Round 1 of Rs 37,500-Crore Coal Gasification Scheme Concludes

On 8 September 2026, the Ministry of Coal announced that Round 1 of the Rs 37,500-crore "Scheme for Promotion of Surface Coal/Lignite Gasification Projects" concluded with seven applications from major public and private companies, including Adani Enterprises and NTPC. The scheme, approved by the Union Cabinet in May 2026, aims to gasify around 75 million tonnes of coal and lignite, reduce India's import bill on gas-based products, and support cleaner use of coal. This is an important development for India's energy security and clean-coal transition, relevant for GS Paper 3.

What Happened

On 8 September 2026, the Ministry of Coal announced that Round 1 of the Scheme for Promotion of Surface Coal/Lignite Gasification Projects had concluded, receiving seven applications from major public and private sector companies. The scheme itself, carrying a financial outlay of Rs 37,500 crore, had been approved by the Union Cabinet on 13 May 2026. A senior Ministry official described the seven applications in the very first round as "a clear vote of confidence in the scheme."

When & Where

The Cabinet approval came on 13 May 2026, the request for proposals for Round 1 was issued on 7 July 2026, and the conclusion of Round 1 — along with the opening of Round 2 — was announced on 8 September 2026. The scheme applies nationally, covering coal and lignite gasification projects across India.

Who Is Involved

Ministry of Coal — nodal ministry administering the scheme.
Adani Enterprises Ltd — submitted three proposals, for urea production.
Gallantt Ispat Ltd — proposal for direct reduced iron (DRI) and syngas.
NTPC Ltd — proposal for synthetic natural gas (SNG).
Shyam Sel & Power Ltd — proposal for syngas.
Talcher Fertilisers Ltd — proposal for urea production.

How It Works

Companies submit gasification project proposals through a transparent and competitive bidding process.
Selected projects receive a financial incentive of up to 20% of their Plant and Machinery cost.
This incentive is disbursed in four equal instalments, each tied to the achievement of specific project milestones, ensuring funds flow only as projects progress.
Support is capped to spread benefits widely — Rs 5,000 crore per project, Rs 9,000 crore per product category, and Rs 12,000 crore per entity group.
Selected projects also get an extended coal-linkage tenure of 30 years under the Non-Regulated Sector framework, giving them long-term feedstock certainty.

Why It Matters

Economic: The scheme is expected to mobilise Rs 2.5-3 lakh crore in investment and create around 50,000 direct and indirect jobs, while eventually adding about Rs 6,300 crore a year to government revenue.
Energy Security: Coal gasification lets India convert domestic coal into substitutes for imported gas-based products such as urea, ammonia, methanol and synthetic natural gas, reducing import dependence — directly relevant to GS Paper 3 (Economy and Energy Security).
Environmental/Technological: Gasification is viewed as a cleaner way to use coal than direct combustion, linking this scheme to India's broader clean-coal and energy-transition goals.

Historical Background

An earlier coal gasification support scheme with an outlay of Rs 8,500 crore was approved before this one, and projects under that scheme are already under implementation.
The Union Cabinet approved the current, larger Rs 37,500-crore scheme on 13 May 2026.
The Ministry of Coal issued the Round 1 request for proposals on 7 July 2026, roughly two months after Cabinet approval.

Previous Related Events

The Rs 8,500-crore coal gasification scheme approved earlier already has projects under implementation, providing a track record ahead of this larger scheme.
The Ministry of Coal has previously held roadshows on the Scheme for Promotion of Surface Coal/Lignite Gasification Projects in cities such as New Delhi and Hyderabad to generate industry interest ahead of the Round 1 deadline.
(A third specific, dated prior milestone beyond these two could not be independently confirmed this run and has been left out — see Editor Notes.)

Static GK Connection

Coal Gasification: A chemical process that converts coal into synthesis gas (syngas) — a mixture mainly of carbon monoxide and hydrogen — which can then be used to make urea, ammonia, methanol, or synthetic natural gas.
Non-Regulated Sector (NRS) coal linkage: A framework under which industries other than the power sector (such as fertiliser, steel or cement) are allotted coal supply linkages, distinct from the regulated linkages given to power generators.

