The Department for Promotion of Industry and Internal Trade (DPIIT) recently released the highly anticipated general and operational guidelines for the Bharat Audyogik Vikas Yojna Scheme (BHAVYA SCHEME). While the initial announcement outlined the vision for investment-ready, world-class industrial ecosystems, the final document codifies rigorous eligibility benchmarks, structural frameworks, and phased funding rules.
For promoters, private developers, and land aggregators looking to leverage this ₹33,660 crore under the BHAVYA scheme, understanding the fine print is vital to securing a slot in this highly competitive space.
Here is everything a promoter needs to know to successfully apply for BHAVYA Scheme.
1. Timeline & Phased Selection under BHAVYA SCHEME
The government has solidified a strict execution schedule. The selection for the first phase, targeting up to 50 proposals, will move rapidly in two consecutive rounds:
- Round 1 Window: Opens June 1, 2026, and closes July 31, 2026 (Up to 20 proposals will be selected).
- Round 2 Window: Opens August 1, 2026, and closes September 30, 2026. Promoters whose proposals are rejected in the first round can modify and re-submit in the second round.
The total duration of the scheme spans 6 years, from FY 2026-27 to FY 2031-32. Promoters must be application-ready as all proposals require a Comprehensive Detailed Project Report (DPR).
2. Mandatory Eligibility Criteria
To prevent speculative bidding, the DPIIT has established firm parameters regarding land parcels and ownership:
- Land Scale Requirements: * Non-Hilly States: Minimum 100 acres of contiguous land. The guidelines allow a small relaxation: up to two non-contiguous, adjoining parcels can be combined if each is at least 100 acres and they sit within a 2 km radius.
- Hilly States, NE, UTs & Small States: Minimum 25 acres of contiguous land.
- Note for Megaprojects: Out of 100 total parks, only up to 20 can range between 500 to 1,000 acres, with funding capped strictly at the 1,000-acre threshold.
- Land Possession: Sponsoring agencies must have 90% encumbrance-free land in possession at the time of application submission.
- Strict Transfer Timeline: Land must be legally transferred to the project’s Special Purpose Vehicle (SPV) within 3 months of project approval. Failure to meet this timeline results in deemed annulment of the approval, with only a sole 3-month conditional extension possible under genuine circumstances.
3. Joint Ventures & SPV Structure for Private Developers
The scheme introduces a robust equity framework for private-sector participation:
- The SPV Model: All parks must be executed via a Special Purpose Vehicle (SPV) formed under the Companies Act, 2013. For private collaborations, a project-specific SPV will be established as a joint venture between the State Nodal Agency, the National Industrial Corridor Development and Investment Trust (NICDIT), and the private developer.
- Land as Equity: The private developer’s land contribution will be treated as equity. Valuation will be determined by a joint committee and pegged at the higher of the circle/DLC rate or the Fair Market Value (FMV).
- Equity Lock-in: Private developers face a strict lock-in period; equity disinvestment or share transfer is prohibited for 5 years post-completion and operationalization.
- Anchor Investor Benefit: Private developers acting as anchor investors are permitted to self-allot up to 25% of the developed land. The remaining 75% or more must be distributed transparently to other manufacturing units.
4. Rewritten Funding Matrix & Ineligible Costs
The final guidelines draw a distinct line between public-led and private developer-led models, significantly affecting financial viability structuring:
- Public/CPSE Parks: Maximum funding of up to ₹1 crore per acre.
- Private Developer-Led Parks: Funding is limited to ₹50 lakh per acre OR 50% of the core infrastructure cost, whichever is lower. This funding will be provided strictly in the form of equity through NICDIT.
- Infrastructure Definition: “Infrastructure cost” encompasses core, value-added, and social infrastructure. It explicitly excludes land cost, pre-operative expenses, capitalized interest, and commercial built-up structures built for lease or sale.
- Ineligible Components: Promoters must fund these items entirely through external equity or debt: Land acquisition/development, commissioning fees, royalty, preliminary expenses, working capital, and vehicles.
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5. Stringent Tranche Release and Performance Milestones
Rather than simple time-based fund dispersion, capital flows strictly in a 40:40:20 ratio across three tranches, tied heavily to rapid physical and commercial onboarding:
- Tranche I (40% total): Disbursed in two stages.
- 30%: Released upon NLSC approval, transfer of 90% encumbrance-free land to the SPV, single-window power delegation, and state-level utility allocation.
- 10%: Triggered once environmental clearance is obtained and physical work begins.
- Tranche II (40%): Requires utilization of 75% of Tranche I, proportional physical progress, and the legal land allotment to at least two manufacturing units. These units must carry minimum investment commitments of ₹50 crore in non-hilly states or ₹10 crore in hilly states.
- Tranche III (20%): Split into two stages.
- 10%: Triggered by 90% total fund utilization, completion of external infrastructure, and the commencement of construction of at least two independent manufacturing units.
- 10%: Released upon final completion certification.
Operational Timelines: The SPV must complete all core development work within 24 months from approval (with extensions granted only to massive parks exceeding 500 acres).
6. Sustainability & Single Window Digitization
To score highly in the government’s competitive Challenge Mode evaluation matrix, developers must ensure their DPR covers several structural nuances:
- Digital Single-Window Integration: The SPV must provide single-window clearances. Points are awarded based on the digital integration of e-land management, building construction, fire/pollution NOCs, and labor licensing directly at the SPV level.
- O&M Corpus Fund Setup: SPVs are permitted to divert up to 5% of the gross allotment premium into a dedicated escrow account. This fund will be used to offset operational deficits for the first 5 years (handling roads, STPs, and security).
- Competitive Tariffs: Promoters who work with states to secure highly competitive industrial power tariffs and robust renewable energy facilitation will gain an edge during scoring.
Promoter’s Takeaway
The BHAVYA scheme guidelines turn a broad policy vision into a highly disciplined, milestone-driven infrastructure race. Promoters cannot rely on slow rollouts or speculative property holdouts. Victory goes to teams with clear title deeds, ready-to-deploy capital for ineligible expenses, and an immediate pipeline of large anchor manufacturing tenants to secure multi-tranche fund access.
