Quick answer: The Package Scheme of Incentives 2019 (PSI 2019) is the Maharashtra government’s main subsidy scheme for factories. If you set up or expand a manufacturing unit in the state, you can get up to 100% SGST refund, a full stamp duty waiver, a 5% interest subsidy on bank loans, and cheaper electricity. Benefits run for 7 to 10 years. How much you get depends on one thing above all: where in Maharashtra your factory is located.

Here is a story we see all the time at Bizastra.

Two factories. Same product. Same machines. Same ₹10 crore investment. One is in Pune. The other is in Wardha.

The Pune factory gets zero subsidy under PSI 2019. The Wardha factory can get up to ₹60 lakh back every year for 10 years.

Same business. Different location. A difference of crores.

That is why you should understand this scheme before you invest, not after. This guide explains the Maharashtra industrial subsidy in plain language: who qualifies, what you get, how to apply, and the mistakes that cost manufacturers real money.

What Is the Package Scheme of Incentives 2019?

PSI 2019 is Maharashtra’s flagship industrial subsidy programme for manufacturing units. The government gives eligible factories a bundle of financial benefits: SGST refund (called the Investment Promotion Subsidy or IPS), stamp duty exemption, interest subsidy on term loans, power tariff subsidy, and electricity duty exemption.

The scheme started on 16 September 2019 under GR No. PSI-2019/CR 46/IND-8. You can read the official scheme document here.

Maharashtra has run some version of this scheme since 1964. The idea has stayed the same: give bigger subsidies to factories that set up in less developed parts of the state. The more backward the area, the more money you get back.

Who Can Apply for PSI 2019?

Many people think PSI 2019 is only for small businesses. It is not. Here is who qualifies:

• Manufacturing units covered under the MSMED Act, 2006
• Large Scale Industries listed in the First Schedule of the IDRA Act, 1951
• IT and electronics hardware makers registered with MIDC, SEEPZ, or STPI
• Biotechnology manufacturing units
• Mechanised food and agro-processing units (dairy, fruits, vegetables, consumer foods)

Both new units and expansion projects can apply. Expansion units get 80% of the benefits given to new units, with one year less.

The one rule you cannot skip: you must complete at least one “effective step” on or after 1 April 2019. An effective step means buying land, getting an MIDC plot allotment, receiving MPCB consent, or incorporating your company after that date.

Who does not qualify? Units making alcohol, cigarettes, tobacco, gutkha, or banned products. Textile units covered under the separate Textile Policy 2018-23 are also out.

How Much Subsidy Can You Get? (Your Location Decides)

If you remember one thing from this article, remember this part.

Maharashtra divides its talukas into zones: Group A, B, C, D, D+, plus special categories like No-Industry Districts and Aspirational Districts. Your zone decides your subsidy percentage, how many years you get it, and whether you get the stamp duty waiver.

Here is the zone-wise breakdown for MSMEs:

Let us put real numbers on this. You invest ₹10 crore in a Group D+ taluka. Your subsidy cap is 60%, which means up to ₹6 crore back over 10 years. The same ₹10 crore in a Group B taluka gets you ₹3 crore over 7 years. In Pune city? Zero.

This is why we tell every client: pick your taluka before your plant layout. A 40 km shift in location can add crores to your subsidy.

Thrust sector bonus: Making EVs, electronics, aerospace parts, biotech products, food products, or green energy equipment? You get 20% extra subsidy and 2 extra years of benefits.

The Four Main Benefits of PSI 2019

1. SGST Refund (the Investment Promotion Subsidy)

This is the biggest benefit. The government refunds the SGST you pay on sales made within Maharashtra. MSMEs get 100% of Gross SGST back. Large Scale Industries get 50% of Net SGST.

One thing to note: only sales within Maharashtra count. Sales to other states do not earn any refund. Many manufacturers miss this and overestimate their benefit.

2. Stamp Duty Exemption

A 100% waiver on stamp duty for land purchase, lease deeds, and loan documents in C, D, D+, and backward zones. On a ₹50 crore land deal, this alone can save ₹2.5 to ₹3 crore. Not available in Group A and B areas, except for IT/BT units in designated parks.

3. Interest Subsidy on Bank Loans

A 5% per year subsidy on term loans taken for fixed capital assets like land, building, and machinery. There is a cap: your yearly interest subsidy cannot be more than your yearly electricity bill.

4. Power Tariff Subsidy

You pay ₹1 less per unit of electricity in Vidarbha, Marathwada, North Maharashtra, and parts of Konkan. In other eligible areas, it is ₹0.50 less per unit. This runs for 3 years from the start of production. For a power-hungry unit, that adds up to lakhs every year.

How to Apply for PSI 2019 (Step by Step)

The process is not hard, but the order matters. Get it wrong and your Eligibility Certificate can be delayed by months.

1. Complete your effective step. Buy land, get an MIDC allotment, get MPCB consent, or incorporate your company. The date must be on or after 1 April 2019.
2. Gather your documents. You need Udyam registration or IEM, MPCB Consent to Establish, a CA-certified Fixed Capital Investment certificate, a board resolution, and a Detailed Project Report (DPR).
3. File your application. MSMEs apply at the District Industries Centre (DIC). Large units apply through MIDC. Do this before starting production.
4. Receive your Eligibility Certificate (EC). It confirms your zone, eligible investment, subsidy cap, and benefit period.
5. Start production and make your first sale within Maharashtra.
6. File claims every year along with your GST returns and CA-certified sales data.

