Viksit Gujarat Industrial Policy 2026
Power Tariff Subsidy in Gujarat under the Viksit Gujarat Industrial Policy 2026
Gujarat now reimburses ₹2 per unit of electricity in Category-A talukas and ₹1 per unit in Category B — for five years for MSMEs and 8 to 12 years for Large, Mega and Ultra Mega units — capped at 10% to 25% of EFCI, on power bought from a DISCOM or renewable power through open access.
20+ years in Gujarat incentives300+ projects99% filing success
₹2 a unit in Category-A talukas and ₹1 in Category B. Example: 10 lakh units a year earn ₹20 lakh, paid within the annual and combined ceilings.
- ₹1–2per unit, by taluka category
- 5–12 yrsMSMEs 5 · Large, Mega, Ultra Mega 8–12
- 10–25%of EFCI — the cap
On this page
Power tariff subsidy under VGIP 2026, in brief
The power tariff subsidy under the Viksit Gujarat Industrial Policy 2026 reimburses ₹2 for every unit of electricity a Category-A unit consumes and ₹1 per unit in Category B, for 5 years (MSMEs) to 8–12 years (Large, Mega and Ultra Mega), up to 10%–25% of EFCI. It applies to power bought from a DISCOM or renewable power through open access — never to your own captive generation.
What is a power tariff subsidy? A per-unit reimbursement of part of your electricity cost, claimed against the bills your distribution company raises. In VGIP 2026 it is Component-3 of the package — alongside capital subsidy and interest subsidy, within one combined ceiling — and it needs no term loan: what you earn depends only on the units billed by your DISCOM or open-access supplier and your taluka category, and what is paid is then limited by ceilings set as a share of your EFCI.
- Rate
- ₹2 per unit (kWh) in Category-A talukas · ₹1 per unit in Category B — the same for MSMEs and Large units
- Period
- MSMEs 5 years · Large 10 years (general) or 8 years (thrust and selected thrust) · Mega 10 years · Ultra Mega 12 years, from the date of commercial production
- Cap
- MSMEs 25% of EFCI (20% in selected thrust sectors) · Large 10–20% · Mega and Ultra Mega 20–25%
- Expansion or diversification
- Only the additional consumption of the new project counts, measured on a sub-meter
- Eligible power
- Supply from your distribution licensee — UGVCL, MGVCL, PGVCL, DGVCL, Torrent Power or another licensed distributor (SEZ, GIFT City or port) — or renewable power bought through open access. Captive generation is excluded.
- Claimed
- After the Provisional or Final Eligibility Certificate, on electricity bills or invoices in the unit’s name; Large units file every three months
Power tariff subsidy rates by size, sector and taluka
Eligible MSMEs can claim ₹2 per unit in a Category-A taluka or ₹1 per unit in Category B, for five years from the date of commercial production, up to 25% of EFCI — 20% in the five selected thrust sectors. Large, Mega and Ultra Mega units get the same per-unit rate for 8 to 12 years, with caps from 10% to 25% of EFCI; for big consumers the annual ceiling, not the per-unit rate, limits the payout.
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| Taluka | Rate | Period | Cap | Combined ceiling |
|---|---|---|---|---|
| General sectors | ||||
| Category A | ₹2 per unit | 5 years | 25% of EFCI | 45% |
| Category B | ₹1 per unit | 5 years | 25% of EFCI | 35% |
| Selected thrust sectors | ||||
| Category A | ₹2 per unit | 5 years | 20% of EFCI | 50% |
| Category B | ₹1 per unit | 5 years | 20% of EFCI | 45% |
Selected thrust sectors: sports goods, toys, footwear, robots and drones, plus any sector notified later; other thrust sectors use the general-sector rates for MSMEs. Micro, small and medium enterprises all receive the same per-unit rate; size affects only the annual ceilings — 9% of EFCI a year in Category A and 7% in Category B for small and medium units (10% / 9% in selected thrust sectors), micro units 37% / 27% in Year 1 (38% / 33%), then 2% (3%). Take the full capital subsidy and about 2% of EFCI a year is left for power tariff and interest subsidy together (3% in selected thrust sectors); nothing unused carries forward.
