Impact of Industrial Policy 2019 on Rural and Urban Industrialization of Maharashtra State

Maharashtra stands as one of India’s most industrially advanced and economically significant states, often regarded as the powerhouse of the country’s manufacturing and service sectors. With major metropolitan hubs like Mumbai, Pune, and Nagpur, the state has traditionally been a magnet for industrial investments, infrastructure development, and technological innovation. However, despite its prominence, Maharashtra faces persistent challenges related to regional disparities in industrial growth, environmental concerns, and the need for inclusive economic development that benefits both urban and rural populations. Recognizing these multifaceted challenges, the Government of Maharashtra introduced the Maharashtra Industrial Policy in 2019, a comprehensive framework designed to strengthen the state's industrial ecosystem by promoting competitiveness, sustainability, and equity across sectors and regions.

The Maharashtra Industrial Policy 2019 was formulated with clear and ambitious objectives aimed at revitalizing the manufacturing sector, attracting substantial domestic and foreign investments, and boosting the overall ease of doing business within the state. One of the key goals of the policy was to foster regionally balanced industrial growth to address the uneven distribution of industries, where urban centers such as Mumbai and Pune dominate the industrial landscape, often overshadowing rural and less-developed districts. To achieve this, the policy prioritized the development of industrial infrastructure in rural and backward areas, thereby promoting inclusive growth and reducing socio-economic inequalities. The policy also emphasized the role of Micro, Small, and Medium Enterprises (MSMEs), recognizing their critical contribution to employment generation, innovation, and regional economic vitality. By facilitating MSME growth through targeted incentives, skill development programs, and easier access to finance, the policy aimed to create a more resilient and diverse industrial base.

A cornerstone of the industrial infrastructure in Maharashtra is the Maharashtra Industrial Development Corporation (MIDC), established decades ago to develop industrial areas, provide essential infrastructure facilities such as roads, water supply, power, and land, and thereby attract and sustain industrial investments. MIDC’s network of industrial estates and special economic zones plays a pivotal role in operationalizing the state’s industrial policies, including the 2019 policy. By upgrading existing estates and developing new ones, especially in underdeveloped regions, MIDC supports the policy’s vision of regionally balanced industrialization and inclusive economic development. Furthermore, the policy’s alignment with initiatives likes the ‘Maitri’ program, which is focused on ease of doing business and investor facilitation, ensures that industrial growth is not only rapid but also sustainable and investor-friendly. ‘Maitri’ serves as a single-window platform for approvals, clearances, and grievance redressal, simplifying bureaucratic processes and thereby accelerating project implementation and reducing delays.

Another critical dimension of the Maharashtra Industrial Policy 2019 is its commitment to environmental sustainability. With growing awareness of the ecological impacts of industrial activities, the policy integrates green growth principles by encouraging industries to adopt cleaner technologies, enhance energy efficiency, and reduce emissions and waste generation. This approach aligns with global trends toward sustainable industrialization and supports Maharashtra’s obligations toward climate change mitigation and sustainable development goals.

This paper aims to systematically evaluate the impact of the Maharashtra Industrial Policy 2019 on industrialization trends across both rural and urban areas of the state. It analyzes how effectively the policy has addressed regional disparities, supported MSME growth, promoted environmental sustainability, and generated employment. By relying on secondary data such as government publications, economic surveys, industry reports, and scholarly assessments, the study provides a critical appraisal of the policy’s implementation, successes, and ongoing challenges. The findings are expected to offer valuable insights for policymakers, industry stakeholders, and researchers interested in understanding and enhancing industrial development in Maharashtra, ultimately contributing to the state’s socio-economic progress.

Abrol D. (2025) This article provides a critical review of the lived experience and concepts that have been generated for rural industrialization as a residual route in India. The purpose of this study is to draw lessons for people's democracies which are now in existence and their policies about rural industrialization. The liberation struggle in India was a significant factor in the beginning of people's conversations about rural industrialization. An agenda of emancipation was developed by the forces dedicated to national liberation in order to bring together working people from all throughout the country. There was a clear manifestation of the outcomes of the decolonization of knowledge production in the manner in which the forces of national liberation generated their own unique heuristics of industrial and technological upgrading. These heuristics had the potential to positively influence the trajectories of development of peasants, artisans, and rural laborers as a productive force.

