Cabinet Approves Major Government Reforms – LPG Subsidy, Oil Company Compensation, and Road Infrastructure Projects | August 2025 Updates
The Union Cabinet, under the leadership of Prime Minister Narendra Modi, has recently greenlit a series of impactful policy measures aimed at supporting low-income households and enhancing infrastructure. These decisions, taken in August 2025, include the continuation of LPG subsidies under PMUY, a substantial compensation package for public sector Oil Marketing Companies (OMCs), and the approval of a 4-lane highway project under the Hybrid Annuity Mode in Tamil Nadu. This article covers the latest updates on these key government initiatives, their financial implications, and their expected socio-economic impact.
🔍 Job Info Table
| Organization Name | Post Name | Total Vacancies | Qualification | Age Limit | Application Start & End Date | Application Mode | Official Website |
|---|---|---|---|---|---|---|---|
| Government of India – Cabinet Approvals | LPG Subsidy Implementation, OMC Compensation, Infrastructure Development | N/A | Varies by Department (PMUY – Low-income households, OMCs – PSU Corporations) | Varies | Policy Effective FY 2025–26 | Automatic Roll-Out / Central Policy | https://sarkarynaukary.com |
📝 Key Highlights of Cabinet Decisions – August 2025
- Extension of targeted LPG subsidy for PMUY beneficiaries through FY 2025–26.
- Rs. 30,000 Crore compensation to Oil Marketing Companies for domestic LPG supply losses.
- Approval for construction of 4-lane highway between Marakkanam and Puducherry at a cost of Rs. 2,157 Crore.
🔹 Continued LPG Subsidy for PMUY Consumers – FY 2025-26
The Cabinet has approved the extension of a targeted LPG subsidy to beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY) in the financial year 2025–26. This measure aims to keep cooking gas affordable for low-income families amid global price fluctuations.
- Total Budget Allocation: ₹12,000 Crore.
- Subsidy Rate: ₹300 per 14.2 kg cylinder, up to 9 refills per year.
- For 5 Kg Cylinders: Subsidy to be provided on a pro-rata basis.
- Effective Date: Subsidy starts from April 1, 2025.
This financial support covers the cost differential and ensures usage continuity, protecting India's most vulnerable segments from volatile international fuel markets.
Background: PMUY was first launched in 2016 by the Ministry of Petroleum and Natural Gas to provide free LPG connections to women from BPL households. As of July 1, 2025, over 10.33 crore families are enrolled in this scheme.
Originally, the annual average refill rate in FY 2020 stood at around 3 per household. With continued support, this figure has now risen to approximately 4.47 refills in FY 2025.
Why This Matters?
The Cabinet's subsidy initiative not only improves access to clean fuel but also supports environmental sustainability and gender empowerment, reducing dependence on traditional biomass for cooking.
💰 Rs. 30,000 Crore Compensation to Public Sector Oil Companies
To cushion the financial burden borne by public sector Oil Marketing Companies (OMCs) due to heavily regulated domestic LPG prices, the Union Cabinet has cleared a compensation package of ₹30,000 crore.
Beneficiary OMCs:
- Indian Oil Corporation Limited (IOCL) – New Delhi
- Bharat Petroleum Corporation Limited (BPCL) – Mumbai
- Hindustan Petroleum Corporation Limited (HPCL) – Mumbai
Reason for Compensation: Despite rising global LPG prices in FY 2024–25, retail prices were kept stable in India. This led to significant under-recoveries for OMCs while maintaining consistent LPG supply across the country.
Key Points:
- Fund distribution to be determined by the Ministry of Petroleum and Natural Gas.
- Payouts will be provided in 12 installments to the eligible companies.
- This move is expected to stabilize operations and balance financial losses among PSU oil firms.
🛣️ Marakkanam–Puducherry 4-Lane Highway Project Approved
Under the Hybrid Annuity Mode (HAM), the Cabinet Committee on Economic Affairs (CCEA) has approved the construction of a 46 km long, 4-lane highway between Marakkanam and Puducherry in the state of Tamil Nadu.
Project Summary:
- Total Project Cost: ₹2,157 Crore
- Construction Cost: ₹1,118 Crore
- Land Acquisition: ₹442 Crore
- Ownership Mode: Hybrid Annuity Mode (HAM)
Connectivity Highlights:
The proposed road will improve connectivity between:
- National Highways: NH-32, NH-332
- State Highways: SH-136, SH-203
- Transport hubs: Puducherry Airport, Chennai Airport
- Ports: Cuddalore Minor Port
- Rail Stations: Puducherry, Chinnababusamudram
Out of the total 46 km length, nearly 34.7 km will be a new greenfield, access-controlled bypass around Puducherry city.
- Estimated Traffic: 17,800 Passenger Car Units (PCUs) per day by FY 2025
This crucial infrastructure project is expected to decongest city roads, boost tourism and industrial connectivity in Tamil Nadu and Puducherry, and support economic growth in the region.
📢 Conclusion
These approvals by the Union Cabinet address three major pillars of India's developmental vision: energy affordability, corporate stability, and infrastructure modernization. From making clean cooking gas accessible to millions of Indians, to financially supporting key energy suppliers, and enhancing national highways—the government continues to make strides toward inclusive growth and sustainable development. Keep visiting sarkarynaukary.com for detailed updates on central and state government job alerts, infrastructure projects, and policy reforms.