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| Category | Rate per unit | Period | Cap | Combined ceiling |
|---|---|---|---|---|
| LargeGeneral sectors | ₹2 / ₹1 | 10 years | 15% / 10% | 20% / 15% |
| LargeThrust sectors | ₹2 / ₹1 | 8 years | 20% / 15% | 35% / 25% |
| MegaThrust sectors | ₹2 / ₹1 | 10 years | 25% / 20% | 35% / 30% |
| Ultra MegaThrust sectors | ₹2 / ₹1 | 12 years | 25% / 20% | 40% / 35% |
| LargeSelected thrust sectors | ₹2 / ₹1 | 8 years | 20% / 20% | 50% / 45% |
| MegaSelected thrust sectors | ₹2 / ₹1 | 10 years | 20% / 20% | 50% / 45% |
| Ultra MegaSelected thrust sectors | ₹2 / ₹1 | 12 years | 20% / 20% | 50% / 45% |
Large units must apply for registration with the Industries Commissionerate before production starts (or by 8 December 2026, if later). Mega means a thrust-sector project with at least ₹1,000 crore of gross fixed capital investment and 250 direct jobs, plus 50 jobs for every further ₹200 crore; Ultra Mega, at least ₹10,000 crore and 3,000 jobs, plus 500 for every further ₹5,000 crore. Absolute annual ceilings of ₹150 crore (Large, general), ₹300 crore (Large, thrust and selected thrust), ₹750 crore (Mega) and ₹1,250 crore (Ultra Mega) apply to all components together. As we read the 2022 GRs, the Aatmanirbhar Gujarat Scheme’s headline benefit for Large industries was reimbursement of net SGST; VGIP 2026 has no SGST component, so part of the incentive now depends on your electricity consumption rather than on your sales and GST position.
Units × rate, within three limits
Your subsidy in any year is the units you consumed multiplied by ₹2 or ₹1 — then cut to the annual ceiling, the lifetime cap of 10–25% of EFCI, and the combined ceiling you share with capital and interest subsidy. For an MSME taking the full capital subsidy, the annual room of about 2% of EFCI is the first limit it can hit — above roughly 10 lakh units a year for every ₹10 crore of EFCI in Category A (20 lakh in Category B; 15 and 30 lakh in selected thrust sectors), extra consumption earns nothing.
- Earned: units billed by your DISCOM or open-access supplier in the year × ₹2 (Category A) or ₹1 (Category B).
- Annual ceiling: every year the three components together cannot exceed a set share of EFCI — 9% / 7% for small and medium enterprises, 2% / 1.5% for general-sector Large units — and unused room does not carry forward.
- Lifetime cap: the power tariff subsidy on its own stops at 25% of EFCI for MSMEs (20% in selected thrust sectors) and 10–25% for Large units and above.
- Combined ceiling: capital, interest and power tariff subsidy together stop at 35–50% of EFCI for MSMEs and 15–50% for Large units and above.
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| EFCI | Room left per year | Category A (₹2 per unit) | Category B (₹1 per unit) |
|---|---|---|---|
| ₹5 crore | ₹10 lakh a year | 5 lakh units≈ 41,667 units a month | 10 lakh units≈ 83,333 units a month |
| ₹10 crore | ₹20 lakh a year | 10 lakh units≈ 83,333 units a month | 20 lakh units≈ 1.67 lakh units a month |
| ₹25 crore | ₹50 lakh a year | 25 lakh units≈ 2.08 lakh units a month | 50 lakh units≈ 4.17 lakh units a month |
| ₹50 crore | ₹1 crore a year | 50 lakh units≈ 4.17 lakh units a month | 1 crore units≈ 8.33 lakh units a month |
Consumption above these figures earns nothing extra in any of the five years. Leaving capital subsidy unclaimed only swaps it for power tariff subsidy under the same combined ceiling, so it never raises the total. A Category-B unit needs twice the units to earn the same rupees.
Which power qualifies for the subsidy
Power bought from a distribution company or renewable power bought through open access qualifies. Power from your own captive plant does not, and an expanding unit is paid only on the additional consumption of the new project, measured on a sub-meter.
