Government in New Delhi said it agreed to cover about 40 percent of the costs tied to a new natural gas pipeline project. Photo by Kodda/Shutterstock
NEW DELHI, Sept. 21 (UPI) -- The government in New Delhi said it was committed to covering about 40 percent of the capital investments needed to build natural gas links in the country.
An economic affairs committee in the Indian government, which was chaired by Prime Minister Nardendra Modi, said it will cover 40 percent of the $1.93 billion needed to build an intrastate natural gas pipeline project connecting the eastern part of the country to the national grid.
"This capital grant will encourage the supply of eco-friendly fuel at affordable tariffs to industries and will encourage industrial development in these states," the government said.
India's economy is expanding at a faster rate than its peers and demand for energy resources like coal, crude oil and natural gas are on the rise. According to research from Ernst & Young, natural gas in the country's energy mix has dropped below 10 percent because of the lack of domestic supplies. That compares with a global average mix for natural gas of around 25 percent.
The natural gas market, the report said, has been impacted heavily by a lack of distribution networks and low availability.
A recent profile from the International Monetary Fund, meanwhile, said deflation in India has been "dramatic," though its growth rate of 7.5 percent remains higher than that of even China's. Still, OPEC said in a recent report that investment in India has so far been disappointing and uncertainty about national economic policy "does not bode well for growth in the near term."
With the funding in place, the government said the pipeline could boost socioeconomic impact and provide indirect employment for about 21,000 people.