Patna: Bihar government will provide land for new sugar mills at a token price of Rs 1 under its newly approved Bihar Sugarcane Industry Promotion Policy-2026, aimed at reviving the sugar sector and attracting large-scale industrial investment in the state.
The policy, cleared by the state Cabinet, includes multiple financial incentives, tax reimbursements and integrated industrial planning for sugar-based industries, officials said on Thursday.
Land Allotment and Lease Framework
Under the policy, land owned by the Sugarcane Industries Department or the Bihar State Sugar Corporation will be made available for new sugar mills.
Each project can access up to 40 acres of land on a 30-year lease at a symbolic price of Rs 1. The government said the move is designed to reduce entry barriers for investors in the sector.
Tax Reimbursements and Fiscal Support
The policy also provides 100% reimbursement of registration and stamp duty on land transactions.
In addition, there will be full reimbursement of SGST on sugar production for five years, aimed at improving project viability and cash flow for investors.
Grants Linked to Production Capacity
Sugarcane Industries Minister Sanjay Kumar said the policy marks a significant shift in industrial promotion strategy and described it as the first initiative of its kind in the country.
He said projects with a capacity of 5,000 tonnes crushed per day (TCD) will be eligible for grants of up to Rs 100 crore over five years. Units with 3,500 TCD capacity will receive financial assistance of up to Rs 70 crore.
For existing mills, expansion of at least 1,000 TCD will attract incentives of Rs 15 crore, with additional support for larger expansions.
Modern Sugar Complex Model
The policy introduces the concept of “Modern Sugar Complexes,” integrating sugar mills with distilleries, ethanol plants, power generation units and compressed biogas (CBG) facilities.
Officials said the model is designed to improve efficiency and ensure value addition across the production chain.
Investment Incentives for Industry Upgrade
A capital subsidy of 20% (up to Rs 5 crore) will be provided for modernisation and conversion of operational sugar mills to international standards.
For ethanol and distillery units, the state will offer 15% assistance on plant and machinery investment, capped at Rs 5 crore, along with interest subsidies and full SGST reimbursement on ethanol production.
Revival and Expansion Targets
The policy is part of the Saat Nischay-3 programme, under which Bihar aims to revive closed sugar mills and establish 25 new units.
Departmental Secretary Dharmendra Singh, Cane Commissioner Anil Kumar Jha, and Joint Cane Commissioner Vedvrat were present at the briefing where the policy details were shared.
