The India Industrial Land Bank records approximately 3 lakh acres of vacant developed industrial land across approximately 4,500 industrial parks. The Bharat Audyogik Vikas Yojana (BHAVYA) adds 33,600 acres across 100 new parks; ten percent of existing surplus. Within those parks, the anchor investor may take up to 25% of allotted land, with a 75% non-related allotment floor. The first set of numbers describes what the appraisal architecture measures; the second describes how it structures private participation. What does this dual architecture reveal about how India authors centrally-funded industrial parks?
Industrial scheme architecture in India operates on two parallel evaluative axes, and both express the same underlying institutional choice. The first axis is what the appraisal architecture measures at the moment of scheme approval. The second is what the scheme rules permit private participation to capture during implementation. The first answers why supply-side schemes pass appraisal in environments of documented existing surplus. The second answers how the state structures private benefit in centrally-subsidised infrastructure without allowing private capture. Both dimensions converge on a single architectural choice: the scheme is engineered for what the state can institutionally grasp at the decision stage, not for what unfolds after.
The BHAVYA EFC deliberations record both dimensions in institutional detail. The Department of Expenditure flagged that approximately 3 lakh acres across existing industrial parks remained vacant, against which BHAVYA proposed adding approximately 33,600 acres; ten percent of the existing surplus. The administrative department's response was structural rather than quantitative: vacant parks in legacy industrial areas were characterised by subpar internal infrastructure, location away from industrial corridors, and fragmented land ownership that placed them outside the reach of any single remedial scheme. The supply that exists on paper, the argument went, is not the supply that industry demands. The argument is institutionally difficult to falsify. Demand assessment in Indian scheme design relies on Detailed Project Reports submitted after scheme approval, and on Letters of Intent from potential investors that have no commercial enforceability and are routinely written to support state-level bids for central funding. The scheme approval body is asked to evaluate supply creation against a demand construct that will only be tested after the scheme has been approved.
The appraisal architecture for industrial schemes evaluates supply; it does not evaluate demand. Supply has engineering estimates and cost benchmarks the EFC can check against comparable schemes; demand has LoIs and projections it cannot. The committee's behaviour is determined by what it can evaluate, not by what should be evaluated. Industrial policy is authored as an instrument of manufacturing capacity creation, and capacity creation is read through the supply lens. Demand is treated as a downstream variable that will follow from supply; if the supply is of sufficient quality, the argument runs, the demand will emerge. This is a defensible policy position when pursued selectively. It becomes institutionally expensive when it is the default.
The Mega Food Parks scheme under the Ministry of Food Processing Industries was cited in the BHAVYA EFC deliberations: 41 projects approved, 9 operational after substantial investment. The Bulk Drugs Park scheme under the Department of Pharmaceuticals was cited: approved in 2021, none operational four years later. The Scheme for Integrated Textile Parks was cited for observations recorded by the Comptroller and Auditor General of India on implementation design. The Plot Size Rationalisation under the Agro Processing Cluster scheme was cited for progressive reduction in the minimum plot size from the original specification to ten acres, reflecting uptake difficulties. Each of these schemes had been approved through the same appraisal architecture, against the same supply-side logic, and was subsequently recorded as underperforming its demand assumptions. The institutional record of supply creation failing to attract demand is not small; it does not, however, function as a constraint on the approval of the next supply-side scheme.
The second axis sits inside the same scheme architecture: how private participation in the central subsidy is structured. The anchor investor is the recurring institutional figure in industrial scheme design. Its function is specific: it converts a public capital grant into commercial plausibility. An industrial park funded by the central exchequer needs a credible first occupant to signal viability; without one, the park risks being completed as infrastructure but left unoccupied as an industrial cluster. The anchor establishes the first commercial commitment and generates the co-location gravity that attracts ancillary industries.
The progression from the Electronic Manufacturing Clusters 2.0 (EMC 2.0) scheme to BHAVYA records how the institutional treatment of the anchor has evolved. EMC 2.0 required the anchor to take up at least 20% of the developed land and commit a minimum of ₹300 crore in industrial investment within the park. BHAVYA increases the permitted anchor allotment ceiling to 25% and does not specify a minimum investment quantum in the anchor's own unit; the anchor's commercial commitment is a structuring artefact (the equity contribution to the SPV, which is largely in the form of land) rather than a defined production investment. The scheme simultaneously imposes a 75% non-related third-party allotment floor that was not a feature of EMC 2.0 in the same form. Two institutional decisions are embedded in this shift. The first is a recalibration of what the anchor is being asked to underwrite: from manufacturing capacity to land-plus-SPV-equity participation. The second is the introduction of the 75% floor as a prophylactic against the risk that a scheme nominally funded as a public industrial park could effectively operate as a single-owner industrial estate on central grant. The Investment Division of the Department of Economic Affairs had explicitly cautioned in earlier observations that "single-owner industrial parks should not be undertaken." The 75% rule does not eliminate that risk; it caps it at 25%, which is the level at which the scheme has decided the anchor's embedded benefit is institutionally defensible.
The subsidy architecture extends the same logic to the question of who builds the park. Public capital flowing to a privately-structured JV is capped at ₹50 lakh per acre or 50% of trunk infrastructure cost, whichever is lower; half the rate applicable to state-led SPVs (₹1 crore per acre). The mandatory state government participation in private JVs, recorded in the EFC record as a specific safeguard "to prevent moral hazard and perverse incentive," follows the same logic. Each successive iteration of the anchor architecture across schemes has tightened these constraints; none has loosened them. The scheme is structured to welcome the anchor and to contain the anchor simultaneously. The commercial design that survives this architecture is one where the anchor's own industrial unit operates as the demand signal for the remaining 75%, where the SPV equity position is monetised through park development economics rather than through land appreciation on the anchor's own plot, and where the 50% central grant cap is treated as a ceiling the private participant plans around, not an entitlement it plans against.
What both dimensions have in common is what they evaluate and what they do not. The appraisal architecture evaluates supply because supply is measurable at decision stage; it does not evaluate demand because demand is not. The participation architecture caps anchor allotment at 25% and floors third-party allotment at 75% because these are enforceable at the moment of allotment; it does not evaluate whether the anchor's industrial unit will actually generate the demand gravity that justifies the architecture, because that emerges in execution. Scheme design in central sector industrial schemes is a containment exercise: containing measurable inputs at the appraisal stage, containing private capture at the participation stage; what unfolds after the scheme is approved sits outside the architecture's vocabulary.
This is the institutional reality a private participant enters when bidding for anchor status, when responding to a state-level park bid, or when planning industrial location in an environment where new central sector parks are being added. The scheme will be appraised on supply benchmarks; the participation will be governed by allotment caps and equity floors; the demand emergence and the operational outcome will be tested only after the scheme is built. The participant who reads the architecture as evaluating both stages will mis-calibrate the engagement. The participant who reads it as evaluating decision-stage inputs and leaving execution-stage outcomes to commercial reality has read it correctly.