Qualifies
- Supply from your distribution licensee — UGVCL, MGVCL, PGVCL or DGVCL, Torrent Power in Ahmedabad, Gandhinagar, Surat and Dahej SEZ, or another licensed distributor (SEZ, GIFT City or port)
- Renewable power bought through open access, such as solar or wind power from a third-party generator
- For an expansion or diversification, the additional consumption of the new project, recorded on a sub-meter
- Consumption from the date of commercial production, billed in the enterprise’s own name
Does not qualify
- Power generated in your own captive power plant — including a captive solar plant, rooftop or ground-mounted
- The existing unit’s own consumption, before and after an expansion — only the increase counts (for micro units without a sub-meter, the average of the past three years, or of the period the unit has existed, is deducted)
- Bills or invoices that are not in the enterprise’s name
- Consumption before the date of commercial production, or after the incentive period ends
A unit is one kilowatt-hour (kWh) as billed by your supplier. The GRs set the subsidy per unit, so demand charges, fixed charges, fuel surcharge and electricity duty do not change it. The electricity duty exemption under the Gujarat Electricity Duty Act, 1958 is a separate benefit that both GRs provide for, as applicable under the Act; on our reading it sits outside these ceilings.
Power tariff subsidy calculator
Enter your EFCI and one electricity figure — monthly units, your monthly bill or your contract demand in kVA. A bill is converted at ₹8 a unit; contract demand assumes two shifts (416 hours a month at 0.6 load factor and 0.9 power factor). The calculator applies the per-unit rate, the annual room after capital subsidy, the lifetime cap and the combined ceiling, year by year.
Don’t know where your taluka falls? Look it up in the taluka category GR (PDF, district-wise list) or read Category A or B on our capital subsidy page. Category A carries the higher rates; if in doubt, ask us to confirm it in writing.
Estimated power tariff subsidy
—
Enter your EFCI (in ₹ crore) to see the estimate.
- Consumption used in the estimate—
- Subsidy earned per year (units × rate)—
- Payable in Year 1 within the annual room—
- Maximum alongside the full capital subsidy—
Indicative only. It assumes steady consumption, the capital subsidy in equal instalments (in one year for micro units) and no interest subsidy — interest and power tariff subsidy share the same annual room. A bill is converted at ₹8 per unit; contract demand at two shifts (416 hours a month, 0.6 load factor, 0.9 power factor). Actual claims are based on the units billed by your DISCOM or open-access supplier.
Get this estimate checkedWorked examples
Three round-figure illustrations. The same 50,000 units a month earns twice as much in a Category-A taluka as in Category B, and a large consumer runs into the annual ceiling long before the per-unit rate matters.
Power tariff, interest and capital subsidy together
Power tariff and interest subsidy share whatever the capital subsidy leaves under the combined ceiling: 10% of EFCI for MSMEs in general sectors (15% in selected thrust sectors), 5% for general-sector Large units — released at about 2% or 3% of EFCI a year for MSMEs.
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| Segment | Capital subsidy | Combined ceiling | Left for interest + power |
|---|---|---|---|
| MSME — general sectors | 35% / 25% | 45% / 35% | 10% of EFCI |
| MSME — selected thrust sectors | 35% / 30% | 50% / 45% | 15% of EFCI |
| Large — general sectors | 15% / 10% | 20% / 15% | 5% of EFCI |
| Large, Mega, Ultra Mega — thrust sectors | 25–30% / 15–25% | 35–40% / 25–35% | 10% of EFCI |
| Large, Mega, Ultra Mega — selected thrust | 35% / 30% | 50% / 45% | 15% of EFCI |
- Simpler to claim. Power tariff subsidy has no lender, no default periods and no 2% floor — and for a power-intensive unit without much debt it can be the larger of the two.
- Loan-heavy projects. For a unit with a big term loan, the interest subsidy may absorb the room first.
- Plan the split early. Unused room does not carry forward, so the split between the two should be planned before the eligibility certificate is issued, not after.
- Outside the ceiling. Electricity duty exemption and EPF reimbursement are separate provisions of the GRs and, on our reading, do not use up this room; across all state and central schemes, total incentives cannot exceed your EFCI.
