Mumbai: Finance Minister Nirmala Sitharaman on Saturday laid down plans for the expansion of National Gas Grid to 27,000 km from the present 16,200 km.

Currently, around 7,000 km of pipeline is under construction. Besides, the city gas distribution projects are expected to add several thousand more kilometres of steel pipeline.

India is the biggest emitter of greenhouse gases after the US and China. It aims to achieve the emission reduction targets pledged at twenty-first session of the Conference of the Parties (COP) in Paris by promoting the use of natural gas and green fuel.

The share of natural gas in India’s energy basket is 6.2%, against 23.4% globally. The government plans to increase it to 15% over the next decade.

Early this month, the as part of its focus on the north-eastern region, the Union government decided to provide ₹5,559 crore for the construction of the North East Gas Grid project across the states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura.

The Cabinet Committee on Economic Affairs had approved the project of Indradhanush Gas Grid Limited “with viability Gap Funding/ Capital Grant at 60% of the estimated cost of ₹9,265 crore (Including interest during construction)."

On 23 January the Ministry of Petroleum and Natural Gas released a draft city gas distribution policy that may be adopted by states to facilitate speedy implementation of city gas distribution (CGD) networks and value-added services. Reduced road taxes, value-added tax (VAT) may also be in the offing for gas-driven vehicles.

The policy directs a committee to be formed under the Chairmanship of Chief Secretary which will facilitate the creation of CGD infrastructure and value-added services by formulating policies and streamlining the processes for various permissions.

"It will cause setting up a suitable single-window clearance mechanism for the same in the state for the promotion development of CGD infrastructure and ease of doing business. Committee will also make a suitable mechanism for permissions from state divisions of The Petroleum and Explosives Safety Organisation, NHAI, Railways, etc," the draft policy stated.

In order to provide user-friendly clean and green fuel CNG and PNG to the general public at affordable and reasonable rates, the Value Added Tax (VAT) rates may be reviewed and rationalized to a uniform VAT rate with a ceiling of 5% and to promote faster investment in the CGD sector and development of Gas Based Economy.

"Further, to promote the safe usage of CNG/LNG in the transport sector, state policy thrust may be given by rationalizing road tax for factory fitted CNG/LNG vehicles and making them at par with Electric Vehicles (EVs)," the policy suggest.

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