Govt notifies Rs 3,030-crore scheme for three mega chemical parks
The Union Cabinet approved the Bharat Audyogik Vikas Yojana Rasayan (BHAVYA-Rasayan) Scheme, notifying a financial outlay of Rs 3,030 crore for setting up three dedicated mega chemical parks.
Of the total outlay, Rs 3,000 crore is earmarked for common infrastructure facilities and basic utilities inside the parks, while Rs 30 crore is set aside for administrative expenditure.
Each park will require a minimum of 8 sq. km (about 2,000 acres) of encumbrance-free land and will be selected through a challenge/competitive route among state governments.
The Centre will provide a grant of up to Rs 1,000 crore per park, contingent on the concerned state government contributing a minimum of Rs 500 crore.
The scheme will run for five years, from FY 2026-27 to FY 2030-31, and is expected to catalyse private investment of Rs 20,000-50,000 crore per park.
Union List Entry and the Rationale for Industrial Parks Schemes
Setting up industrial parks with common infrastructure is a Central government tool to lower the entry barrier for capital-intensive manufacturing, particularly in sectors with high compliance costs such as chemicals (effluent treatment, hazardous waste handling). Chemicals fall under the "Industries" head, where the Centre and states share jurisdiction: Entry 24 (List II, State List) covers industries generally, but Entry 52 (List I, Union List) allows Parliament to declare an industry to be under Union control "in the public interest," triggering entries like Entry 7 and Entry 33 (List III, Concurrent List) for controlled industries. Chemical manufacturing safety and hazardous substances are also governed under the Environment (Protection) Act, 1986.
Key Details
- Industries are primarily a State subject (Entry 24, State List) unless Parliament declares control expedient in public interest (Entry 52, Union List).
- The Ministry of Chemicals and Fertilizers, through the Department of Chemicals and Petrochemicals, is the nodal ministry for the chemicals sector.
- A precedent scheme, the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) policy (2007), similarly aimed to create integrated industrial regions for chemicals with common infrastructure.
BHAVYA-Rasayan follows the PCPIR model of state-facilitated, centrally-funded common infrastructure, but is a fresh, more targeted scheme announced in the Union Budget 2026-27 to reduce logistics and compliance costs for the chemicals sector and boost self-reliance ("Atmanirbhar Bharat").
Common Infrastructure Model in Industrial Park Schemes
Government-funded industrial parks typically separate "common infrastructure" (funded by the state) from "production infrastructure" (funded by private investors), a model also used in schemes like the Special Economic Zones (SEZ) Act, 2005 and PM MITRA (textile) parks. Common infrastructure includes utilities that no single private firm would build alone — Common Effluent Treatment Plants (CETPs), hazardous waste disposal, solvent recovery units, and steam/pipeline networks — because they carry high fixed costs and regulatory complexity, and their benefits pool across all park occupants.
Key Details
- CETPs are mandated under the Water (Prevention and Control of Pollution) Act, 1974 and Environment (Protection) Act, 1986 rules for clusters of polluting industries.
- The "multiplier effect" logic (Rs 3,030 crore public spend expected to catalyse Rs 60,000-1,50,000 crore of private investment across three parks) mirrors the rationale used for PM Gati Shakti-aligned infrastructure schemes.
The BHAVYA-Rasayan Scheme funds exactly this category of common infrastructure — CETPs, hazardous waste facilities, water supply, and steam networks — leaving individual plant construction to private players competing for space within the park.
- Total scheme outlay: Rs 3,030 crore (Rs 3,000 crore infrastructure + Rs 30 crore administrative).
- Central grant: up to Rs 1,000 crore per park, subject to a minimum state contribution of Rs 500 crore.
- Minimum land requirement per park: 8 sq. km (~2,000 acres), greenfield or brownfield.
- Implementation period: FY 2026-27 to FY 2030-31 (5 years).
- Expected private investment per park: Rs 20,000-50,000 crore.
- Number of parks: three, selected via a challenge route among state governments.