How to claim power tariff subsidy in Gujarat
Power tariff subsidy is claimed after the eligibility certificate, against your electricity bills — so the connection, the metering and the paperwork have to be right from the first month of production.
Get the connection in the enterprise’s name
The DISCOM connection, or the open-access agreement, must be in the name of the enterprise that will claim. Bills in a promoter’s, landlord’s or group company’s name are not accepted. Large, Mega and Ultra Mega units must also register with the Industries Commissionerate before production starts (or by 8 December 2026, if later).
Before production startsInstall a sub-meter for an expansion
If you are expanding or diversifying an existing unit, only the additional consumption of the new project is eligible, and the GRs require a sub-meter to measure it. Micro units without one are assessed against their past three-year average.
Before the new project starts drawing powerApply for PEC or FEC
MSMEs apply within six months of the date of commercial production, or of 25 September 2026 if later; Large units within three months of production, the registration certificate or 8 September 2026, whichever is latest. If the investment finishes after production starts, the Final Eligibility Certificate is due within six months (MSMEs) or three months (Large) of completion or of the end of the eligible investment period.
Claims start after the certificateFile claims with your bills
Submit copies of the electricity bills or open-access invoices for the period, in the format the Commissionerate prescribes. Micro and small units are sanctioned by the GM, District Industries Centre and medium units by the MSME Commissioner; Large units file every three months with the Industries Commissioner.
Stay in production and keep the records
The unit must stay in continuous production for the incentive period, keep at least 85% of all employees and 60% of managerial and supervisory staff Gujarat-domiciled, and hold the applicable GPCB consent. On breach, disbursed subsidy is recoverable with 18% interest a year from the date of first availment.
Late is expensive. An MSME that files its FEC after the six-month limit, but within two years, has both the incentive period and the amount cut in proportion to the delay; after two years the claim is not entertained. For Large units the outer limit is one year.
Old scheme or new? Your six-month option window
If your unit had not started commercial production before 1 June 2026, you can opt for the Aatmanirbhar Gujarat Scheme instead of VGIP 2026 by applying within six months of the relevant GR — by 25 March 2027 for MSMEs, 8 March 2027 for Large units — and only if commercial production starts by 4 October 2027; the choice is final. Of the two, only VGIP 2026 has a per-unit power tariff subsidy; choosing the old scheme means giving it up. A unit that started production before 1 June 2026 stays on the old scheme.
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| Aatmanirbhar Gujarat (2022) | VGIP 2026 | |
|---|---|---|
| Operative period | 5 Oct 2022 – 4 Oct 2027 | 1 Jun 2026 – 31 May 2031 |
| Per-unit power tariff subsidy — MSMEs | Not a component (as we read the 2022 GR, its main incentives were capital subsidy for micro units, interest subsidy and net SGST reimbursement) | ₹2 (Category A) or ₹1 (Category B) per unit for 5 years, up to 25% of EFCI (20% in selected thrust sectors) |
| Per-unit power tariff subsidy — Large and above | Not offered; as we read the 2022 GRs, the headline benefit was reimbursement of net SGST | ₹2 or ₹1 per unit for 8–12 years, up to 10–25% of EFCI; no SGST component |
| Electricity duty exemption | Under the Gujarat Electricity Duty Act, 1958 | Provided for by both GRs, as applicable under the Act; on our reading, outside the ceiling |
See the capital subsidy comparison for the rest of the package.
Where power tariff subsidy claims get cut
Power tariff subsidy is lost to metering and paperwork more often than to the rules — the wrong name on the bill, no sub-meter, or captive power counted as eligible.
- Bills in the wrong name.Claims are accepted only on electricity bills or invoices in the enterprise’s own name.
- Counting captive power.Units from your own captive plant — including a captive solar plant — are excluded. Renewable power qualifies only when bought through open access.
- No sub-meter on an expansion.Small, medium and Large units cannot claim without one; micro units without one are measured against their past three-year average instead.
- Ignoring the annual room, or claiming twice.With the full capital subsidy, MSMEs have about 2% of EFCI a year (3% in selected thrust sectors) for power tariff and interest subsidy together, and nothing carries forward. A unit that has taken incentives for the same investment under another State scheme is not eligible unless the GR provides otherwise; across all state and central schemes, total incentives cannot exceed EFCI.
