Jharkhand Industrial and Investment Promotion Policy (2021): Assessing the State’s Strategy for Industrial Growth

Policy Update

Arya Gupta

1.Background

Despite being endowed with about 40% of India’s mineral wealth, including large deposits of coal, iron ore, copper, bauxite and uranium, Jharkhand has failed to build a diversified manufacturing economy; this is partly because of the state’s past reliance on mineral extraction, combined with the lack of industrial infrastructure, qualified workforce, connectivity and investment in non-resource based industries. It continues to rely on mining and primary processing  since its creation in 2000. This was made worse by the COVID-19 pandemic; the construction, mining, tourism, automobile and light/heavy engineering sectors are among the state’s main sectors that were hit hard, as well as the disruption of supply chains and a decrease in exports. In this background, the Government of Jharkhand has notified the Jharkhand Industrial and Investment Promotion Policy (JIIPP) 2021 through Extraordinary Gazette on 13 July 2021 and Chief Minister Hemant Soren formally launched the same during an Investors’ Meet in New Delhi in August 2021.

The goals of JIIPP 2021 were to make Jharkhand the preferred investment destination, to boost manufacturing and services after the pandemic, create employment opportunities, and revitalize traditional rural industries like sericulture, handloom, khadi and handicrafts. The policy focused not only on diversifying the economy from the traditional mining and metals industry to other sectors such as electronics manufacturing, which would be supported by the Adityapur Electronic Manufacturing Cluster, pharmaceuticals, textiles and tourism, but also on the further promotion of large-scale investments in steel, cement and mineral-based industries, as well as the development of specialised medical infrastructure and solar energy. Several big investors indicated their interest in taking a stake in the company at the event of launching in New Delhi, including Tata Steel (₹3,000 crore in three years), SAIL (₹4,000 crore), Adhunik Power (₹1,900 crore) and Prem Rubber Works (₹50 crore), along with a Dalmia Group MoU for cement, solar and waste-management expansion.

2.Functioning

The Jharkhand Industrial Infrastructure Development Corporation (JIIDCO), the Jharkhand Industrial Area Development Authority (JIADA) and the Jharkhand Investment Promotion Board (JIPB) guide and direct industrial land and infrastructure while the Jharkhand Investment Promotion Board guides and facilitates investment. The clearance of projects till MSME scale is done through the ‘Single Window Clearances Committee’ headed by Principal Secretary (Industries) and clearance of fiscal incentives is done through the ‘High-Powered Committee’ headed by Chief Secretary.

The main incentive scheme is the Comprehensive Project Investment Subsidy (CPIS) which reduces the upfront cost of fixed-capital investment, with a maximum of 5 per cent interest subsidy over five years, 100 per cent reimbursement of stamp duty and registration fee on the first transaction of any plot and special packages for projects with investments of over ₹50 crore.

Sector-specific packages are intended to attract investment into priority sectors such as tourism, healthcare, solar power and manufacturing An amendment in December, 2023, made an additional CPIS benefit for 5% of SC/ST entrepreneurs, women and differently-abled entrepreneurs who are residing in Jharkhand and an additional capital subsidy for units commissioned within three years of notification of the policy, named ‘Early Bird Subsidy’ to address implementation delay. 

The fiscal implications of the incentive structure for the state include capital and interest subsidies, SGST reimbursement, and reimbursement of stamp duty and registration fees. As per the Jharkhand Economic Survey 2025–26, industrial-policy incentive disbursement rose by 17.5 per cent to ₹184.51 crore in 2024–25. However, the figure is not separately attributable to JIIPP 2021, making it difficult to determine the policy’s exact fiscal implications. 

3.Performance

The big dynamics of JIIPP 2021 are the gap between investment announced and investment formally realised. While the official Industrial Entrepreneur Memorandum (IEM) applications made at the launch in August 2021 have only been partially matched by the investment commitment of anchor investors, in terms of value, official filings with the Department for Promotion of Industry and Internal Trade reveal just three investments amounting to ₹424 crore as of March 2023, a stark example of the ‘MoU versus money’ gap that has been well-documented at Indian State Investment Summits.

Source: Compiled from Jharkhand State News (2021), IBEF Jharkhand Industry Presentation (2026, citing DPIIT), Tribune India (2026), and NextIAS (2022, citing DPIIT EODB rankings). See Selected References for full citations.

