RIPS 2024 Incentives for Large Enterprises in Rajasthan – Eligibility, Subsidies and Application Guide

The Rajasthan Investment Promotion Scheme (RIPS) 2024 is the State Government’s principal investment incentive scheme for new investments and expansion projects in Rajasthan.

For large manufacturing and service projects, the Scheme can provide substantial financial benefits through Capital Subsidy, Turnover Linked Incentive (TLI), Investment Subsidy linked to State tax, Interest Subvention, Employment Booster, Thrust Booster and various statutory exemptions.

However, the amount of incentive depends on several factors, including:

• the amount of Eligible Fixed Capital Investment (EFCI);
• whether the project is classified as Large, Mega or Ultra Mega;
• the Area Category in which the project is located;
• whether the project falls within a notified Thrust Sector;
• employment generated by the project;
• whether the investment represents a new unit or expansion of an existing enterprise; and
• the Asset Creation Incentive selected by the enterprise.

The choice between the available incentives can materially affect the total benefit over the life of the project. Therefore, an enterprise should ideally evaluate the different alternatives before applying for the Entitlement Certificate.

This guide explains the principal RIPS 2024 incentives available to Large, Mega and Ultra Mega enterprises and the key issues businesses should consider before applying.

Who qualifies as a Large, Mega or Ultra Mega enterprise under RIPS 2024?

RIPS 2024 separately classifies manufacturing and service enterprises according to their EFCI or employment generation, subject to the prescribed minimum EFCI.

Manufacturing enterprises

An important exception applies to MSMEs registered with the Government of India. Such enterprises can avail incentives under the Manufacturing Standard Package with a minimum investment of ₹25 crore, and investments between ₹25 crore and ₹50 crore are treated under the Large Category for this purpose.

This can be particularly important for an existing Medium Enterprise undertaking a sizeable expansion because the benefits available under the Manufacturing Standard Package can be materially different from those available under the MSME Standard Package.

Service enterprises

For eligible Tourism enterprises, the threshold is relaxed further. Tourism projects with EFCI exceeding ₹10 crore but below ₹100 crore can receive Asset Creation Incentives applicable to the Large project category.

What is Eligible Fixed Capital Investment (EFCI) under RIPS 2024?

EFCI is one of the most important concepts under RIPS 2024 because project eligibility as well as several incentives are directly linked to the amount of eligible investment.

Broadly, EFCI includes investment made up to the date of commencement of commercial production in:

• land;
• new factory sheds and industrial buildings;
• new plant and machinery; and
• other new fixed assets essential for production and approved by the appropriate Sanctioning Committee.

For eligible service enterprises, specified assets such as servers, computers, IT infrastructure, air-conditioning systems, essential furniture and fixtures, equipment, office equipment and audio-visual equipment can also qualify.

However, certain investments are specifically excluded.

Important exclusions from EFCI

The following should generally not form part of eligible investment:

• land cost exceeding 30% of total EFCI;
• purchase of existing factory sheds or industrial buildings;
• old or second-hand plant and machinery; and
• plant and machinery transferred from another location by the enterprise.

There are separate provisions for eligible assets acquired through NCLT liquidation/resolution proceedings and certain acquisitions through RIICO, RFC, financial institutions or banks.

Practical point: EFCI should be computed carefully at the project-planning stage. An expenditure appearing as a fixed asset in the company’s books does not automatically mean that it will qualify as EFCI under RIPS 2024.

Manufacturing Standard Package under RIPS 2024

An eligible manufacturing enterprise can choose one of three Asset Creation Incentives (ACI):

1. Investment Subsidy;
2. Capital Subsidy; or
3. Turnover Linked Incentive.

These three options are mutually exclusive. The enterprise has to make a one-time and irreversible choice while applying for the Asset Creation Incentive.

This makes financial modelling before filing the application extremely important.

Option 1 – Investment Subsidy based on State tax

An eligible manufacturing enterprise can claim reimbursement of:

75% of the State tax due and deposited for 7 years.

For this purpose, State tax broadly refers to eligible SGST actually discharged through the electronic cash ledger after utilisation of available SGST and IGST input tax credit, subject to the conditions prescribed under the Scheme.

Annual ceiling

The Investment Subsidy can be attractive for businesses expected to generate substantial taxable intra-State supplies and consequently significant SGST cash payments.

The benefit should therefore be projected using the enterprise’s expected GST structure and actual State tax cash outflow, rather than simply applying 75% to projected turnover.

Option 2 – Capital Subsidy

Capital Subsidy is calculated as a percentage of EFCI.

For manufacturing enterprises, the applicable rate depends upon both the project category and the Area Category.

The subsidy is disbursed in annual instalments over 10 years.