- Choosing a site without checking the category, or filing late.₹1 versus ₹2 per unit doubles the subsidy on the same consumption, and newly created talukas can differ from their neighbours. Late FECs lose incentive period and amount in proportion — and no power tariff claim can start before the certificate.
How we help with power tariff subsidy
NeoApex Saver Pvt Ltd (formerly Apex Consultants) has worked on Gujarat industrial incentives for over two decades. On a power tariff subsidy file we:
- Confirm your taluka category and unit classification in writing before you commit to a site
- Model consumption against the annual room so power tariff and interest subsidy are split to your advantage
- Set up the connection, open-access and sub-metering paperwork the GRs require, from day one of production
- Prepare PEC and FEC applications and the periodic claims, and keep every bill and certificate audit-ready for the full period
Power tariff subsidy across Gujarat’s industrial belts
The subsidy is ₹2 a unit in a Category A taluka and ₹1 a unit in Category B, on power bought from your distribution licensee or renewable power through open access. Most of Gujarat’s established estates — Sanand, Changodar, Kadi, Vadodara, Halol, Savli, Ankleshwar, Jhagadia, Dahej, Surat, Hazira, Vapi, Gandhidham, Anjar and Mundra — are listed as Category B in the 2026 taluka list, so ₹1 a unit is the usual rate and Dholera, at ₹2, the main exception near a large city. Confirm the category in writing before you file. What matters more than the rate is the load: a 2,000 kVA connection running two shifts (0.9 power factor, 0.6 load factor, 416 hours a month) draws about 54 lakh units a year — ₹54 lakh at ₹1 a unit, more than the ₹20 lakh of annual room a ₹10 crore project has left after its capital subsidy.
South Gujarat — DGVCL
Bharuch, Ankleshwar, Jhagadia, Panoli, Dahej and Vagra; Surat, Hazira and Sachin; Vapi, Sarigam, Umbergaon and Valsad. Chemical, pharma and textile-processing loads are the largest in the state; Torrent Power bills Surat city and the Dahej SEZ, and both count as distribution licensees.
Ahmedabad belt — UGVCL
Sanand, Changodar, Bavla, Vatva, Naroda and Kathwada; Dholera SIR; Kadi, Mehsana, Becharaji, Mandal and Himmatnagar. Auto-component and engineering plants, often expanding on the same meter — an expansion claims only the additional consumption, on a sub-meter.
Vadodara — MGVCL
Vadodara, Halol, Savli, Waghodia and Nandesari. Capital-goods and pharma units, many buying renewable power through open access, which qualifies; power from a captive plant on the premises does not.
Kutch — PGVCL
Gandhidham, Anjar, Mundra and Bhuj. Steel, pipe and edible-oil plants with large connected loads, where the room left under the annual ceiling after the capital subsidy — not the load — is usually the binding limit.
Also served. Saurashtra on PGVCL — Rajkot, Morbi, Jamnagar, Bhavnagar and Surendranagar — where ceramic kilns and foundries make the subsidy worth modelling before the capital subsidy mix is fixed.
- Vadodara
- Ankleshwar
- Vapi
- Rajkot
- Morbi
- Jamnagar
- Bhavnagar
- Surendranagar
- Gandhidham
- Anjar
- Himmatnagar
Bills must be in the enterprise’s name and the claim opens only after the eligibility certificate; the electricity duty rate in Gujarat (15% on HT, 10% on LT) is waived for five years under a separate, statutory exemption on the same bill — claim both.
Power tariff subsidy in Gujarat: frequently asked questions
What is the power tariff subsidy under the Viksit Gujarat Industrial Policy 2026?
It reimburses ₹2 per unit of electricity consumed by a unit in a Category-A taluka and ₹1 per unit in Category B, for five years for MSMEs and 8 to 12 years for Large, Mega and Ultra Mega units, up to 10%–25% of eligible fixed capital investment (EFCI). It is Component-3 of the package, alongside capital and interest subsidy, within one combined ceiling.
How much is the power tariff subsidy per unit in Gujarat?