The more recent data indicates a resurgence in investor interest: cumulative FDI into Jharkhand rose to ₹19,468.10 crore from October 2019 to June 2025, whereas the EU visit by the Chief Minister and the Bengal Global Business Summit were responsible for most of the investment pledges in steel, power, copper and renewable energy in FY25, which totalled about ₹48,000 crore. Investment remains focused on the steel, coal fired power generation and mining sectors, which are also the state’s traditional industries, rather than the industries targeted by JIIPP 2021, namely electronics, pharmaceuticals and textiles.

The same measurement gap exists for employment outcomes. During JIIPP 2021, employment creation emerged as a key goal, and the policy and sectoral initiatives contain specific employment targets, including 75,000 jobs in tourism. The government also predicted that the investment pledges will bring about 20,000 direct and 1.5 lakh indirect jobs in the month of August 2021 during the Investors’ Meet.

The figures do not however indicate actual employment as the result of projects being commissioned, but rather the employment that is announced or expected. No  consolidated publicly available data set was found that reports actual employment created as a result of JIIPP 2021, either by sector or in total. Project level and sectoral figures are available but are not consistent and tend to be based on potential employment, which makes it hard to determine whether the policy has been effective in generating real jobs.

4.Impact

Looking back at JIIPP 2021 in comparison to its goals, the result is a mixed bag, and no publicly available government evaluation of the policy was identified. It has certainly garnered the interest from investors and has been effective in bringing in a number of MoUs and proposals and the cumulative FDI worth of nearly ₹19,500 crore over the course of about six years is a genuine, albeit limited, achievement for a state that had a comparatively weak manufacturing base when the policy was formulated. However, the significant difference between the announced MoUs and the actual amount of investments formally filed (₹8,950 crore at the time of announcement and ₹424 crore by March 2023) creates real uncertainty as to what percentage of the announced pipeline led to commissioned and employment-creating investment during the period of the policy.

On diversification, which in some ways was the most unique goal of JIIPP 2021, there’s not a lot of evidence from Jharkhand’s past, a resource-extraction economy. The most recent investment plans, including the CIL-DVC power plant, the JSW copper mining and concentrator project, and one half of the Bengal Global Business Summit pipeline in steel, confirm that investment continues to be concentrated in the state’s traditional mining and this pattern is consistent with the resource-curse literature, which highlights how dependence on natural resources can weaken incentives for diversification and constrain the development of higher-value manufacturing (Auty, 1993; Sachs & Warner, 1995). In Jharkhand’s case, the continued concentration of investment in mineral-based industries, despite the diversification objectives of JIIPP 2021, suggests that the state may face some of the challenges associated with resource-dependent economies. The drop in the Ease of Doing Business ranking from the top 5 to the ‘Emerging Business Ecosystems’ category, which includes Jharkhand, Chhattisgarh, Kerala, Rajasthan and West Bengal, and being below the Achiever and Top Achiever categories under the 2022 methodology, points to regulatory and implementation issues that have limited the ability of the policy to achieve its diversification objectives.

5.Emerging Issues

There is a large gap between investment announcements at the MoU stage and investment in the form of IEMs, with no public database available to monitor the commissioning of investment of the 2021 pipeline of investment at the launch event.

The incentive basis, and hence underlying investment mix, has not been sufficient to change investment direction away from steel, coal-based power and mining industries and toward electronics, pharmaceuticals and textile industries as identified by JIIPP 2021.

Despite all the efforts to invest in a single window infrastructure, the ‘Ease of Doing Business’ classification of Jharkhand has deteriorated over time, indicating failure in its implementation and coordination rather than in the system itself.

There is no ex-post comprehensive evaluation of the success of JIIPP 2021 that is publicly available, even though a draft successor policy (JIIPP 2026) was published for consultation, which is being done without a clear account of what has worked and what has not in the previous policy.

The policy’s stated employment generation objective is not tracked separately by the sector-specific targets (e.g. tourism’s 75 000 jobs target) so it is hard to evaluate and monitor that objective on top of the overall investment amount. There is no accessible, aggregated database of outcomes to support the employment generation goal of the policy.