India & World Comparison

India holds among the world's largest coal reserves but has historically imported large volumes of gas-based products such as urea, ammonia, methanol and natural gas to meet demand that domestic coal-based capacity could not satisfy. By promoting coal gasification, India is following a path some other coal-rich economies have explored to convert abundant domestic coal into substitute chemical feedstocks, reducing reliance on imported gas-based inputs while working toward a broader national target of scaling up coal gasification capacity.

Future Impact

Round 2 of the scheme opened on 8 September 2026, with the Ministry of Coal planning further application windows at two-month intervals.
If successful, the scheme's projects are expected to reduce India's import bill on gas-based products such as urea, ammonia, methanol and synthetic natural gas.
The scheme is expected to be reviewed periodically as projects progress through the milestone-linked disbursement structure over the coming years.

🔑 Key Points for Revision

Cabinet approved the Scheme for Promotion of Surface Coal/Lignite Gasification Projects on 13 May 2026.
Total financial outlay: Rs 37,500 crore.
Round 1 concluded on 8 September 2026 with seven applications.
Applicants: Adani Enterprises (3 proposals), Gallantt Ispat, NTPC, Shyam Sel & Power, Talcher Fertilisers.
Scheme targets gasification of about 75 million tonnes of coal/lignite.
Incentive: up to 20% of Plant and Machinery cost, in four instalments tied to milestones.
Caps: Rs 5,000 crore/project; Rs 9,000 crore/product category; Rs 12,000 crore/entity group.
Scheme is technology-agnostic, favours indigenous technology.
Coal-linkage tenure extended to 30 years under Non-Regulated Sector framework.
Expected investment: Rs 2.5-3 lakh crore; expected jobs: about 50,000.
Expected annual government revenue: about Rs 6,300 crore.
Follows an earlier Rs 8,500-crore coal gasification scheme already under implementation.
Round 1 RFP issued 7 July 2026; Round 2 opened 8 September 2026.
Nodal Ministry: Ministry of Coal.
Ministry of Coal, Government of India, administers coal-linkage allocation under this scheme.

🧠 Concept Link (Static GK Deep Dive)

Core Concept: Coal Gasification and India's Clean-Coal Strategy

Definition: Coal gasification is the conversion of coal into synthesis gas (syngas), a mixture of mainly carbon monoxide and hydrogen, through a controlled chemical reaction rather than combustion.
Constitutional / Legal Basis: Not applicable; this is an executive scheme approved by the Union Cabinet and administered by the Ministry of Coal.
Scientific / Economic Principle: Gasification allows coal-derived syngas to substitute for imported natural gas as feedstock for urea, ammonia, methanol and synthetic natural gas production, reducing energy import dependence.
Link to this event: The Rs 37,500-crore scheme financially incentivises companies to set up such gasification capacity, and Round 1's seven applications are the first concrete industry response.
Origin & History: India has previously supported coal gasification through a smaller, earlier scheme with an outlay of Rs 8,500 crore, under which projects are already under implementation.
Key milestone 1: Union Cabinet approval of the Rs 37,500-crore scheme on 13 May 2026.
Key milestone 2: Conclusion of Round 1 with seven applications, announced on 8 September 2026.
Related Acts / Schemes: Scheme for Promotion of Surface Coal/Lignite Gasification Projects (current); the earlier Rs 8,500-crore coal gasification scheme.
Nodal Ministry / Body: Ministry of Coal, Government of India.
India-specific relevance: India relies on imports for a large share of its urea, ammonia, methanol and natural gas needs; domestic coal gasification can substitute for some of these imports using India's large coal reserves.
Global comparison: Other coal-rich economies have similarly explored gasification as a way to convert domestic coal into higher-value chemical products rather than relying solely on combustion for power.
Common exam angle: Distinguishing coal gasification (a chemical conversion process producing syngas) from coal liquefaction (converting coal into liquid fuels) is a frequently tested distinction.
Easy memory hook: "Gasify, don't just burn — syngas from coal can become urea, ammonia, methanol or gas itself."

