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GOVERNMENT OF INDIA
MINISTRY OF COAL
LOK SABHA
UNSTARRED QUESTION NO. 3036
ANSWERED ON 11.03.2026
IMPLEMENTATION OF COAL GASIFICATION IN PUNJAB
3036. SHRI MALVINDER SINGH KANG:
Will the Minister of COAL be pleased to state
(a) the current status of implementation of the Coal Gasification Incentive Scheme in Punjab
particularly for small-scale industrial applications in the Anandpur Sahib Lok Sabha
Constituency:
(b) the number of applications received and the amount of financial assistance sanctioned under
Category-III (Small-Scale/Demonstration Projects) for Micro, Small and Medium Enterprises
(MSMEs) clusters in the Hoshiarpur and Rupnagar districts;
(c) the details of specific criteria for Viability Gap Funding (VGF) under the second round of
Request for Proposals (RFPs) published in September, 2025;
(d) whether specific criteria for VGF criteria account for the higher operational costs faced by
land-locked industrial clusters in Punjab and if so, the details thereof;
(e) whether the Government has received any representations regarding the technical feasibility
of coal gasification for brick kiln clusters in the Mohali and Nawanshahr regions and if so, the
details thereof; and
(f) the timeline by which the Government is expected to operationalize pilot projects in
Northern India to assist MSMEs in transitioning to clean coal technologies?
ANSWER
MINISTER OF STATE FOR COAL AND MINES
(SHRI SATISH CHANDRA DUBEY)
(a): The Coal/Lignite Gasification Financial Incentive Scheme approved by the Government
of India is designed to support and promote implementation of coal/lignite gasification projects
across the country. This scheme is not State-specific. Currently, no proposal has been received
for setting up a coal/lignite gasification project in Punjab or in Anandpur Sahib Lok Sabha
Constituency.
(b): No proposal has been received for setting of coal gasification project in the Hoshiarpur
and Rupnagar districts.(c) & (d): The Request for Proposals (RFPs) for the second round of financial incentives under
the Coal/Lignite Gasification Financial Incentive Scheme were issued on 30.09.2025 under
Category-II and Category-III.
Under Category-II, private sector as well as Government PSUs were allowed to participate for
availing lump-sum grant of ₹1000 crores or 15% of capex, whichever is lower, in respect of
each project. Under this category, a manufacturing plant of a minimum output of 0.4 million
tonnes per annum of either single downstream product or a combination of downstream
products through coal gasification could be set up.
Under Category-III, demonstration projects (indigenous technology) or small-scale product-
based Gasification Plants could be set up, under which lump-sum grant of ₹100 crores or 15%
of capex, whichever is lower, is allowed to the selected entity. The proposal should have a
minimum Capex of ₹100 crore and minimum production of 1,500 Nm3/hour of Syngas. To
meet the qualification criteria for demonstration project, the technology adopted must be
proved at pilot scale and the capex should be at least ₹ 100 Crores on coal gasification unit.
For small-scale projects under Category-III, a plant with similar technology must be in
commercial operation anywhere in the world. The plant must be producing syngas for the
purpose of gasification-based products.
The criteria for providing incentive under the Scheme is same throughout the country,
including Punjab.
(e): As on date, no such representation has been received.
(f): Under the Scheme, only one pilot project has been approved as of now which has its
scheduled commissioning in FY 2029-30. Further, proposal for another pilot project
under Category-III has been received in pursuance of advertisement issued on 30.09.2025.
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