6.Way Forward

With the draft JIIPP 2026 open for consultation ahead of the National Stakeholder Consultation Meet in New Delhi (8-9 July 2026), the government has a near-term opportunity to publish a formal, unit-wise reconciliation of JIIPP 2021’s investment pipeline MoUs signed, IEMs filed, subsidies disbursed, and units actually commissioned so the successor policy can be calibrated on evidence of what converted into real capacity rather than repeated summit-driven announcements.This can be done by having an investment-tracking dashboard opened to the public and showing the MoU value, the status of the IEM, land Allotment, approval status, disbursement of subsidy, status of commissioning and employment created by each project, and periodic updates from relevant departments. The ongoing focus on the resource sectors suggests that the state would need to carefully balance the incentives in JIIPP 2026 to include a larger share of electronics, pharmaceuticals and textiles and that it could look to other resource-rich states that have undertaken a similar minerals-to-manufacturing shift, like Odisha, for inspiration on the diversification design. Sector-specific packages could be given, and the benefits could be increased or linked to performance, and disbursements could be linked to milestones like fixed capital investment, production start-up and verified employment created, etc.

The lack of clarity on single-window clearance timelines and subsidy disbursement at the timing of MoUs is implicit in the Ease of Doing Business (EODB) framework, and better transparency on both of these areas would help bridge the gap in transparency, allowing researchers and investors to differentiate between genuine progress and momentum building. The state can set a time limit for single window clearance based on departmental requirements and set up a status tracking system online with an escalation procedure for applications that are past the prescribed time limit. Last but not least, the inclusion of specific and measurable employment goals in the sector-specific chapters of JIIPP 2026, as has been done for the tourism sector with a target of 75,000 jobs, would enable the state’s next five-year policy cycle to be measured by results, and not just by investment goals alone.

7.References 

Auty, R. M. (1993). Sustaining development in mineral economies: The resource curse thesis. Routledge. https://doi.org/10.4324/9780203422595

Government of Jharkhand. (2021, July 13). Jharkhand Industrial and Investment Promotion Policy 2021 [Gazette notification]. https://jharkhandindustry.gov.in/sites/default/files/JIIPP2021.pdf

India Brand Equity Foundation. (2026). Industrial development & economic growth in Jharkhand [State presentation report]. https://www.ibef.org/industry/jharkhand-presentation

Jharkhand Industrial Infrastructure Development Corporation Ltd. (n.d.). Jharkhand Industrial & Investment Promotion Policy 2021. https://www.jiidco.co.in/jharkhand-industrial-policy-2021/

Jharkhand Industrial Infrastructure Development Corporation Ltd. (n.d.). Single window clearance system. https://www.jiidco.co.in/single-window/

Jharkhand State News. (2021, August). Jharkhand gets a new Industrial Policy 2021, hopes to attract mega investment. https://jharkhandstatenews.com/article/top-stories/4779/jharkhand-gets-a-new-industrial-policy-2021-hopes-to-attract-mega-investment

Sachs, J. D., & Warner, A. M. (1995). Natural resource abundance and economic growth (NBER Working Paper No. 5398). National Bureau of Economic Research. https://doi.org/10.3386/w5398

TeamLease RegTech. (2023, December 26). Govt. of Jharkhand issued a notification regarding the partial amendment to JIIPP-21. https://www.teamleaseregtech.com/updates/article/28688/govt-of-jharkhand-issued-a-notification-regarding-the-partial-amendmen/

The Tribune. (2026, July). Jharkhand unveils new Industrial and Textile policies to boost investment and jobs. https://www.tribuneindia.com/news/india/jharkhand-unveils-new-industrial-and-textile-policies-to-boost-investment-and-jobs

About the Contributor

Arya is a Research and Editorial Intern at IMPRI Impact and Policy Research Institute, New Delhi, and a Program Coordinator at Metvy. A fourth-year Economics graduate of Shri Ram College of Commerce (SRCC), University of Delhi, and originally from Jharkhand, Arya’s research interests include Indian political economy, labour markets and development policy.

Acknowledgements

The author thanks the IMPRI review team Ayan Bordoloi and Nayanshi Jain for their comments and guidance on this Policy Update. 

Disclaimer

All views expressed in the article belong solely to the author and not necessarily to the organisation.

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