Cabinet clears ₹79,459 crore refinery cost revision, approves decisions worth ₹1.74 lakh crore

The union cabinet on Wednesday approved a series of decisions with a combined financial implication of ₹1.74 lakh crore, led by a sharp revision in the cost of the HPCL Rajasthan Refinery project, alongside a fertiliser subsidy package and investments in hydropower and urban infrastructure.

The cabinet committee on economic affairs cleared an increase in the cost of the HPCL Rajasthan Refinery project at Pachpadra in Balotra district to ₹79,459 crore, up from ₹43,129 crore earlier.

The refinery, a joint venture between Hindustan Petroleum Corporation Ltd and the Rajasthan government, is a 9 million tonnes per annum greenfield refinery-cum-petrochemical complex with a high petrochemical intensity. Scheduled for commissioning by July 1, 2026, the project is expected to reduce import dependence in the petrochemical sector and strengthen India’s refining capacity.

Fertiliser subsidy outgo rises amid global price volatility

The cabinet also approved ₹41,534 crore under the nutrient-based subsidy (NBS) scheme for the 2026 Kharif season, marking an increase of about ₹4,317 crore compared to the previous year.

The subsidy aims to cushion farmers from fluctuations in global fertiliser prices and ensure the availability of phosphatic and potassic fertilisers at affordable rates during the sowing season.

Hydro projects in Northeast cleared with long gestation timelines

Two hydropower projects in Arunachal Pradesh were also approved, with a combined investment of over ₹40,000 crore.

The 1,720 MW Kamala Hydro Electric Project, with an outlay of ₹26,069.5 crore, and the 1,200 MW Kalai-II Hydro Electric Project, with an investment of ₹14,105.83 crore, are expected to strengthen power supply, support peak demand management and contribute to grid stability.

Both projects have long gestation periods of up to eight years and are expected to support infrastructure development in the Northeast.

Jaipur Metro Phase-2 to enhance urban mobility

The cabinet also approved the Jaipur Metro Phase-2 project, a 41-km corridor with 36 stations, at a cost of ₹13,037.66 crore.

The project, targeted for completion by 2031, is expected to improve urban mobility, reduce congestion and increase the share of public transport in the Rajasthan capital.

While the approvals span agriculture, energy and infrastructure, the refinery project accounts for nearly half of the total outlay, stressing the government’s focus on enhancing domestic refining and petrochemical capacity.