UP Government Enhances Dairy Sector Subsidy to 35%, Unveils Incentives for Gram Panchayat Income Generation
In a major boost to the dairy industry, the Uttar Pradesh government has significantly revised its subsidy structure to encourage investment and modernization in the sector.
The state Cabinet, in a meeting held on Thursday, approved key amendments to the Uttar Pradesh Dairy Development and Milk Production Promotion Policy 2022, aligning it with more lucrative policies like the Food Processing Industry Policy 2023.
Subsidy Hike to Attract Private Investment
Animal Husbandry and Dairy Development Minister Dharampal Singh announced that under the revised policy, the subsidy for establishing new dairy units or upgrading existing ones has been increased from the previous 10% to 35%, with a cap of ₹5 crore.
The move is expected to make the sector more attractive for private players and drive rapid infrastructure development.
“Previously, our support under the dairy policy was limited to just 10%, which was significantly lower than what was offered under similar policies in other sectors,” said Singh.
“With this update, the dairy sector now stands to benefit equally — a much-needed reform to spur large-scale participation and innovation.”
Comprehensive Support for Infrastructure and Equipment
In addition to support for setting up new units, the policy now provides:
- 35% subsidy or up to ₹2.5 crore for the modernization of existing dairy plants.
- 35% or up to ₹1 crore for the purchase of modern dairy machinery and equipment.
- 35% or up to ₹1 crore for establishing cold chain systems to ensure freshness and shelf-life of dairy products during storage and transportation.
These subsidies are aimed at strengthening the entire dairy value chain — from production to processing and distribution — and enhancing the competitiveness of Uttar Pradesh’s dairy products in national and international markets.
Empowering Gram Panchayats through Income-Generating Activities
In another progressive move, the state Cabinet has approved a plan to financially empower Gram Sabhas and Gram Panchayats by encouraging them to generate income through local resource-based activities.
Under this initiative, any earnings made by rural bodies through ventures such as fish breeding in village ponds or running local marketplaces will be matched five times over by the state government as financial assistance.
Finance Minister Suresh Khanna elaborated on the scheme:
“If a Gram Panchayat generates ₹10,000 through its resources, the government will provide an additional ₹50,000 as support. This incentive can go up to a maximum of ₹5 lakh, based on a ₹1 lakh earning threshold by the panchayat.”
The scheme is designed to instill self-reliance and economic sustainability at the grassroots level by rewarding proactive efforts made by rural governing bodies to boost their local economy.
Driving Economic Growth from Farm to Village
Together, these Cabinet decisions reflect the Uttar Pradesh government’s intent to not only transform the state’s dairy industry into a high-efficiency sector but also to promote inclusive rural development.
By offering generous subsidies to entrepreneurs and simultaneously incentivizing grassroots-level economic activity, the government aims to generate employment, improve rural incomes, and strengthen agricultural infrastructure.
These policy changes are expected to attract fresh investments, stimulate rural entrepreneurship, and lay the groundwork for long-term growth in the state’s agrarian economy.