Sharma et al. (2024) the purpose of this article is to investigate the contemporary industrial policies of India, which are designed to provide chances for the nation to become a leader in the global industrial sector. Methods: This paper is conducted by using traditional methods for penetrating deep into the market of India. These methods include conducting an analysis of industrial policies of India by undertaking relevant aspects, policies and schemes implemented or enforced by the government of India using induction and deduction methods, as well as conducting an analysis of research papers, official websites of reputable institutions, organizations, portals, and press releases of governmental departments, ministries, or state. Results: the article analyzes and draws conclusions about the impact of India's investment and industrial policies prior to and during the 1990s. It reveals the significant sector of the economy and defines the footprint of the inflow of foreign direct investment through the industrial policies implemented by the government of India, such as the "Make in India program." These policies have assisted India in becoming a global manufacturing hub by producing a workforce that is both skilled and highly skilled. Conclusions and relevance: this paper examines the potential of industrial policies of India that have been implemented by the government of India. It provides an outlook of industrial policies that were enforced before and after the 1990s. It also examines deeply modern industrial policies, their impact, and the opportunities that have been created to transform the nation into a global industrial hub in order to compete with China, which is a gigantic global manufacturer. This paper investigated and concluded the impact of foreign direct investment (FDI) and modern industrial policies on the manufacturing sector of the country. The paper explored the increase in exports and the decrease in imports of the country, which gives a clear idea of the importance of industrial policies of the economy. Additionally, the paper concluded the footprint of FDI on the nation. Both of these factors play a crucial role in the growth of any country's gross domestic product (GDP) and reserves. In order to accomplish its objectives, India needs a greater number of qualified and highly skilled workers.

Singh (2024) The purpose of this research is to analyze the dynamics of the labor market in the states of Uttar Pradesh and Maharashtra by analyzing employment trends, the challenges that are encountered, and the relevant policy consequences. This article provides an explanation of several development tactics, such as community progress, regional improvement, and job preparation, with the goal of increasing business possibilities while simultaneously decreasing inequality. It seeks to address problems such as labor force participation rates (LFPR), worker population ratios (WPR), and unemployment rates (UR) in order to achieve its goals of supporting sustainable economic development and decreasing inequality. The promotion of the digital economy has been recognized as a potential path for innovation that might attract investment. A comprehensive examination of secondary data obtained from the National Survey of Employment and Unemployment (NSSO) surveys that were carried out between 2017-2018 and 2021-22 is the study technique that has been chosen. The demographic profiles, economic outlooks, and labor force participation rates of Uttar Pradesh and Maharashtra are distinct and intricately different from one another by a significant margin. In contrast to Uttar Pradesh, which is mostly an agricultural economy and has a slower rate of modernization, Maharashtra has a more diverse economy and achieved better results in the labor market. Uttar Pradesh, on the other hand, is experiencing challenges. This study paper provides a number of policy proposals, some of which include outlining comprehensive approaches to deal with developments in the labor market, infrastructure development, migration, education, health, and sustainability development, amongst many other things. Furthermore, the establishment of a labor market that is inclusive, equal, and dynamic in both states requires the collaboration of the government, business, and civil society. This is a key component that may be achieved via the integration of digital literacy programs.

Karmakar et al. (2023) for a comprehensive knowledge of land development and spatial dynamics in any industrial zone, it is essential to do research on the interrelationships that exist between urban form and industrial growth. This research investigates the ways in which the growth of the ceramic industry has impacted the urban morphology of Morbi, which is located in Gujarat, India. Morbi serves as a case study for this investigation. A combination of qualitative and quantitative methods has been used for the purpose of this investigation. This has been followed by an evaluation of the current situation via a series of interviews with the various local stakeholders. Based on the data, it is clear that the urban form of Morbi town has been significantly influenced by the random and consistent growth of industrial units. The research has highlighted important urban concerns and offered viable solutions utilizing zoning and correct rules. These findings are based on population predictions and forecasts of land needs for the year 2031, which is the horizon year. In order to have a better understanding of the connections between the rise of metropolitan areas and the development of industries in India's smaller industrial towns, Morbi town acts as a case study. For the purpose of enhancing judgments about advocacy and spatial planning, the research will be of helpful assistance.