At Bizastra, we structure the documents and investment classification before filing, so the EC goes through without rejection. A rejected EC can cost you a full year of benefits.

Is PSI 2019 Still Active in 2026?

Yes, for now. This is the question we get asked most.

PSI 2019 was meant to run until 31 March 2024. It kept running because no replacement was ready. On 31 December 2025, Maharashtra announced MIISP 2025 as the new industrial policy, valid until 2030. But the detailed rules for the new scheme are still being published. Until they are out, PSI 2019 stays in force.

What this means for you: if you have completed your effective steps, you can still file under PSI 2019 today. If you wait, you may be moved to the new scheme, and you will get the lower of the two benefit amounts. In many backward zones, that could mean less money.

One bright spot in MIISP 2025: Group A areas like Pune and Mumbai will get subsidies for the first time (30% of investment over 5 years). Under PSI 2019, they got nothing.

5 Common Mistakes That Cost Manufacturers Crores

After 16 years and 450+ mandates, CA Ankur Surana and the Bizastra team keep seeing the same five errors:

1. Picking a location without checking the zone. A client chose a Group B taluka for supply chain reasons. A Group D taluka just 40 km away offered 20% more subsidy and 3 extra years.
2. Missing the effective step date. A company set up in 2018 with no fresh step after 1 April 2019 does not qualify. The date is strict.
3. Counting all sales, not just Maharashtra sales. The SGST refund only applies to sales within the state. If 70% of your sales go outside Maharashtra, your refund shrinks by that much.
4. No separate records for expansion projects. Expansion units must track new production and sales separately. Without this, the DIC rejects the application.
5. Skipping annual filings. Miss a year and that year’s claim is gone forever. No backdating. We have seen units lose over ₹1 crore this way.

You can also read about: MIISP 2025 Maharashtra: The New Industrial Policy

Can You Combine PSI 2019 with Central Schemes Like PLI?

Yes. PSI 2019 rewards your investment. Central schemes like PLI reward your production output. They cover different things, so you can claim both at the same time.

For example, an electronics maker in Maharashtra can claim the PSI 2019 SGST refund on a ₹20 crore investment and also earn PLI incentives on sales. We call this scheme stacking. For one electronics client, a PSI 2019 + PLI stack delivered ₹3.2 crore in benefits in Year 1 alone.

What Should You Do Now?

The PSI 2019 to MIISP 2025 transition is happening right now. Filing early could lock in your benefits before the rules change. Do these three things today:

1. Check your zone. Know your taluka’s group before you commit to land.
2. Verify your effective step. At least one step must be dated after 1 April 2019.
3. Talk to a specialist. The scheme has caps and conditions that need careful structuring.

Bizastra’s CA-led team has filed PSI 2019 applications in every zone of Maharashtra. Get a free eligibility assessment for psi 2019 government scheme with a subsidy report in 3 business days. No cost. No commitment.

📞 +91 84849 54611 · ✉ always@bizastra.com · 🌐 bizastra.com/contact-us

Frequently Asked Questions

What is the Package Scheme of Incentives 2019 in simple words?

It is the Maharashtra government’s subsidy scheme for factories. Set up or expand a manufacturing unit in the state and the government refunds part of your SGST, waives stamp duty, subsidises your loan interest, and lowers your power bill. Benefits last 7 to 10 years based on your location.

How much subsidy can I get under PSI 2019?

MSMEs can recover 30% to 100% of their Fixed Capital Investment, depending on the zone. A ₹10 crore investment in a D+ zone can return up to ₹6 crore over 10 years. Group A areas like Pune and Mumbai get no subsidy under PSI 2019.

Is PSI 2019 only for MSMEs?

No. MSMEs get the best rates, but Large Scale Industries, Special LSI units, and even mega projects qualify. Mega and ultra-mega projects can get customised packages through the High Power Committee.

Can I still apply for PSI 2019 in 2026?

Yes, for now. PSI 2019 stays in force until the new MIISP 2025 rules are fully published. If your effective steps are done, file soon. Units that wait may fall under the new scheme and receive the lower of the two benefits.

What is an “effective step” under PSI 2019?

It is proof that your project moved forward after 1 April 2019. Buying land, getting an MIDC plot, receiving MPCB consent, or incorporating your company all count. At least one of these must be dated on or after 1 April 2019.

Do I need a consultant to apply for PSI 2019?

You can apply on your own. But the scheme involves zone classification, CA-certified investment calculations, and yearly compliance filings. One error in the Eligibility Certificate application can delay benefits by a year. Bizastra handles end-to-end PSI advisory, from documents to disbursement.

What is the difference between PSI 2019 and MIISP 2025?

PSI 2019 is the current scheme. MIISP 2025 is the new policy announced on 31 December 2025, valid until 2030. The biggest change: Group A zones (Pune, Mumbai) get subsidies under MIISP 2025 but got nothing under PSI 2019. The detailed MIISP rules are still being released, so PSI 2019 remains operative for now.

Source: Official PSI 2019 GR