Policy reform set to boost land utilisation, MSME entry, and industrial investments in Rajasthan

Rajasthan State Industrial Development and Investment Corporation has approved a key policy change allowing the subdivision of large industrial plots, aiming to accelerate industrial development and improve land utilisation across the state.

Long-Awaited Reform for Industrial Flexibility

The decision enables existing allottees to divide large industrial land parcels into smaller plots and sell them, addressing a long-standing demand from entrepreneurs. The move is expected to unlock idle or underutilised land, making it accessible to a wider pool of investors.

By enabling smaller plot sizes, RIICO is creating opportunities for new businesses—especially startups and MSMEs—to enter industrial zones with lower capital requirements.

Clear Eligibility Criteria to Prevent Misuse

The policy includes structured conditions to ensure genuine industrial use:

• Only plots of 20,000 sq. metres or more qualify for subdivision
• Each subdivided unit must be at least 500 sq. metres
• Subdivision allowed only after 7 years from original allotment
• The land must be free from disputes

These safeguards aim to balance flexibility with regulatory control and prevent speculative land trading.

Mandatory Approvals and Regulatory Oversight

Allottees must submit a proposed subdivision layout plan to RIICO for approval. The Land Plan Committee will evaluate the proposal to ensure compliance with planning norms.

If the land is mortgaged, a No Objection Certificate (NOC) from the lending institution is mandatory, ensuring financial transparency and legal clarity.

Infrastructure Responsibility on Plot Owners

A critical aspect of the policy is that the original allottee must develop internal infrastructure at their own cost. This includes:

• Roads and drainage systems
• Electricity and street lighting
• Water supply and rainwater harvesting

All infrastructure must be completed within three years, ensuring that subdivided plots are ready for immediate industrial use and do not become inactive assets.

Financial Terms and Usage Mandates

RIICO has set a subdivision charge of 2% of the prevailing land rate. Additionally:

• Lease tenure of subdivided plots will align with the remaining tenure of the original lease
• Buyers must commence operations within two years of purchase

These conditions are designed to ensure active utilisation and discourage land hoarding.

Major Boost for MSMEs and Employment

The reform is expected to significantly benefit MSMEs, which often face challenges in acquiring large industrial plots. By making smaller plots available, RIICO is lowering entry barriers and encouraging entrepreneurship.

This could lead to higher industrial density, increased production activity, and substantial job creation across Rajasthan’s industrial corridors.

Strategic Impact on Rajasthan’s Industrial Ecosystem

Rajasthan has been actively positioning itself as a manufacturing and investment hub. This policy aligns with broader efforts to attract domestic and global investors by improving ease of doing business and infrastructure readiness.

The move could also enhance the efficiency of industrial clusters by ensuring optimal land utilisation and faster project execution.

Outlook: Strong Catalyst for Industrial Expansion

The subdivision policy is expected to act as a catalyst for industrial growth by unlocking land supply, boosting investments, and supporting new business formation.

If implemented effectively, it could significantly enhance Rajasthan’s competitiveness in attracting manufacturing and industrial investments in the coming years.