₹2 per unit (kWh) in Category-A talukas and ₹1 per unit in Category-B talukas — the same rate for MSMEs and for Large, Mega and Ultra Mega units. The rate does not change with your tariff, your connected load or your sector; only the period and the cap do.
Does solar or wind power qualify for the power tariff subsidy?
Renewable power qualifies when it is bought through open access from a third-party generator. Power from your own captive plant — including a captive solar plant on your roof or land — does not qualify under either GR.
Can an expansion claim power tariff subsidy on its whole consumption?
No. For an expansion or diversification only the additional consumption of the new project is eligible, and the GRs require a sub-meter to measure it. Micro enterprises without a sub-meter are assessed on the increase over their average consumption of the past three years, or of the period the unit has existed.
What is the maximum power tariff subsidy I can get?
For MSMEs, 25% of EFCI (20% in selected thrust sectors). For Large units, 10% to 20%; for Mega and Ultra Mega units, 20% to 25%, depending on sector and taluka. In practice the annual ceiling shared with capital and interest subsidy is the limit that bites first: after the full capital subsidy, MSMEs have 10% of EFCI left for power tariff and interest subsidy together in general sectors and 15% in selected thrust sectors, released at about 2% or 3% of EFCI a year.
How is the power tariff subsidy claimed?
After the Provisional or Final Eligibility Certificate is issued, you file claims with copies of the electricity bills or open-access invoices in the enterprise’s name, in the format the Commissionerate prescribes. Micro and small units are sanctioned by the District Industries Centre, medium units by the MSME Commissioner, and Large units by a committee for their investment size, with claims filed every three months. No term loan is needed: a self-financed unit qualifies on the same terms.
Is the electricity duty exemption the same as the power tariff subsidy?
No. Electricity duty exemption under the Gujarat Electricity Duty Act, 1958 is a separate benefit that both GRs provide for: eligible units are exempted from electricity duty to the extent the Act provides, and on our reading it sits outside the VGIP 2026 ceilings. The power tariff subsidy is a per-unit cash reimbursement within the ceiling.
Did the Aatmanirbhar Gujarat Scheme have a power tariff subsidy?
As we read the 2022 GRs, no: they offered net SGST reimbursement and interest subsidy (and capital subsidy for micro units), but no per-unit power tariff subsidy. VGIP 2026 drops the SGST reimbursement and pays capital, interest and per-unit power tariff subsidy instead, for MSMEs and for Large, Mega and Ultra Mega units.
Download the Government Resolutions
Every VGIP 2026 figure on this page comes from three Government Resolutions of the Industries & Mines Department. Read them yourself — or send us your project and we will read them for you.
Scheme for assistance to MSMEs
GR No. IMD/Capital, interest and power tariff subsidy, EPF, CGTMSE, rent and the other MSME components.
Download PDFScheme for Assistance to Large, Mega and Ultra Mega Industries
GR No. IMD/Definitions, incentive matrices for every category, registration and PEC/FEC rules, thrust-sector list.
Download PDFCategory-wise classification of talukas
GR No. IMD/District-wise annexure of the 130 Category-A and 138 Category-B talukas that set the rates.
Download PDFSources. Industries & Mines Department, Government of Gujarat — the three Government Resolutions above, read in full. Old-scheme statements reflect our reading of the Aatmanirbhar Gujarat Schemes for assistance to MSMEs (GR MIS-102022-1271(1)-I(Ch)), to Large Industries and Thrust Sector (GR MIS-102022-1271(2)-I) and to Mega Industries (GR MIS-102022-1271(3)-I), all dated 05.10.2022. Rates are the maximums the GRs allow; your entitlement is fixed by the sanctioning authority after asset verification. Worked examples use round figures and our reading of the GRs’ ceilings. The MSME Commissioner may issue separate implementation guidelines (para 22.5 of the MSME GR); we update this page when they appear. Useful official portals: Industries Commissionerate, Gujarat and the Investor Facilitation Portal.
Know what your power bill is worth before you sign the connection
Send us your taluka, EFCI and expected consumption. We’ll show how much power tariff subsidy you can actually draw under VGIP 2026 — year by year, alongside capital and interest subsidy.