The Indian Cabinet Likely to Approve ₹37,500 Crore Incentive Scheme for Coal Gasification Projects

The Indian government is expected to soon give its approval to a major incentive scheme worth ₹37,500 crore aimed at promoting coal gasification projects across the country. The proposal, prepared by the Ministry of Coal, is currently awaiting consideration by the Union Cabinet and is seen as a significant step toward expanding cleaner and more efficient use of domestic coal resources.

According to official sources, the scheme is designed to provide financial support and viability gap funding to companies investing in coal gasification technologies. The initiative aims to encourage both public and private sector participation in converting coal into synthetic gas (syngas), which can be further used to produce valuable downstream products such as methanol, ammonia, hydrogen, and other industrial chemicals.

Coal gasification is being promoted as a strategic alternative to conventional coal combustion, as it allows for better utilization of domestic coal reserves while reducing dependence on imported natural gas, crude oil, and fertilizers. The government believes this technology can play a crucial role in strengthening India’s energy security and supporting its industrial growth ambitions.

If approved, the scheme is expected to attract large-scale investments from major public sector undertakings and private companies in the energy and chemical sectors. Companies such as Coal India, NTPC, and GAIL are likely to be key participants in upcoming projects under this initiative.

However, industry experts also point out that coal gasification projects involve high capital costs and advanced technology requirements, which could pose implementation challenges. Environmental considerations and long project gestation periods may also need to be carefully managed.

Overall, the proposed ₹37,500 crore incentive scheme marks a strong policy push by the government to transition coal usage from traditional combustion to value-added industrial applications, aligning energy security goals with long-term economic development.