Union Cabinet Approves Subsidy Continuation for PMUY, Rs 30,000 Crore Compensation to OMCs & Road Project in Tamil Nadu.
National
On 8 August 2025, the Union Cabinet chaired by Prime Minister Narendra Modi approved major proposals, including continuation of subsidies under the Pradhan Mantri Ujjwala Yojana (PMUY), compensation to Oil Marketing Companies (OMCs), and a road infrastructure project in Tamil Nadu.
- The Union Cabinet approved the continuation of targeted subsidies for PMUY beneficiaries during Financial Year 2025-26 (FY 2026) to ensure Liquefied Petroleum Gas (LPG) remains affordable for low-income households. This decision aims to maintain LPG adoption rates despite volatility in global energy prices.
- Under the approved scheme, each eligible household will receive a subsidy of Rs 300 per 14.2 kilogram (kg) LPG cylinder for up to nine refills annually. For smaller 5 kg LPG cylinders, the subsidy amount will be adjusted proportionately based on capacity. The scheme will involve a total expenditure of Rs 12,000 crore.
- The Union Cabinet also approved Rs 30,000 crore as compensation to three major public sector Oil Marketing Companies (OMCs) for their under-recoveries in supplying domestic LPG at regulated prices. The beneficiaries are Indian Oil Corporation Limited (IOCL) headquartered in New Delhi, Bharat Petroleum Corporation Limited (BPCL) in Mumbai, and Hindustan Petroleum Corporation Limited (HPCL), also based in Mumbai.
Main Point :- (i) This compensation package is designed to help OMCs cover financial losses incurred due to controlled LPG pricing and to support their operational sustainability. The funds will assist in meeting crucial expenses, ensuring uninterrupted LPG supply to domestic consumers across India.
(ii) Separately, the Cabinet Committee on Economic Affairs (CCEA) approved the construction of a 46-kilometre, four-lane stretch between Marakkanam and Puducherry in Tamil Nadu. This stretch is part of the strategic East Coast Road network, enhancing connectivity and regional trade potential.
(iii) The road project will be developed under the Hybrid Annuity Mode (HAM) with a total cost of Rs 2,157 crore, including Rs 1,118 crore allocated for construction and Rs 442 crore for land acquisition. The project aims to boost tourism, improve logistics, and strengthen infrastructure along Tamil Nadu’s coastal belt.
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