Cabinet Approves ₹37,500 Crore Coal Gasification Scheme To Cut LNG, Urea Imports Amid PM Modi’s Fuel-Saving Drive

New Delhi: The Union Cabinet on Wednesday approved a Rs 37,500-crore scheme to promote surface coal and lignite gasification projects. The move comes amid Prime Minister Narendra Modi’s broader austerity and energy security push.

The initiative is aimed at reducing India’s dependence on imported LNG, urea, ammonia, and methanol.

“The Union Cabinet chaired by the Prime Minister Narendra Modi has approved a Scheme for Promotion of Surface Coal/Lignite Gasification Projects with a financial outlay of Rs 37,500 crore," according to an official statement.

The Union Cabinet on Wednesday approved a Rs 37,500-crore scheme to promote surface coal and lignite gasification projects. The move comes amid Prime Minister Narendra Modi’s broader austerity and energy security push.

The initiative is aimed at reducing India’s dependence on imported LNG, urea, ammonia, and methanol.

“The Union Cabinet chaired by Prime Minister Narendra Modi has approved a Scheme for Promotion of Surface Coal/Lignite Gasification Projects with a financial outlay of Rs 37,500 crore," according to an official statement.

Sharing the details, Union Information & Broadcasting Minister Ashwini Vaishnaw said that the country has 401 million tonnes of known coal reserves, which is enough for the next 200 years.

The latest scheme is part of the National Coal Gasification Mission launched in 2021 and follows the Rs 8,500 crore coal gasification scheme approved in January 2024, under which eight projects worth Rs 6,233 crore are currently under implementation.

What is coal gasification?

Coal gasification refers to the process of converting dry fuel into synthetic gas (syngas), which is used as an alternative fuel and helps reduce carbon emissions. This process supports production of methanol, fertilizers, hydrogen, and chemicals, cutting reliance on imported oil, methanol, and ammonia.

Besides, the Cabinet also approved Rs 2.6 lakh crore for kharif MSP operations for 2026-27 to support crop procurement and ensure price realisation for farmers.