scheme, bringing relief to enterprises in Vidarbha, Marathwada, and Northern Maharashtra. This strategic decision aims to enhance competitiveness in these regions amidst fierce competition.

Notification and Key Changes (Power Subsidy Extension)

On a recent Tuesday, the Government issued a Government Resolution (GR) announcing the extension of the subsidy for industries in these regions until the fiscal year 2026-27. Crucially, the subsidy remains at Rs 1,200 crore annually, with no alterations to the scheme’s fundamental calculations.

Deputy Chief Minister’s Hint

The announcement follows Deputy Chief Minister Devendra Fadnavis’s subtle indication during an event where he spoke about the power subsidy scheme. The timing of this decision aligns with the signing of a Memorandum of Understanding for a distillery in Butibori, creating anticipation among industry leaders.

Previously, the Maharashtra Government faced legal challenges after abruptly discontinuing the subsidy scheme midway during the Maha Vikas Aghadi coalition’s rule. The abrupt halt was prompted by the swift exhaustion of the allocated Rs 1,200 crore, intended to last the entire year. Investigations later exposed misuse by some steel industries in Northern Maharashtra, colluding with officials of the Maharashtra State Electricity Distribution Company Limited (MSEDCL).

Industry Protest and Court Intervention

The Vidarbha Industries Association (VIA) took legal action against the Government’s sudden withdrawal, proposing the capping of individual subsidies to prevent misuse. Industries argued that they had invested substantially in capacity upgrades based on the subsidy calculations, urging the Court to direct the continuation of the power subsidy until the stipulated period.

Extending Support for Regional Development

Recognizing the imperative to support industries in Vidarbha and Marathwada, the subsidy scheme extension reflects the Government’s belief in attracting investments to these areas. The GR, while extending the scheme, allows room for amendments, with existing norms in force until a Cabinet Sub-Committee suggests reforms.

Eligibility Criteria and Monitoring

Industries falling under the D and D+ categories are eligible for the power subsidy. To ensure the efficient use of allocated funds, MSEDCL will rigorously monitor subsidy applications. Large claims from individual industries are likely to be scrutinized early on, preventing complications at later stages, as officials have emphasized.

The State Government’s decision to extend the Power Subsidy Scheme signifies a commitment to fostering industrial growth in economically backward regions. By addressing past challenges and introducing careful monitoring, the Government aims to strike a balance between supporting industries and preventing misuse.


1. What prompted the State Government to extend the power subsidy scheme?

The extension aims to support industries in Vidarbha, Marathwada, and Northern Maharashtra, fostering growth and attracting investments.

Some steel industries in Northern Maharashtra allegedly misused the scheme, prompting legal challenges and a swift withdrawal by the Government.

3. What are the eligibility criteria for industries to avail the power subsidy?

Industries categorized as D and D+ are eligible for the extended power subsidy in the specified regions.

4. How will the Government ensure fair distribution of the subsidy funds?

MSEDCL will carefully monitor subsidy applications, red-flagging any unusually large claims at the initial stage to prevent complications later.

5. Can industries expect any changes in the subsidy scheme in the future?

The GR allows for amendments, with existing norms remaining in force until a Cabinet Sub-Committee suggests reforms.

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