Bihar: New Industries To Be Developed On Land From Closed Units

To promote industries in the state, the state government has introduced a new exit policy. Under this policy, entrepreneurs can return the land of closed industrial units to BIADA and reclaim their previously deposited lease amount.

The decision was taken during the 93rd meeting of the BIADA (Bihar Industrial Area Development Authority) Board of Directors held on 11 February, and approval was granted for the implementation of the Exit Policy 2025.

Photo Credit: PTI

Chief secretary said that this demand was raised in last UDHAMI panchayat.

This is likely to unlock significant industrial land for new industries, particularly for new MOU holders of bihar business connect.

Objective of the New Policy
The primary aim of this policy is to utilise land from closed industrial units in industrial areas. Entrepreneurs can return the land allocated by BIADA, which will then be reallocated for the establishment of new industrial units.

The last date for applications under this policy is 31 December 2025.

Eligible Units
- All units whose current allocation is valid.
- Units that have filed appeals against cancellation of allocation in the Appellate Authority, High Court, or Supreme Court. Such applicants must withdraw their litigation to avail the benefits of this policy.
- Units whose allocation has been cancelled but where BIADA has not yet taken possession.
- In all such cases, the allocation or lease period must be valid as of the application date.

Units Not Covered Under This Policy
- Those whose allocation or lease period has expired.
- If the land has already been reallocated to a third party.

Implementation of the Policy
Entrepreneurs returning the land will receive a refund after a proportional deduction based on the BIADA land rate at the time of application and the lease or allocation period used:
1. For non-operational industries up to 1-3 years, 10% of the amount will be refunded.
2. For non-operational industries between 3-5 years, 15% of the amount will be refunded.
3. For non-operational industries beyond 5 years, 20% of the amount will be refunded.

An 18% GST will be applicable on all refunds. Any outstanding dues to electricity boards, banks, financial institutions, government departments, or BIADA will be deducted before payment.

The date of inactivity will be determined based on inspection reports from the concerned Deputy General Manager, Regional Manager, or Assistant Regional Manager.

Required Documents for Units
- Original copies of the unit's registered lease deed and allocation letter.
- No-objection or clearance certificate from financial institutions or banks. If no loan was taken, an affidavit confirming the same.
- Clearance certificate from the electricity company or updated electricity bill.
- A declaration stating that no dues are pending towards any financial institution, bank, electricity company, or government department.

Three-Month Grace Period
After approval, the industrial unit will be given **three months** to remove its infrastructure or equipment. Thereafter, the land ownership will be transferred to BIADA. If the unit fails to remove its equipment within the stipulated time, the government will auction it, and the costs incurred will be deducted from the unit's refund amount.

Refund Process in Three Installments
Approved applicants will receive their refund in three installments:
1. 40% within four months of BIADA receiving the land.
2. 30% after four more months.
3. 30% after a total of eight months.

Policy for Newly Established Units
Newly established units operating under BIADA Land Allocation Policy 2002, which have been unable to set up industries within the stipulated timeframe or for other reasons, can also benefit from this policy. A proportional deduction will be made based on the lease or allocation period utilised. Additionally, 10% of the total land payment and applicable taxes will be deducted before issuing the refund. If any instalment is pending, an additional 2% penalty will be deducted from the outstanding amount.

Once the application is approved, the entrepreneur must remove all structures from the land within three months.

Application Submission
Applications can be submitted at the BIADA headquarters in the office of the Executive Director (North or South). All required documents must be attached with the application.

A committee headed by the Managing Director will review the applications, and its decision will be considered final and binding.