Start Biomass Briquettes & Pellets Unit in Rajasthan | Subsidy, Tax & Profit Guide

Start your Biomass Briquettes and Pellets Unit in Rajasthan and tap into one of India’s fastest-growing green energy sectors. Learn how to earn 100% tax-free profits under Section 80JJA and secure MNRE subsidies up to ₹2.10 crore along with RIPS-2019 state incentives. This guide covers everything — from government financial assistance and project eligibility to investment planning and profitability — making it the perfect roadmap for entrepreneurs, investors, and agro-based businesses aiming to turn waste into wealth.

Introduction: The Future of Green Energy in Rajasthan

The Biomass Subsidy Viability Report for Rajasthan provides a comprehensive overview of the financial, fiscal, and policy incentives available for setting up Biomass Briquettes and Pellets manufacturing units in the state. Recognized as a thrust sector under both central and state renewable energy programs, biomass energy projects play a crucial role in transforming agricultural residue into clean, eco-friendly fuel.

Rajasthan’s proactive policies — including MNRE Central Financial Assistance (CFA), Agri Infra Fund (AIF) benefits, and RIPS-2019 incentives — make it one of the most attractive destinations for green energy investments. This report helps entrepreneurs and investors assess project viability, understand eligibility criteria, and strategically plan their business to maximize subsidy benefits and long-term profitability.

Who Can Benefit?

The Subsidy Viability Report (SvR) by KIP highlights multiple investor categories that can benefit:

Agriculture Stakeholders: Large farmers managing crop residues profitably.
Industrial Users: Paper mills, textile plants, and food processors seeking cost-effective fuel alternatives.
Entrepreneurs & Startups: Individuals setting up new biomass manufacturing units.
NRIs & Investors: Those looking for high-subsidy, sustainable ventures.
CBG/CNG & Energy Companies: Businesses integrating backward or forward in the bioenergy value chain.
FPOs, SHGs & MSMEs: Local producer groups aiming for long-term green enterprise growth.

Key Financial Incentives for Biomass Projects in Rajasthan

100% Tax-Free Profit (Section 80JJA)

Businesses manufacturing briquettes or pellets from agricultural or biodegradable waste enjoy:

100% tax deduction on profits for five consecutive assessment years.
Applicable from the year the qualifying business activity commences.

MNRE – Central Financial Assistance (CFA)

The MNRE Waste-to-Energy Scheme offers substantial capital subsidies:

Project Type	CFA Rate (Per MTPH)	Max Subsidy	Criteria
Briquette Manufacturing	₹9.0 Lakhs	₹45.0 Lakhs (Max 5 TPH)	Based on capacity
Non-Torrefied Pellets	₹21.0 Lakhs	₹1.05 Crore (Max 5 TPH)	30% of Plant & Machinery Cost (lower value)
Torrefied Pellets	₹42.0 Lakhs	₹2.10 Crore (Max 5 TPH)	30% of Plant & Machinery Cost (lower value)

Agri Infrastructure Fund (AIF) Benefits

Interest Subvention: 3% per annum on bank term loans up to ₹2 Cr for 7 years (worth ₹30–35 lakh).
Credit Guarantee: 100% refund of CGTMSE cover fee for loans up to ₹2 Cr.

Rajasthan Investment Promotion Scheme (RIPS-2019) Incentives

Under the Rajasthan Biomass & Waste-to-Energy Policy, 2023, eligible biomass projects receive:

75% State GST Refund for 7 years.
Employment Generation Subsidy: 50% EPF & ESI reimbursement (75% for local hiring).
100% Exemption: Electricity Duty, Land Tax, and Conversion Charges for 7 years.
Stamp Duty Refund: Full exemption on land purchase/lease and construction-related stamp duty.

How KIP Can Help You

Subsidy Viability Report (SvR): Identifying all eligible subsidies customized for your project and location.
Detailed Project Report (DPR): Complete business modeling and financial planning aligned with bank and subsidy requirements.
Bank Financing Support: Assistance in preparing loan documentation and securing funding under credit-linked schemes.
Subsidy Application & Processing: Expert filing for MNRE, AIF, PMEGP, and state-level benefits.
Regulatory Compliance: Ensuring timely claim and continuation of subsidies like SGST refund, employment subsidy, and tax exemptions.
Tender Advisory: Updates and assistance with biomass-related tenders and documentation.

Frequently Asked Questions (FAQs)

Q1: What is the MNRE subsidy available for Biomass Briquette and Pellet projects?

You can get up to ₹2.10 crore under the MNRE Central Financial Assistance (CFA) scheme, depending on your plant capacity and technology type.

Q2: Who can apply for biomass project subsidies in Rajasthan?

Any individual, company, FPO, SHG, or partnership firm engaged in renewable or agri-waste-based businesses can apply.

Q3: What is the minimum project size eligible for MNRE subsidy?

Projects with a production capacity of 1 to 5 tons per hour (TPH) are typically eligible under the MNRE scheme.

Q4: Can I get both MNRE and RIPS-2019 benefits together?

Yes. You can combine central (MNRE) and state (RIPS-2019) incentives for maximum financial advantage.

Q5: Are bank loans required to claim subsidies?

Most subsidies are credit-linked, meaning a bank loan sanction is required before applying for financial assistance.

Q6: Is the Biomass Briquette & Pellet business tax-free?

Yes. Under Section 80JJA of the Income Tax Act, profits from biomass manufacturing are 100% tax-free for 5 years.

Start Biomass Briquettes & Pellets Unit in Rajasthan | Subsidy, Tax & Profit Guide