Government Approves Rs 37,500 Crore Coal Gasification Project Amid Fuel-Saving Initiative

Government Approves Key Measures to Boost Energy Security and Agricultural Growth

The Indian Cabinet has approved a series of measures aimed at strengthening energy security, reducing import dependence, and promoting agricultural growth. Key among these measures is the approval of a Rs 37,500 crore coal gasification incentive scheme, designed to boost production of gas, urea, and chemicals from domestically produced coal.

The scheme, which has been cleared by the Cabinet, is aimed at promoting the value-added use of local coal resources and reducing reliance on imported fuels. Coal gasification refers to the process of converting coal into synthetic gas, or syngas, which can be used as an alternative fuel as well as a feedstock for chemicals and fertilisers. This process also helps reduce carbon emissions compared with conventional coal usage.

The development comes in the backdrop of the Centre's recent move to sharply raise import duties on gold, silver, and other precious metals. The Finance Ministry issued a late-night notification on Tuesday, imposing a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess (AIDC) on imports of gold and silver, taking the effective tax to 15% from 6%. This move is aimed at curbing overseas purchases and easing pressure on India's foreign exchange reserves during a period of global volatility.

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The Cabinet has also approved Rs 2.6 lakh crore for kharif MSP operations for 2026-27 to support crop procurement and ensure price realisation for farmers. Additionally, it sanctioned Rs 20,665 crore for the Sarkhej-Dholera semi-high-speed double-lane corridor to enhance connectivity and support industrial development.

These measures are part of a broader policy shift aligned with Prime Minister Narendra Modi's push for austerity and responsible consumption amid global economic uncertainty. The decisions are seen as a significant step towards strengthening energy security, promoting agricultural growth, and reducing import dependence.