Punjab Newsline | Chandigarh

Punjab government has expanded its policy allowing industrial plots to be converted for a range of non-industrial uses, including commercial establishments, hotels, hospitals, banquet halls, housing, offices, institutes and petrol pumps.

The revised framework, linked to the policy issued on July 9, 2025, specifies separate eligibility conditions for each category, including minimum plot size, approach-road width and conversion charges based on the industrial reserve price. The move is aimed at giving greater flexibility to industrial plot owners while retaining planning, construction and environmental safeguards.

Commercial conversion carries highest charge

Commercial use will require a minimum plot size of 4,000 square yards and an approach road of at least 80 feet. The conversion charge has been fixed at 50% of the industrial reserve price, making it the most expensive category.

For hotels, the minimum plot size has been set at 2,500 square yards, with a 60-foot approach road and a conversion charge of 20%.

For hospitals, plots measuring 400 to 1,000 square yards will require a 45-foot approach road, while plots larger than 1,000 square yards will require a 60-foot road. The conversion charge for hospitals will also be 20%.

Housing gets lower conversion charge

Government has fixed a 10% conversion charge for EWS and industrial-worker housing as well as hotel/rental housing. For plots measuring between 2,500 square yards and one acre, road-width requirements will vary according to location. A 40-foot road will generally be required in Punjab, while SAS Nagar and New Chandigarh will require a 60-foot approach road. For plots larger than one acre, the required road width will be 60 feet.

Offices and institutes included

Industrial plots can also be converted for office and institutional purposes. Both categories require a minimum plot size of 1,000 square yards and a 60-foot approach road.

However, the conversion charges differ. Office use will attract a 20% charge, while institutes will be charged 10%.

For petrol pumps, the minimum plot requirement will be 1,000 square yards or the applicable MoRTH/IRC guideline size, whichever is higher. The approach road must be 80 feet in SAS Nagar and New Chandigarh and 60 feet elsewhere in Punjab. The conversion charge will be 20%.

Environmental safeguards remain mandatory

The policy places restrictions on certain conversions where environmentally sensitive industrial units are located nearby.

Hotels, hospitals, hotel/rental housing, institutes and EWS or industrial-worker housing will not be permitted on an industrial plot if an existing Red Category industry is located within 100 metres.

Where applicable, a Punjab Pollution Control Board (PPCB) NOC will also be mandatory. A 15-metre-wide green buffer with broad-leaved trees will have to be provided on the side facing the Red Category industry.

This means that simply paying the prescribed conversion charge will not guarantee approval for the proposed use.

Building regulations will continue to apply

The revised policy clarifies that conversion of an industrial plot to another use will not exempt the owner from existing building regulations.

After conversion, requirements relating to ground coverage, FAR, building height, parking and other building controls will continue to apply. Land-use conversion and construction permission will therefore remain separate regulatory requirements.

Petrol pump conversion fee will not be refunded

A specific provision has been included for petrol pumps. If an industrial plot is converted for petrol-pump use but the competent authority later refuses to grant the required petrol-pump licence, the conversion fee already deposited will not be refunded.

The conversion approval, therefore, cannot be treated as automatic permission to operate a petrol pump.

What the policy means for industrial plot owners

The expanded framework gives industrial plot owners more options to put their properties to alternative uses, particularly in areas where industrial activity may no longer be viable or suitable.

At the same time, the government has retained safeguards relating to road access, plot size, environmental clearances and building regulations. The revised provisions are expected to provide greater flexibility in land use while ensuring that conversions remain subject to Punjab's planning and environmental requirements.