Annual ceiling

Example

Suppose a Large manufacturing enterprise makes an EFCI of ₹100 crore in an Area Category 2 location.

The basic Capital Subsidy would be:

₹100 crore × 17% = ₹17 crore

This amount would ordinarily be distributed over the applicable 10-year period, subject to the Scheme conditions and applicable ceilings.

Capital Subsidy can therefore be particularly attractive where the project involves substantial eligible capital investment but its expected SGST cash payment or turnover does not justify selecting the other incentive alternatives.

Option 3 – Turnover Linked Incentive (TLI)

Instead of Capital Subsidy or Investment Subsidy, a manufacturing enterprise can choose a Turnover Linked Incentive calculated as a percentage of Net Sales Turnover.

Manufacturing TLI rates

The incentive is available annually for 10 years, subject to the applicable ceilings.

Annual ceiling

Importantly, Net Sales Turnover does not simply mean the turnover appearing in the financial statements. For RIPS purposes, it broadly covers eligible realisation from sale of manufactured goods and excludes non-operating income such as interest, grants/subsidies, trading activity and resale of goods.

For enterprises expecting high asset utilisation and strong turnover relative to the amount invested, TLI can produce a significantly higher benefit than Capital Subsidy.

Which is better: Capital Subsidy, TLI or Investment Subsidy in RIPS 2024?

There is no single incentive that is best for every enterprise.

A proper comparison should ideally project all three alternatives over the entire incentive period.

For example, two businesses investing ₹100 crore may receive materially different benefits if one expects annual turnover of ₹150 crore while the other expects turnover of ₹800 crore.

Similarly, a business may have high turnover but relatively low eligible SGST cash payment because of its input-tax-credit structure.

Therefore, the ACI decision should ideally be based on a 7–10 year financial model comparing the present value of each available incentive.

Employment Booster

Manufacturing enterprises creating employment above the prescribed minimum threshold can receive an additional Employment Booster over the selected Asset Creation Incentive.

For example, the minimum employment threshold for a Large manufacturing project is 100 employees.

Accordingly, the relevant employment levels are:

• 150 employees – 10% booster;
• 200 employees – 12.5% booster; and
• 250 employees or more – 15% booster.

The Employment Booster operates as a percentage enhancement of the ACI amount and remains subject to the applicable ceilings.

Thrust Booster

Manufacturing enterprises operating in notified Thrust Sectors are eligible for a:

10% Thrust Booster over the Asset Creation Incentive amount.

The list of Manufacturing Thrust Sectors is contained in the Scheme and should be checked against the precise manufacturing activity of the proposed project.

Classification is important. Merely being commercially associated with a priority industry does not necessarily mean that the manufacturing activity itself falls within the notified Thrust Sector.

Anchor Booster

Certain qualifying Mega and Ultra Mega projects can receive an Anchor Booster of 20% over the chosen ACI.

RIPS recognizes two broad types of anchors:

• Regional Anchors, linked to specified investments in qualifying Area Category 2 and 3 regions; and
• Sectoral Anchors, comprising the first qualifying Mega/Ultra Mega investments in specified sectors.

Specified Sectoral Anchor industries include areas such as automobiles and EVs, petrochemicals, chemicals, ESDM, aerospace, defence, construction equipment, pumped hydro storage manufacturing, electrolyzer manufacturing and semiconductors.

Qualifying Anchor enterprises may also receive specified benefits relating to banking, wheeling and transmission charges for captive power plants, subject to Scheme conditions.

This is different from describing the Anchor Booster itself as merely a waiver of banking or wheeling charges—the 20% ACI enhancement is the principal booster, while the power-related concessions are additional benefits.

Interest Subvention for manufacturing enterprises under RIPS 2024

Instead of the Thrust Booster or Anchor Booster, where applicable, eligible manufacturing enterprises may consider Interest Subvention.

The general benefit is:

5% Interest Subvention on eligible term loans for plant, machinery, equipment or plant-related apparatus for 5 years, subject generally to a maximum of 2.5% of EFCI distributed equally over five years.

Where a term loan also finances assets that do not qualify, the Interest Subvention is restricted proportionately to the eligible plant, machinery and equipment component.

Special provisions apply to the Textile, Garments and Apparel Sector.

Therefore, businesses using significant debt to finance plant and machinery should compare the Interest Subvention with the alternative booster available to them.

Services Standard Package in Rajasthan Investment Promotion Scheme 2024

RIPS 2024 provides a separate incentive structure for eligible service enterprises.

Eligible enterprises again choose between:

• Investment Subsidy;
• Capital Subsidy; or
• Turnover Linked Incentive.