❓ Practice MCQs

Q1. What is the total financial outlay of the Scheme for Promotion of Surface Coal/Lignite Gasification Projects? [Easy]

A) Rs 8,500 crore

B) Rs 23,731 crore

C) Rs 37,500 crore

D) Rs 100 crore

Answer: C

Explanation: The Union Cabinet approved this scheme with a total financial outlay of Rs 37,500 crore.

Q2. Which ministry administers the Scheme for Promotion of Surface Coal/Lignite Gasification Projects? [Easy]

A) Ministry of Power

B) Ministry of Coal

C) Ministry of Petroleum and Natural Gas

D) Ministry of Steel

Answer: B

Explanation: The scheme is administered by the Ministry of Coal, which announced the conclusion of Round 1 on 8 September 2026.

Q3. Approximately how much coal/lignite gasification capacity does this scheme target? [Moderate]

A) 25 million tonnes

B) 75 million tonnes

C) 150 million tonnes

D) 500 million tonnes

Answer: B

Explanation: The scheme targets gasification of approximately 75 million tonnes of coal and lignite.

Q4. Under the scheme, the financial incentive to selected projects is disbursed: [Moderate]

A) As a single lump sum on approval

B) In four equal instalments linked to project milestones

C) As a one-time tax exemption only

D) Only after project completion

Answer: B

Explanation: The incentive, up to 20% of Plant and Machinery cost, is disbursed in four equal instalments tied to the achievement of project milestones.

Q5. Which of the following companies submitted three proposals in Round 1 of the scheme, all for urea production? [Moderate]

A) NTPC Ltd

B) Talcher Fertilisers Ltd

C) Adani Enterprises Ltd

D) Shyam Sel & Power Ltd

Answer: C

Explanation: Adani Enterprises Ltd submitted three separate proposals under the scheme, all for urea production.

Q6. What is the per-project support cap under this scheme? [Tricky]

A) Rs 5,000 crore

B) Rs 9,000 crore

C) Rs 12,000 crore

D) Rs 37,500 crore

Answer: A

Explanation: Support is capped at Rs 5,000 crore per individual project, Rs 9,000 crore per product category, and Rs 12,000 crore per entity group — students often confuse these three distinct caps.

Q7. The extended coal-linkage tenure of 30 years offered to selected projects falls under which framework? [Tricky]

A) Regulated Sector framework

B) Non-Regulated Sector framework

C) Captive Mining framework

D) Commercial Mining Auction framework

Answer: B

Explanation: Selected projects get an extended 30-year coal-linkage tenure specifically under the Non-Regulated Sector (NRS) framework, which covers industries other than power generation.

Q8. Why is coal gasification considered strategically important for India's energy security? [Tricky]

A) It eliminates the need for any coal mining in India

B) It allows domestic coal to substitute for imported gas-based products like urea and ammonia

C) It converts coal directly into electricity more efficiently than combustion

D) It is required under India's WTO trade commitments

Answer: B

Explanation: Coal gasification converts coal into syngas, which can substitute for imported natural gas as feedstock for urea, ammonia, methanol and synthetic natural gas, reducing import dependence.

📜 Previous Year Question Style (PYQ)

PYQ 1:

The Scheme for Promotion of Surface Coal/Lignite Gasification Projects, approved by the Union Cabinet in 2026, is administered by which of the following?

A) NITI Aayog

B) Ministry of Coal

C) Ministry of Environment, Forest and Climate Change

D) Coal India Limited independently

Answer: B

Explanation: The scheme is administered by the Ministry of Coal, which announced the conclusion of Round 1 and the opening of Round 2 on 8 September 2026.

PYQ 2:

Consider the following statements regarding the Scheme for Promotion of Surface Coal/Lignite Gasification Projects:

It has a total financial outlay of Rs 37,500 crore.
It offers a financial incentive of up to 20% of Plant and Machinery cost.
Selected projects receive the entire incentive as a single upfront payment.

Which of the above statements is/are correct?

A) 1 only

B) 1 and 2 only

C) 2 and 3 only

D) All of the above

Answer: B

Explanation: Statements 1 and 2 are correct. Statement 3 is incorrect — the incentive is disbursed in four equal instalments linked to project milestones, not as a single upfront payment.

PYQ 3:

Assertion (A): Round 1 of the coal gasification scheme is described by the Ministry of Coal as receiving an "overwhelming response."

Reason (R): Seven applications were received in Round 1 from major public and private sector companies, including Adani Enterprises and NTPC.

A) Both A and R are true, and R is the correct explanation of A

B) Both A and R are true, but R is not the correct explanation of A

C) A is true, but R is false

D) A is false, but R is true

Answer: A

Explanation: The Ministry's characterisation of the response as strong (A) is directly explained by the fact that seven applications came in from major companies in the very first round (R).

✍️ Mains Answer Pointers

Question 1 (150 words): What is the significance of the Scheme for Promotion of Surface Coal/Lignite Gasification Projects for India's energy security?

The Rs 37,500-crore Scheme for Promotion of Surface Coal/Lignite Gasification Projects, administered by the Ministry of Coal, is significant for India's energy security because it enables the conversion of abundant domestic coal into synthesis gas (syngas), which can substitute for imported gas-based products such as urea, ammonia, methanol and synthetic natural gas. This reduces India's dependence on imports for these products. The scheme, targeting gasification of about 75 million tonnes of coal and lignite, offers incentives of up to 20% of Plant and Machinery cost, disbursed in instalments tied to milestones, and extends coal-linkage tenure to 30 years for selected projects. With Round 1 concluding on 8 September 2026 with seven applications from companies including Adani Enterprises and NTPC, the scheme is expected to mobilise Rs 2.5-3 lakh crore in investment and generate significant employment, while also supporting a cleaner pathway for coal use.

Question 2 (250 words): Discuss the economic and environmental rationale behind promoting coal gasification in India, with reference to the recent Round 1 outcomes of the Scheme for Promotion of Surface Coal/Lignite Gasification Projects.

Coal gasification converts coal into synthesis gas rather than burning it directly, allowing the resulting syngas to be used as feedstock for products such as urea, ammonia, methanol and synthetic natural gas — products India currently imports in significant volumes. The economic rationale for promoting this technology, embodied in the Rs 37,500-crore Scheme for Promotion of Surface Coal/Lignite Gasification Projects approved by the Union Cabinet on 13 May 2026, is to reduce this import dependence using India's large domestic coal reserves, while mobilising an estimated Rs 2.5-3 lakh crore in investment and creating around 50,000 direct and indirect jobs. The scheme's structure — incentives of up to 20% of Plant and Machinery cost paid in milestone-linked instalments, capped per project, product category and entity group, alongside an extended 30-year coal linkage under the Non-Regulated Sector framework — is designed to de-risk private investment in a technology that is capital-intensive and still maturing in India. The environmental rationale rests on gasification being viewed as a comparatively cleaner way to use coal than direct combustion for power. The conclusion of Round 1 on 8 September 2026, with seven applications from major companies including Adani Enterprises, Gallantt Ispat, NTPC, Shyam Sel & Power and Talcher Fertilisers, and the same-day opening of Round 2, suggests reasonable industry appetite, though the scheme's ultimate success will depend on whether these projects are actually commissioned and can compete on cost with imported alternatives over time.

⚠️ Examiner Trap

Trap 1: Students confuse coal gasification with coal liquefaction. The correct fact is that gasification converts coal into synthesis gas (syngas), while liquefaction converts coal into liquid fuels — this scheme is specifically about gasification.
Trap 2: A common wrong assumption is that the scheme's financial incentive is paid upfront in full. The reality is that it is disbursed in four equal instalments, each linked to achievement of project milestones.
Trap 3: Many students miss that this Rs 37,500-crore scheme is not India's first coal gasification support scheme. Always remember that an earlier, smaller Rs 8,500-crore scheme already has projects under implementation.

