Cabinet okays ₹84,000 crore for Samudra Manthan, extends PM-Kisan

India on Friday placed a bold new bet in its hydrocarbon hunt, greenlighting a ₹84,000-crore central programme to accelerate deep-sea oil and gas exploration. The initiative is critical for a country with a mixed record in offshore exploration, and comes amid rising urgency to secure energy needs in an unstable world.

The Union cabinet approved Samudra Manthan, or the National Offshore Exploration Scheme, which aims to unlock India’s offshore hydrocarbon reserves by supporting deepwater drilling, seismic surveys, and building common infrastructure. Alongside, the cabinet also extended the farmer income support scheme PM-Kisan for five years at a cost of ₹3.15 trillion, seeking to boost rural incomes and agricultural investment.

Under Samudra Manthan, which will cost ₹84,008 crore over five years, the government will reimburse deepwater drilling costs and part-fund 3D seismic surveys. It will also support scientific drilling in so-called frontier basins with unproven reserves, development of common offshore production and evacuation infrastructure, and creation of an integrated oil & gas manufacturing and services zone. It also provides for digital programme management, technology adoption, capacity building and international collaboration.

“Samudra Manthan is expected to catalyse reserve accretion of over 600 mmtoe (million tonnes of oil equivalent), substantially increase offshore exploration activity, promote higher domestic oil and gas production and strengthen indigenous manufacturing,” information and broadcasting minister Ashwini Vaishnaw said after the Cabinet meeting.

India imports nearly 85% of its crude oil requirement and around half of its natural gas consumption. Successive governments have attempted reforms such as the Open Acreage Licensing Policy (OALP), the Hydrocarbon Exploration and Licensing Policy (HELP), liberalized pricing for difficult fields, and opening almost the entire offshore acreage for exploration. Yet, exploration has remained below potential, particularly in deepwater and ultra-deepwater blocks where drilling costs are prohibitive. India's annual oil production has stagnated around 29-30 million tonnes, while natural gas production has improved only modestly thanks to new fields coming onstream.

Samudra Manthan shows the government's seriousness about strengthening India's exploration and production sector, said Rajnish Gupta, partner, tax and economic policy group, EY India. "Investments in large-scale seismic data acquisition and drilling of exploratory wells in deep- and ultra-deep waters will reduce geological uncertainty and de-risk exploration and lay the foundation for future discoveries. Good results can catalyse greater private investments in the sector,” Gupta added. Supporting shared infrastructure is important, he said, as it can improve lower costs and improve project viability. "This will support India's efforts to reduce import dependence while building a more resilient energy ecosystem,” Gupta said.

The government hopes the new incentive-based scheme will make frontier offshore projects commercially viable by sharing exploration risks. A government statement said the Centre has undertaken major reforms in the upstream sector over the past decade, by modernizing the legislative and contractual framework, strengthening the National Data Repository and opening almost the entire offshore acreage for exploration.

India liberalized its upstream oil and gas sector through the New Exploration Licensing Policy (NELP) in 1997, which introduced private participation but suffered from complex cost-auditing disputes. To streamline operations, the 2016 Hydrocarbon Exploration and Licensing Policy (HELP) replaced profit-sharing with a simpler revenue-sharing model, single-license coverage, and market-based pricing.

Farm front

The cabinet also approved continuation of Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) scheme till FY31, with an outlay of ₹3,15,614 crore. The scheme provides ₹6,000 annually to eligible farmer families in three instalments and is expected to benefit around 11 crore farmers. Minister Vaishnaw said the extension would provide income support to around 110 million beneficiaries. Since the scheme’s launch, ₹3,10,107 crore has been disbursed to farmers up to FY26.

The extension provides income certainty to small and marginal farmers, enabling them to meet recurring cultivation expenses such as seeds, fertilizers and labour," said Rakesh Arrawatia, professor at the Institute of Rural Management Anand (IRMA) and dean, School of Cooperative Banking and Finance. While the annual assistance is modest, the scheme injects liquidity directly into rural households and supports consumption, particularly in agrarian regions where farm incomes remain volatile," he added.

The scheme's continuation is expected to support rural demand and farm investment by providing timely cash support for seeds, fertilisers and other agricultural inputs. The assured income also helps reduce farmers’ dependence on informal credit, supports consumption in rural areas and encourages investment in agriculture and allied activities, creating a multiplier effect on the rural economy.

The decision reflects both economic and political considerations, noted Nishant Kumar, associate professor at the Centre for Political Studies, School of Social Sciences, Jawaharlal University. "Economically, PM-Kisan provides assured cash support to millions of farm households, while politically, it reinforces the government's long-term engagement with rural voters. The extension indicates that direct benefit transfers have become an important instrument of both welfare delivery and political mobilization," