Incentive for Setting up a Power Sub Station

Incentive for Setting up a Power Sub Station is a support given to private industrial park developers in West Bengal to build reliable power infrastructure for MSME units. Under the West Bengal Incentive Scheme for Approved Industrial Park (SAIP), the state government used to set up power substations free of cost for approved parks. The SAIP 2020 scheme ran for five years from 16th September 2020 and closed on 15th September 2025.

West Bengal has now approved a new West Bengal Incentive Scheme (WBIS) 2026 for MSMEs that will come into effect from 1st October 2026. This new scheme continues to support power substations and other infrastructure in approved industrial parks through cluster-based incentives. As of 13th August 2026, the new scheme is approved and will remain in force for five years until 30th September 2031.

Incentive for Setting up a Power Sub Station - Introduction

Incentive for Setting up a Power Sub Station was a key part of the West Bengal Incentive Scheme for Approved Industrial Park (SAIP) for MSMEs. It helped private industrial parks secure a reliable power supply by arranging substations at no cost to the developer. The scheme was launched on 16th September 2020 by the Department of Micro, Small & Medium Enterprises and Textiles and stayed in force for five years.

The main aim was to encourage the private sector to develop well-planned industrial parks and provide direct support for power substations. When the need for a substation was justified and approved, the state government agency constructed it free of cost. The developer only needed to provide suitable land for the substation.

With the SAIP 2020 scheme now closed, power substation support continues under the new West Bengal Incentive Scheme (WBIS) 2026. Under this new scheme, MSME clusters set up in government-approved industrial parks can get infrastructure support covering common effluent treatment plants, internal roads, drainage systems and power substations. A cluster must have at least five MSMEs, a minimum investment of Rs 250 crore and direct employment of at least 500 workers. The total subsidy for each eligible cluster is capped at Rs 5 crore.

Key Information

Benefits

Under the SAIP 2020 scheme, this support arranged for the setting up of a Power Sub-Station fully free of cost. It served as a non-fiscal incentive that reduced capital expenditure and helped developers provide better facilities to the MSMEs within their park.

Under the new WBIS 2026 scheme, power substations are covered as part of cluster-based infrastructure support. Eligible clusters in approved industrial parks can get help for common effluent treatment plants, internal roads, drainage systems and power substations. The total subsidy for each eligible cluster is capped at Rs 5 crore, which helps reduce the heavy upfront cost of electrical infrastructure.

Eligibility

Under the new WBIS 2026 scheme, the following criteria apply for cluster-based infrastructure support:

• The cluster must be set up in a government-approved industrial park.
• It must have at least five MSME units in the cluster.
• The minimum investment for the cluster should be Rs 250 crore.
• The cluster must provide direct employment to at least 500 workers.

Under the earlier SAIP 2020 scheme, a developer had to be a private sector entity or operate an existing industrial park. The Special Purpose Vehicle (SPV) had to be registered under the Companies Act, Societies Registration Act, Partnership Act, or as an LLP, and hold a minimum of 5 acres of legally owned land.

Application Process

The new WBIS 2026 scheme comes into effect from 1st October 2026. Applications under the new scheme will be accepted once it is operational. The process for claiming infrastructure support is given below.

STEP 1 - Keep the MSME cluster registered and obtain Udyam Registration for the units that begin commercial production on or after 1st October 2026.

STEP 2 - Check the official website of the Micro, Small & Medium Enterprises and Textiles Department at wbmsmet.gov.in for the WBIS 2026 notification and application forms.

STEP 3 - Prepare the required documents, including the cluster project details, investment proof and employment records.

STEP 4 - Submit the application online through the official portal once the new scheme is live, and keep a printout of the submitted form for records.

Documents

Keep digital copies of the following documents ready for the application:

1. Registration certificate of the SPV or cluster.
2. Memorandum and Articles of Association.
3. Financial statements (Balance Sheet and Profit & Loss) for the last 3 years.
4. Valid land deed or proof of legal possession.
5. Detailed Project Report (DPR) and approved layout plan.
6. Consent to Establish Certificate from the West Bengal Pollution Control Board (WBPCB).
7. Chartered Accountant certified expenditure statement.
8. Copies of all relevant statutory clearances and licenses for the park.

References

Official MSME & T Department | MSME Directorate West Bengal | WBIS 2026 News Update | SAIP Amendments | Frequent Asked Questions

FAQ's

What is the primary objective of this scheme?

The scheme helps private industrial parks get reliable power by supporting the installation of power substations, so that MSME units can operate without power problems.

Who is eligible to apply under the new WBIS 2026 scheme?

Under WBIS 2026, MSME clusters in government-approved industrial parks with at least five units, a minimum investment of Rs 250 crore and direct employment of at least 500 workers can get infrastructure support that includes power substations.

What role does an SPV play?

An SPV is responsible for the design, development, financing, construction, management, and maintenance of the industrial park. It must be registered under the Companies Act to handle these responsibilities.

What infrastructural facilities are included?

Common facilities include internal roads, street lighting, drainage, water distribution, telecommunications, firefighting infrastructure, and electricity networks that serve the MSME units within the park.