🧭 Exam Tip

Prelims examiners are likely to test the scheme's name, its financial outlay (Rs 37,500 crore), its target gasification capacity (about 75 million tonnes), and the nodal ministry (Ministry of Coal). Mains examiners will focus on the energy-security and clean-coal-transition angle, ideal for a GS Paper 3 answer on India's energy policy or on reducing import dependence. This topic has limited direct Interview-round relevance on its own, but could support a broader discussion on India's coal-sector reforms and energy diversification. Given that Round 2 opened the same day Round 1 concluded, expect further updates — such as project approvals or additional application rounds — in upcoming exam cycles.

Round 1 of Rs 37,500-Crore Coal Gasification Scheme Concludes

What Happened

When & Where

Who Is Involved

Ministry of Coal — nodal ministry administering the scheme.
Adani Enterprises Ltd — submitted three proposals, for urea production.
Gallantt Ispat Ltd — proposal for direct reduced iron (DRI) and syngas.
NTPC Ltd — proposal for synthetic natural gas (SNG).
Shyam Sel & Power Ltd — proposal for syngas.
Talcher Fertilisers Ltd — proposal for urea production.

How It Works

Companies submit gasification project proposals through a transparent and competitive bidding process.
Selected projects receive a financial incentive of up to 20% of their Plant and Machinery cost.
This incentive is disbursed in four equal instalments, each tied to the achievement of specific project milestones, ensuring funds flow only as projects progress.
Support is capped to spread benefits widely — Rs 5,000 crore per project, Rs 9,000 crore per product category, and Rs 12,000 crore per entity group.
Selected projects also get an extended coal-linkage tenure of 30 years under the Non-Regulated Sector framework, giving them long-term feedstock certainty.

Why It Matters

Economic: The scheme is expected to mobilise Rs 2.5-3 lakh crore in investment and create around 50,000 direct and indirect jobs, while eventually adding about Rs 6,300 crore a year to government revenue.
Energy Security: Coal gasification lets India convert domestic coal into substitutes for imported gas-based products such as urea, ammonia, methanol and synthetic natural gas, reducing import dependence — directly relevant to GS Paper 3 (Economy and Energy Security).
Environmental/Technological: Gasification is viewed as a cleaner way to use coal than direct combustion, linking this scheme to India's broader clean-coal and energy-transition goals.

Historical Background

An earlier coal gasification support scheme with an outlay of Rs 8,500 crore was approved before this one, and projects under that scheme are already under implementation.
The Union Cabinet approved the current, larger Rs 37,500-crore scheme on 13 May 2026.
The Ministry of Coal issued the Round 1 request for proposals on 7 July 2026, roughly two months after Cabinet approval.

Previous Related Events

The Rs 8,500-crore coal gasification scheme approved earlier already has projects under implementation, providing a track record ahead of this larger scheme.
The Ministry of Coal has previously held roadshows on the Scheme for Promotion of Surface Coal/Lignite Gasification Projects in cities such as New Delhi and Hyderabad to generate industry interest ahead of the Round 1 deadline.
(A third specific, dated prior milestone beyond these two could not be independently confirmed this run and has been left out — see Editor Notes.)

Static GK Connection

Coal Gasification: A chemical process that converts coal into synthesis gas (syngas) — a mixture mainly of carbon monoxide and hydrogen — which can then be used to make urea, ammonia, methanol, or synthetic natural gas.
Non-Regulated Sector (NRS) coal linkage: A framework under which industries other than the power sector (such as fertiliser, steel or cement) are allotted coal supply linkages, distinct from the regulated linkages given to power generators.

India & World Comparison

Future Impact

Round 2 of the scheme opened on 8 September 2026, with the Ministry of Coal planning further application windows at two-month intervals.
If successful, the scheme's projects are expected to reduce India's import bill on gas-based products such as urea, ammonia, methanol and synthetic natural gas.
The scheme is expected to be reviewed periodically as projects progress through the milestone-linked disbursement structure over the coming years.