Singh et al. (2021) This research makes use of secondary data in order to evaluate the industrial performance of the states in India. The value of gross output, gross value added, invested capital, the number of factories, gross capital formation, total inputs, total personnel involved, and total emoluments of industries are all considerations in this analysis. Following that, it investigates the elements that influence the gross value added of sectors by using state by-state panel data for the years 2003-2018 respectively. It is possible to estimate the regression coefficients of total persons engaged, gross capital formation, total inputs, labor productivity, per person emoluments, capital intensity, and credit to industry by scheduled commercial banks, annual population growth, and literacy rate with the gross value added of industries by using linear, log-linear, and non-linear regression models. These models are considered when estimating the regression coefficients. Among the states that contribute the most significant contributions to the growth of the industrial sector in India, Gujarat, Maharashtra, Tamil Nadu, and Karnataka hold the top spots. The factors that have a favorable impact on gross value added include labor productivity, yearly population growth, literacy rate, total person engaged, credit to industries by scheduled commercial banks, per person emoluments, and gross capital creation combined. In terms of gross value added, a hill-shaped relationship can be seen between the literacy rate, per-person emoluments, capital intensity, and total inputs. Each of the following variables has a linear relationship with the gross value produced by industries in India: labor productivity, yearly population growth, credit to industries by scheduled commercial banks, total personnel involved, and gross capital creation.

This study adopts a descriptive research design aimed at understanding the impact of the Maharashtra Industrial Policy 2019 on industrial development in both rural and urban regions of the state. The analysis relies entirely on secondary data sourced from credible government agencies, including the Maharashtra Industrial Development Corporation (MIDC), Maharashtra Industry, Trade and Investment Facilitation (MAITRI) portal, and the Economic Survey of Maharashtra.

Selection of Study Regions

The study covers seven rural regions Vidarbha, Marathwada, North Maharashtra, Western Maharashtra, Konkan, Central Maharashtra, and Nashik rural and seven urban regions Mumbai, Pune, Nagpur, Nashik urban, Aurangabad, Thane, and Kolhapur Urban. These regions were selected to provide a broad and representative sample of Maharashtra’s diverse industrial landscape.

Rationale for Region Selection

• Rural regions were selected based on their relative industrial backwardness, potential for agro-based industries, and policy focus for regional balance.
• Urban regions were chosen for their status as established industrial hubs with advanced infrastructure, technology integration, and export potential.

Data Analysis Techniques

• Trend Analysis to observe investment, employment, output, and export changes from 2017 to 2024.
• Comparative Analysis between rural and urban industrial performance indicators.
• Geospatial Mapping to analyze the geographic distribution of MIDC industrial estates and projects.
• Qualitative Analysis of policy documents and industrial promotion schemes.

This approach offers an evidence-based evaluation of policy effectiveness in fostering balanced industrialization, MSME growth, and employment.

• Investment Promotion: The policy aims to attract industrial investments worth INR 10 lakh crore by the financial year 2023–24. This will be achieved by offering a conducive environment for industries, simplifying regulatory frameworks, and enhancing ease of doing business. The government seeks to position Maharashtra as a preferred investment destination both nationally and globally, by offering robust infrastructure, skilled manpower, and investor-friendly governance.
• Employment Generation: A key objective of the policy is to create employment opportunities for 40 lakh people by 2023–24. The policy encourages labour-intensive industries, skill development programs, and sector-specific industrial clusters to ensure the generation of both direct and indirect employment. Special attention is given to improving employability among the youth through collaboration with educational and vocational training institutions.
• Regional Balance: The policy promotes equitable industrial development across the state by encouraging investments in underdeveloped and backward regions, including Vidarbha, Marathwada, and parts of North Maharashtra. It provides special fiscal incentives, infrastructure support, and policy relaxations to industries setting up operations in these regions to address regional disparities and ensure balanced economic development.
• MSME Support: Recognizing the significant role of Micro, Small, and Medium Enterprises (MSMEs) in employment and economic growth, the policy aims to strengthen this sector through a comprehensive support mechanism. This includes capital subsidies, interest subvention schemes, infrastructure upgrades, easier access to credit, and the development of industrial parks and clusters exclusively for MSMEs. The objective is to make MSMEs more competitive, technologically upgraded, and globally marketable.
• Sustainable Growth: The policy places strong emphasis on environmentally sustainable industrial development. It promotes the adoption of green technologies, efficient resource utilization, and eco-friendly manufacturing practices. Incentives are offered to industries that adopt renewable energy, water conservation methods, and waste management systems. The objective is to align industrial growth with environmental conservation, ensuring long-term ecological balance and compliance with national and international sustainability standards.

• Industrial Promotion Subsidy (IPS): Reimbursement of State Goods and Services Tax (SGST) paid by new and expanding MSMEs as part of the state’s effort to encourage industrial growth and make operations financially viable.
• Interest Subsidy: A 5% subsidy on term loans availed for capital investment, aimed at reducing the financial burden on businesses and facilitating modernization and capacity expansion.
• Stamp Duty Exemption: Full exemption from stamp duty for new industrial units set up in underdeveloped or backward areas, to promote balanced regional development.
• Power Tariff Subsidy: Subsidy on electricity tariffs for MSMEs operating in designated priority or less-developed regions, helping reduce operational costs and encouraging energy-intensive units.
• Fiscal Incentives for Large-Scale Industries: Tailor-made incentive packages for mega and ultra-mega projects, including tax benefits and infrastructure support, to attract substantial inv  estments and high-employment generating industries.

The Maharashtra Industrial Policy 2019 has played a pivotal role in accelerating industrial growth across rural regions by introducing a well-rounded strategy focused on targeted incentives, infrastructure modernization, and skill enhancement initiatives. This comprehensive approach has helped bridge the developmental gap between urban and rural areas, fostering balanced regional growth.

• Increased Investments: The policy strategically prioritizes sectors such as agro based industries, textiles, food processing, renewable energy, and small-scale manufacturing units. These sectors are particularly suited to rural settings where raw materials and labor availability can be effectively leveraged. The focused emphasis has attracted both domestic and foreign investors, leading to a steady inflow of capital dedicated to setting up new enterprises and expanding existing ones in rural districts.
• Employment Generation: One of the key outcomes of this policy has been the generation of diverse employment opportunities tailored to rural populations. By creating jobs locally, the policy has successfully curtailed the longstanding trend of rural-to-urban migration, enabling people to earn livelihoods within their communities. This shift not only enhances rural incomes but also strengthens social stability and sustains rural economies.
• Infrastructure Development: Recognizing that robust infrastructure is essential for industrial growth, the policy has facilitated significant upgrades in transportation connectivity including road, rail, and logistics networks ensuring smoother movement of goods and raw materials. Alongside this, investments in reliable power supply systems have addressed a critical bottleneck, providing industries with the consistent energy needed for operations.
• Skill Development: To support these industrial advancements, the policy has prioritized the establishment of vocational training centers aimed at equipping the rural workforce with industry-relevant skills. These centers focus on imparting technical know-how and practical experience aligned with the evolving requirements of local industries, thereby enhancing employability and ensuring that industries have access to a skilled labor pool.

Collectively, these efforts under the Maharashtra Industrial Policy 2019 have created an enabling environment that not only promotes sustainable rural industrialization but also contributes to inclusive economic development across the state.

Table 1: Comparative Investment, Employment, Infrastructure Development, and Skill Development in Rural Regions of Maharashtra (2018 Pre-policy vs. 2019–24 Post-policy Projection)

Source: MIDC, MAITRI Portal, Economic Survey of Maharashtra (2018–2024)

Graph 1: Investment and Employment in Rural Regions (2019–2024)

Urban industrial centers in Maharashtra have experienced significant growth driven by focused improvements in infrastructure, rapid technological adoption, expansion of export capacities, and development of a skilled workforce. These advancements have collectively positioned the state’s urban industrial hubs as competitive and dynamic engines of economic growth.

