Cabinet clears projects worth ₹1 trillion for more rural roads, e-mobility, power, health cover

The Union cabinet on Wednesday cleared schemes worth over ₹1 trillion to build more rural roads, boost electric mobility, speed up hydropower projects and offer free health insurance cover for those aged 70 years and above.

The projects, approved ahead of crucial assembly elections this year, seek to improve the ease of living while leveraging the multiplier effect of infrastructure building on the overall economy. The largest outlay is for the rural roads scheme— ₹70,125 crore to be spent over five years from FY25 to FY29—to finance the building of roads totalling 62,500 km.

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An official statement issued after the cabinet meeting said 25,000 unconnected habitations will get all-weather road connectivity, which will catalyse socio-economic development and transform remote and rural areas. The road will also connect nearby government educations, markets and growth centres to benefit the local people. The central government will meet 70% of the cost and the rest will be met by states.

Union minister Ashwini Vaishnaw said at a briefing after the Cabinet meeting that the health cover for all senior citizens aged 70 and above irrespective of their income under Ayushman Bharat Pradhan Mantri Jan Yojana (AB-PMJAY) will benefit 45 million families with around 60 million senior citizens. The scheme offers free and cashless health insurance scheme of up to ₹5 lakh per family. The government has kept an outlay of ₹3,437 crore to implement this new initiative.

Raising clean energy capacity

In an effort to raise renewable energy capacity, the Cabinet approved ₹12,461 crore to develop enabling infrastructure for hydropower projects. This would enable setting up a cumulative capacity of 31.35 GW. Under the scheme, the Centre would provide financial support for building facilities including roads, bridges, transmission lines, ropeways and railway bridges. The incentive would be ₹1 crore per MW in the case of projects with a capacity of up to 200 MW. Larger projects would receive a support of ₹200 crore, plus ₹75 lakh per MW, for capacity above the 200 MW threshold.

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Noting that there is a potential of 133 GW hydro power capacity in India, Vaishnaw said, "This scheme will help in achieving the ambitious target of 500 GW installed non-fossil power generation capacity by 2030." 

Currently, India has an aggregate hydroelectric power capacity of nearly 47 GW. In April, the power ministry had said that projects with 15 GW capacity are under construction.

Subsidizing e-Mobility

The government also decided to allocate ₹10,900 crore for subsidizing electric mobility under a scheme called PM E-Drive. This will promote adoption of the green energy-powered automobiles including two-wheelers, three-wheelers, electric buses and trucks, as well as hybrid ambulances. Notably, the new EV subsidy scheme has no separate allocation to subsidize the cost of electric four-wheelers.

The PM E-drive scheme was created following the lessons from previous EV subsidy schemes, the two iterations of the heavy industries ministry's Faster Adoption and Manufacturing of Electric (and Hybrid) vehicles schemes, the minister said.

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Allocation under the new PM E-Drive scheme also covers expenditure on charging infrastructure for EVs. The Centre plans to create 88,500 charging centres, a presentation shared by the government showed.

The PM E-Drive scheme will also continue the localization norms imposed on vehicle manufacturers in previous subsidy schemes for electric vehicles.

The Centre also announced a ₹3,435 crore outlay under the PM eBus scheme to ensure payment security to the government's partners in public-private partnerships running electric buses. This scheme will be operational in 169 cities across the country.

Shailesh Chandra, president, Society of Indian Automobile Manufacturers (SIAM) welcomed the schemes, stating they reflected the government's “unwavering support for India's transition to electric mobility, fostering innovation and investment within the sector.”

Climate mission

The cabinet also cleared a project called Mission Mausam to make the country more weather-ready and climate-smart, with an outlay of ₹2,000 crore. It will help in tackling extreme weather events and the impacts of climate change. Additionally, the programme will help broaden capacity and resilience across communities, sectors, and ecosystems in the long run.

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Quoting earth sciences ministry secretary M. Ravichandran, Mint reported in July that the ministry had decided to augment the country's climate-tracking infrastructure to better predict weather and climatic conditions using artificial intelligence and machine learning technology.

Gireesh Chandra Prasad, Puja Das, Alisha Sachdev and Priyanka Sharma contributed to this story.