🔑 Key Points for Revision

Cabinet approved the Scheme for Promotion of Surface Coal/Lignite Gasification Projects on 13 May 2026.
Total financial outlay: Rs 37,500 crore.
Round 1 concluded on 8 September 2026 with seven applications.
Applicants: Adani Enterprises (3 proposals), Gallantt Ispat, NTPC, Shyam Sel & Power, Talcher Fertilisers.
Scheme targets gasification of about 75 million tonnes of coal/lignite.
Incentive: up to 20% of Plant and Machinery cost, in four instalments tied to milestones.
Caps: Rs 5,000 crore/project; Rs 9,000 crore/product category; Rs 12,000 crore/entity group.
Scheme is technology-agnostic, favours indigenous technology.
Coal-linkage tenure extended to 30 years under Non-Regulated Sector framework.
Expected investment: Rs 2.5-3 lakh crore; expected jobs: about 50,000.
Expected annual government revenue: about Rs 6,300 crore.
Follows an earlier Rs 8,500-crore coal gasification scheme already under implementation.
Round 1 RFP issued 7 July 2026; Round 2 opened 8 September 2026.
Nodal Ministry: Ministry of Coal.
Ministry of Coal, Government of India, administers coal-linkage allocation under this scheme.

🧠 Concept Link (Static GK Deep Dive)

Core Concept: Coal Gasification and India's Clean-Coal Strategy

Definition: Coal gasification is the conversion of coal into synthesis gas (syngas), a mixture of mainly carbon monoxide and hydrogen, through a controlled chemical reaction rather than combustion.
Constitutional / Legal Basis: Not applicable; this is an executive scheme approved by the Union Cabinet and administered by the Ministry of Coal.
Scientific / Economic Principle: Gasification allows coal-derived syngas to substitute for imported natural gas as feedstock for urea, ammonia, methanol and synthetic natural gas production, reducing energy import dependence.
Link to this event: The Rs 37,500-crore scheme financially incentivises companies to set up such gasification capacity, and Round 1's seven applications are the first concrete industry response.
Origin & History: India has previously supported coal gasification through a smaller, earlier scheme with an outlay of Rs 8,500 crore, under which projects are already under implementation.
Key milestone 1: Union Cabinet approval of the Rs 37,500-crore scheme on 13 May 2026.
Key milestone 2: Conclusion of Round 1 with seven applications, announced on 8 September 2026.
Related Acts / Schemes: Scheme for Promotion of Surface Coal/Lignite Gasification Projects (current); the earlier Rs 8,500-crore coal gasification scheme.
Nodal Ministry / Body: Ministry of Coal, Government of India.
India-specific relevance: India relies on imports for a large share of its urea, ammonia, methanol and natural gas needs; domestic coal gasification can substitute for some of these imports using India's large coal reserves.
Global comparison: Other coal-rich economies have similarly explored gasification as a way to convert domestic coal into higher-value chemical products rather than relying solely on combustion for power.
Common exam angle: Distinguishing coal gasification (a chemical conversion process producing syngas) from coal liquefaction (converting coal into liquid fuels) is a frequently tested distinction.
Easy memory hook: "Gasify, don't just burn — syngas from coal can become urea, ammonia, methanol or gas itself."

❓ Practice MCQs

Q1. What is the total financial outlay of the Scheme for Promotion of Surface Coal/Lignite Gasification Projects? [Easy]

A) Rs 8,500 crore

B) Rs 23,731 crore

C) Rs 37,500 crore

D) Rs 100 crore

Answer: C

Explanation: The Union Cabinet approved this scheme with a total financial outlay of Rs 37,500 crore.

Q2. Which ministry administers the Scheme for Promotion of Surface Coal/Lignite Gasification Projects? [Easy]

A) Ministry of Power

B) Ministry of Coal

C) Ministry of Petroleum and Natural Gas

D) Ministry of Steel

Answer: B

Explanation: The scheme is administered by the Ministry of Coal, which announced the conclusion of Round 1 on 8 September 2026.

Q3. Approximately how much coal/lignite gasification capacity does this scheme target? [Moderate]

A) 25 million tonnes

B) 75 million tonnes

C) 150 million tonnes

D) 500 million tonnes

Answer: B

Explanation: The scheme targets gasification of approximately 75 million tonnes of coal and lignite.

