CHANDIGARH
Despite the Centre’s push to scale up India’s domestic manufacturing powerhouse, Punjab has secured a mere ₹4.28 crore over the last two fiscal years under the ministry of heavy industries’ flagship capital goods promotion scheme.
This highly restricted funding went toward a single infrastructure project in Ludhiana, exposing a sharp contrast between central ambitions and ground-level support for the state’s vital manufacturing base.
Responding to an unstarred question by Aam Aadmi Party (AAP) MP Malvinder Singh Kang in the Lok Sabha, minister of state for heavy industries Bhupathiraju Srinivasa Varma said the assistance was released under the Scheme for Enhancement of Competitiveness in the Indian Capital Goods Sector – Phase II, a pan-India, demand-driven programme notified on January 25, 2022.
The government also clarified that there is no proposal at present from the Punjab government to enhance the scheme’s allocation, suggesting that future support would continue within the existing financial outlay. The ministry reiterated that assistance under the scheme is project-based and depends on eligible proposals submitted by implementing agencies, rather than any state-wise allocation formula.
Under the scheme, the ministry sanctioned only one project for Punjab — the augmentation of the existing testing and certification facility at the Institute for Auto Parts and Hand Tools Technology (IAHT), Ludhiana, aimed at strengthening testing and certification infrastructure for the state’s engineering and manufacturing sectors.
{{/usCountry}}Under the scheme, the ministry sanctioned only one project for Punjab — the augmentation of the existing testing and certification facility at the Institute for Auto Parts and Hand Tools Technology (IAHT), Ludhiana, aimed at strengthening testing and certification infrastructure for the state’s engineering and manufacturing sectors.
{{/usCountry}}The Centre approved a contribution of ₹8.12 crore towards the project’s total cost of ₹10.15 crore. Of this, about ₹2.86 crore was released during 2024-25 and another ₹1.42 crore in 2025-26, taking the total central assistance released so far to ₹4.28 crore.
The modest funding assumes significance as Punjab is home to one of the country’s largest clusters of bicycle manufacturing, hand tools, machine tools, auto components, agricultural machinery and light engineering industries. The state’s manufacturing base, concentrated largely in Ludhiana, Jalandhar, Batala and Mandi Gobindgarh, has long sought greater Central support for technology upgradation, testing infrastructure and product certification to enhance export competitiveness.
The Scheme for Enhancement of Competitiveness in the Indian Capital Goods Sector – Phase II was launched with an outlay of ₹1,207 crore, including budgetary support of ₹975 crore, to promote advanced manufacturing through Centres of Excellence, Common Engineering Facility Centres, testing and certification infrastructure, technology development, industry accelerators and skill development initiatives. However, Punjab has so far secured only the IAHT testing facility project and has not been sanctioned any new Centre of Excellence, Common Engineering Facility Centre or Industry Accelerator under the scheme.
Replying to whether Punjab had received a proportionate share of central assistance compared with other states, the ministry said the scheme is implemented on a pan-India, demand-driven basis, with projects sanctioned on the merits of proposals received from eligible organisations. This means there are no state-wise quotas or earmarked allocations, and funding is determined by the number and quality of approved project proposals rather than geographical distribution.