Centre to partly fund gas pipeline project in east India to trigger growth

This is the first investment in pipeline infrastructure by the government and is hoped to facilitate economic development in the eastern region

Central government will partly fund a $2 billion gas pipeline project linking five eastern states to help trigger economic growth in a region that has trailed the rest of the country, the oil minister Dharmendra Pradhan said on Wednesday.
 

The 2,500-km pipeline, that is to be built by state-run GAIL (India) Ltd, will be the first time the government is offering budgetary support as part of Prime Minister Narendra Modi's plan for more balanced development.

Pradhan said the government will bear 40 percent of the project's cost that will have pipleines running through the states of Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha, which together account for nearly 40 percent of India's 1.3 billion population.

"This will be the first time that government spending will be made for pipeline infrastructure. This will help in achieving the prime minister's vision of the economic development of the eastern states," Pradhan told reporters after a cabinet meeting.

India's economic development has been concentrated in the western and southern states, where there is better infrastructure and more accessible energy supplies. These states get piped gas supplies for household and transportation.

Pradhan said the government was hoping the new pipeline would help attract investment in the agro processing industry in the eastern region. 

It will also help revive the three fertilizer plants, as promised by Modi during his 2014 election campiagn.

India's gas demand is expected to escalate by as much as 10 million cubic meters per day once the pipeline is completed in a little more than two years.

Natural gas accounts for around 6.5 percent of the country's overall energy needs, which is way below the global average. India plans to raise its share to 15 percent over the next three years.