• Enhanced Infrastructure: Urban areas have seen accelerated development of critical infrastructure, including the establishment of industrial corridors that facilitate seamless connectivity between manufacturing clusters and logistic hubs. Smart city initiatives have further modernized urban spaces by integrating sustainable urban planning, efficient utilities, and advanced communication networks. Additionally, major upgrades in transport infrastructure such as metro rail expansions, improved highways, and cargo handling facilities have streamlined the movement of goods and workforce, significantly boosting industrial productivity.
• Technological Advancements: A widespread adoption of Industry 4.0 technologies has transformed the manufacturing landscape in urban centers. Automation, the Internet of Things (IoT), advanced robotics, artificial intelligence, and data analytics are increasingly embedded into production processes. This technological leap has improved operational efficiency, enhanced product quality, reduced costs, and allowed manufacturers to respond swiftly to changing market demands.
• Increased Exports: The enhanced capabilities and infrastructure have translated into substantial growth in industrial exports. Urban industrial centers have expanded their global footprint by diversifying export products and tapping into new international markets. This export-led growth has not only increased foreign exchange earnings but also strengthened Maharashtra’s reputation as a global manufacturing and export hub.
• Skilled Workforce Growth: To sustain this momentum, there has been a strategic focus on developing a skilled workforce tailored to the needs of modern industries. Expansion of technical training institutes, collaboration with industries for curriculum design, and upskilling programs have created a talent pool equipped with the latest knowledge and practical skills. This ensures that industries have access to competent human resources capable of driving innovation and maintaining high productivity standards.

Together, these factors have helped Maharashtra’s urban industrial centers evolve into vibrant hubs of technological innovation, economic activity, and export excellence, significantly contributing to the state’s overall industrial growth and competitiveness.

Table 2: Comparative Industrial Output, Export Performance, Infrastructure Investment, and Industry 4.0 Technology Adoption in Urban Regions of Maharashtra (2018 Pre-policy vs. 2019–24 Post-policy Projection)

Source: Maharashtra Directorate of Industries, Export Promotion Council, MIDC Annual Reports (2018–2024)

Graph 2: Industrial Growth in Urban Regions (2019–2024)

Despite the ambitious vision and policy incentives laid out in the Maharashtra Industrial Policy 2019, several challenges and limitations hindered its full and effective implementation. These bottlenecks have had implications for both rural and urban industrial growth.

1. Implementation Delays

• One of the major challenges was the slow and inconsistent implementation of infrastructure-related projects, especially in underdeveloped regions such as Vidarbha and Marathwada.
• Delays in land acquisition, environmental clearances, and inter-departmental approvals often led to postponement of industrial park development, logistics hubs, and corridor connectivity.
• In several cases, investors faced prolonged waiting periods, which hampered investor confidence and discouraged fresh commitments.

2. Skill Mismatch

• A critical limitation was the gap between the skills available in the local workforce and the demands of modern industries, particularly in sectors like automotive, electronics, and renewable energy.
• While employment generation was a core objective, industries often struggled to find appropriately trained workers, especially in rural and semi-urban areas.
• The lack of integration between vocational education and industry needs, as well as inadequate training infrastructure, limited the ability to absorb local youth into high-skill jobs.
• Many industries resorted to importing skilled labor from other states or metro cities, which increased operational costs and undermined the local employment goals.

3. Environmental Concerns

• Rapid industrialization, especially in urban belts and expanding industrial clusters, raised serious environmental sustainability issues.
• Industrial units in some zones were found to be non-compliant with pollution control norms, particularly with regard to effluent discharge, air quality standards, and waste management.
• The enforcement of environmental regulations remained weak, due to capacity constraints in monitoring agencies and the lack of stringent punitive mechanisms.
• There is a growing need to integrate green technologies, promote sustainable industrial practices, and ensure Environmental Impact Assessments (EIAs) are more robust and enforced.

The Maharashtra Industrial Policy 2019 has established a solid platform for the expansion of the industrial sector in a manner that is balanced across both rural and urban areas. By focussing on impoverished regions and encouraging the growth of micro, small, and medium sized enterprises (MSME), it has produced a considerable amount of employment and helped minimise regional inequities. The adoption of new technologies and improvements to infrastructure has been beneficial to urban centres, which has resulted in an increase in Maharashtra's worldwide competitiveness. Nevertheless, difficulties associated with delays in infrastructure, mismatches in skill sets, and environmental compliance continue to be of crucial importance. In order to fully realise the potential of the policy, it will be necessary to address these difficulties via the implementation of continual policy refinement, enhanced governance, and involvement of stakeholders. The state of Maharashtra is in a strong position to create industrial development that is inclusive, sustainable, and resilient, which will promote both long-term economic growth and social equality if efforts are maintained.