Capital Subsidy for service enterprises

Turnover Linked Incentive for service enterprises

For services, eligible Net Sales Turnover essentially represents operating revenue generated from rendering services. Non-operating items such as dividend income, investment income, interest and specified foreign-exchange or asset write-down items are excluded.

Annual ceilings for service enterprises

Investment Subsidy is available for seven years, whereas Capital Subsidy and TLI ordinarily operate over ten years.

Special treatment for Tourism projects

Tourism receives a significantly lower entry threshold.

An eligible Tourism enterprise with EFCI exceeding ₹10 crore but below ₹100 crore can receive Asset Creation Incentives applicable to the Large project category under the Services Standard Package.

This makes RIPS 2024 relevant not only for very large hotels and tourism developments but also for mid-sized qualifying tourism investments.

Statutory exemptions under RIPS 2024

Apart from the principal Asset Creation Incentives, eligible enterprises can also receive various exemptions and reimbursements under the Scheme, subject to the conditions applicable to the particular project.

These can include relief relating to:

• Electricity Duty;
• Stamp Duty;
• Conversion Charges; and
• Mandi/Market Fees, where applicable.

These benefits should not be ignored while comparing projects because the value of statutory exemptions can be substantial, particularly for projects involving large land acquisition, electricity consumption or eligible agricultural inputs.

Expansion of an existing enterprise

RIPS 2024 also allows eligible existing enterprises to claim incentives for expansion.

Following the amendment dated 16 May 2025, expansion eligibility generally requires both a prescribed minimum expansion investment and satisfaction of the proportional investment/capacity conditions.

Minimum expansion investment

In addition, the expansion must generally involve:

• additional investment of at least 25% of the existing investment; and
• incremental capacity of at least 20%.

For MSMEs applying under the MSME Standard Package, the Scheme provides a different treatment: only the proportional investment/capacity condition applies.

This distinction is particularly important for Medium Enterprises considering whether to continue under the MSME Standard Package or apply for expansion benefits under the Manufacturing/Services Standard Package.

Phasing and telescoping

Large projects are often implemented over several years rather than through a single investment.

RIPS 2024 recognizes this through its phasing and telescoping provisions.

Generally, investments may be divided into a maximum of three phases, subject to the prescribed minimum investment for each phase.

The significant advantage of telescoping is that the incentive category can improve as cumulative investment increases.

Example

Suppose a manufacturing enterprise initially invests ₹200 crore in Area Category 1.

It falls in the Large Category and may therefore qualify for a Capital Subsidy rate of 13%.

It subsequently invests another ₹300 crore, taking cumulative EFCI to ₹500 crore.

The cumulative project now falls within the Mega Category.

The applicable Capital Subsidy rate consequently increases to 17%, and under the Scheme’s telescoping mechanism the higher rate can extend to the earlier investment as well, subject to the applicable provisions.

For projects expecting substantial investment over multiple stages, proper phasing at the application stage can therefore materially affect the ultimate incentive entitlement.

Customized packages for very large investments

RIPS 2024 provides additional flexibility for exceptionally large projects through Silver, Gold and Platinum customized packages.

Silver Package

Enterprises with EFCI above ₹500 crore, subject to the prescribed employment conditions, may be permitted to customize the mix of Asset Creation Incentives while maintaining the prescribed NPV framework.

Gold Package

Enterprises investing more than ₹1,000 crore and generating more than 800 jobs may be considered for an additional 20% booster on the chosen ACI on a case-by-case basis.

Platinum Package

For enterprises investing more than ₹3,000 crore and generating more than 1,500 jobs, the annual ACI ceiling can be linked to 2.5% of EFCI.

For certain investments exceeding ₹4,000 crore involving export orientation and green-economy considerations, the ceiling may be revised further in accordance with the Scheme.

These customized packages can materially change the economics of very large projects and therefore require separate evaluation.

How should a business evaluate RIPS 2024 before investing?

Before selecting an incentive package, a business should ideally prepare a RIPS incentive model covering at least:

1. proposed EFCI and eligible/non-eligible assets;
2. location and Area Category;
3. projected production capacity;
4. projected turnover for 10 years;
5. projected SGST output liability and cash payment;
6. employment generation;
7. term-loan funding for plant and machinery;
8. eligibility under a Thrust or Anchor sector;
9. proposed investment phases; and
10. statutory exemptions available to the project.

The projected benefit under Capital Subsidy, TLI and Investment Subsidy should then be compared over their respective benefit periods.

Looking only at the headline subsidy percentage can produce the wrong result.

How to apply for RIPS 2024 benefits

The central approval document under RIPS 2024 is the Entitlement Certificate (EC).

The application should correctly identify the project, proposed investment, eligible category, selected incentive and other benefits being claimed.