Q4. Under the scheme, the financial incentive to selected projects is disbursed: [Moderate]

A) As a single lump sum on approval

B) In four equal instalments linked to project milestones

C) As a one-time tax exemption only

D) Only after project completion

Answer: B

Explanation: The incentive, up to 20% of Plant and Machinery cost, is disbursed in four equal instalments tied to the achievement of project milestones.

Q5. Which of the following companies submitted three proposals in Round 1 of the scheme, all for urea production? [Moderate]

A) NTPC Ltd

B) Talcher Fertilisers Ltd

C) Adani Enterprises Ltd

D) Shyam Sel & Power Ltd

Answer: C

Explanation: Adani Enterprises Ltd submitted three separate proposals under the scheme, all for urea production.

Q6. What is the per-project support cap under this scheme? [Tricky]

A) Rs 5,000 crore

B) Rs 9,000 crore

C) Rs 12,000 crore

D) Rs 37,500 crore

Answer: A

Q7. The extended coal-linkage tenure of 30 years offered to selected projects falls under which framework? [Tricky]

A) Regulated Sector framework

B) Non-Regulated Sector framework

C) Captive Mining framework

D) Commercial Mining Auction framework

Answer: B

Explanation: Selected projects get an extended 30-year coal-linkage tenure specifically under the Non-Regulated Sector (NRS) framework, which covers industries other than power generation.

Q8. Why is coal gasification considered strategically important for India's energy security? [Tricky]

A) It eliminates the need for any coal mining in India

B) It allows domestic coal to substitute for imported gas-based products like urea and ammonia

C) It converts coal directly into electricity more efficiently than combustion

D) It is required under India's WTO trade commitments

Answer: B

📜 Previous Year Question Style (PYQ)

PYQ 1:

The Scheme for Promotion of Surface Coal/Lignite Gasification Projects, approved by the Union Cabinet in 2026, is administered by which of the following?

A) NITI Aayog

B) Ministry of Coal

C) Ministry of Environment, Forest and Climate Change

D) Coal India Limited independently

Answer: B

Explanation: The scheme is administered by the Ministry of Coal, which announced the conclusion of Round 1 and the opening of Round 2 on 8 September 2026.

PYQ 2:

Consider the following statements regarding the Scheme for Promotion of Surface Coal/Lignite Gasification Projects:

It has a total financial outlay of Rs 37,500 crore.
It offers a financial incentive of up to 20% of Plant and Machinery cost.
Selected projects receive the entire incentive as a single upfront payment.

Which of the above statements is/are correct?

A) 1 only

B) 1 and 2 only

C) 2 and 3 only

D) All of the above

Answer: B

Explanation: Statements 1 and 2 are correct. Statement 3 is incorrect — the incentive is disbursed in four equal instalments linked to project milestones, not as a single upfront payment.

PYQ 3:

Assertion (A): Round 1 of the coal gasification scheme is described by the Ministry of Coal as receiving an "overwhelming response."

Reason (R): Seven applications were received in Round 1 from major public and private sector companies, including Adani Enterprises and NTPC.

A) Both A and R are true, and R is the correct explanation of A

B) Both A and R are true, but R is not the correct explanation of A

C) A is true, but R is false

D) A is false, but R is true

Answer: A

Explanation: The Ministry's characterisation of the response as strong (A) is directly explained by the fact that seven applications came in from major companies in the very first round (R).

✍️ Mains Answer Pointers

Question 1 (150 words): What is the significance of the Scheme for Promotion of Surface Coal/Lignite Gasification Projects for India's energy security?

⚠️ Examiner Trap

Trap 1: Students confuse coal gasification with coal liquefaction. The correct fact is that gasification converts coal into synthesis gas (syngas), while liquefaction converts coal into liquid fuels — this scheme is specifically about gasification.
Trap 2: A common wrong assumption is that the scheme's financial incentive is paid upfront in full. The reality is that it is disbursed in four equal instalments, each linked to achievement of project milestones.
Trap 3: Many students miss that this Rs 37,500-crore scheme is not India's first coal gasification support scheme. Always remember that an earlier, smaller Rs 8,500-crore scheme already has projects under implementation.