Because the selection of Asset Creation Incentive is irreversible, businesses should ideally complete their financial modelling before making the final ACI selection.

For large expansion projects, the treatment of the existing investment, incremental capacity, EFCI and proposed investment phases should also be examined before filing.

RIPS benefits can continue for up to 7–10 years, depending upon the incentive. Therefore, the work does not end with obtaining the Entitlement Certificate. The enterprise must also maintain the documentation and compliances required for periodic incentive claims throughout the entitlement period.

Frequently Asked Questions

What is RIPS 2024?

RIPS stands for Rajasthan Investment Promotion Scheme 2024. It provides investment incentives to eligible businesses establishing new units or undertaking qualifying expansion in Rajasthan.

What is the minimum investment for a Large manufacturing project?

Ordinarily, the Manufacturing Standard Package requires minimum EFCI of ₹50 crore. However, an MSME registered with the Government of India can access the Manufacturing Standard Package with investment of at least ₹25 crore, with investment between ₹25 crore and ₹50 crore treated under the Large Category.

What is the minimum investment for a Large service project?

The standard minimum EFCI is ₹25 crore. Eligible Tourism projects receive special treatment from an investment exceeding ₹10 crore.

What are the three main incentives available to a Large manufacturing enterprise?

An eligible manufacturing enterprise can make a one-time choice between:

• Investment Subsidy;
• Capital Subsidy; and
• Turnover Linked Incentive.

Can a business claim Capital Subsidy and TLI together?

Not under the Standard Package. The three Asset Creation Incentives are mutually exclusive, and the enterprise makes a one-time irreversible selection.

Very large eligible projects may separately examine the customized package provisions.

How much Capital Subsidy is available to a Large manufacturing enterprise?

Depending upon the Area Category, a Large manufacturing project can qualify for Capital Subsidy of 13%, 17% or 20% of EFCI, payable over the applicable incentive period and subject to Scheme conditions and ceilings.

What is the TLI rate for a Large manufacturing enterprise?

The basic rate is 1.20%, 1.40% or 1.65% of eligible Net Sales Turnover, depending upon the Area Category.

Can an existing business claim RIPS benefits for expansion?

Yes, subject to satisfying the applicable expansion conditions. For a manufacturing enterprise the general minimum expansion investment is ₹50 crore, while an MSME applying for expansion benefits under the Manufacturing/Services Standard Package has a ₹25 crore minimum. The prescribed proportional investment and incremental capacity requirements must also be satisfied.

Can an MSME apply under the Manufacturing Standard Package?

Yes. RIPS 2024 specifically allows a Government of India registered MSME to access the Manufacturing Standard Package with investment of at least ₹25 crore. Investment between ₹25 crore and ₹50 crore is treated under the Large Category.

Businesses should compare the MSME Standard Package and Manufacturing Standard Package before choosing the appropriate route because the incentive structure and long-term benefit can differ materially.

What is telescoping under RIPS 2024?

Telescoping allows an enterprise making phased investment to move into a higher project slab when its cumulative actual investment reaches the higher category threshold. The upgraded benefit can also apply to earlier eligible investment in accordance with the Scheme provisions.

Which RIPS incentive is best?

There is no universal answer.

Capital Subsidy is driven primarily by EFCI, TLI by eligible turnover and Investment Subsidy by eligible State tax actually due and deposited.

The correct choice therefore depends upon the project’s investment, turnover, GST profile, location, employment and financing structure.

For a sizeable project, all alternatives should ideally be modelled over the full incentive period before the enterprise makes its irreversible ACI selection.

RIPS 2024 advisory and incentive modelling

For businesses planning a new manufacturing or service unit, or a major expansion in Rajasthan, the most important stage is often before the investment structure and incentive option are finalized.

At Karnani & Co., Chartered Accountants, Jaipur, we assist businesses with:

• RIPS 2024 eligibility analysis;
• EFCI computation;
• comparison of Capital Subsidy, TLI and Investment Subsidy;
• Large vs MSME incentive evaluation;
• expansion and phasing analysis;
• preparation and filing of applications for Entitlement Certificates; and
• periodic incentive claims and ongoing RIPS compliance.

For a large project, we recommend preparing a project-specific incentive calculation rather than selecting an incentive solely on the basis of the headline subsidy rate.

Official reference: Rajasthan Investment Promotion Scheme 2024, as amended from time to time, Finance Department, Government of Rajasthan.

Also Read

Benefits for MSME Enterprises under RIPS 2024

This article is intended for general information and should not be treated as a substitute for project-specific professional advice. Eligibility and incentive amounts depend upon the facts of the individual project and the Scheme, notifications, amendments and procedural guidelines applicable at the relevant time.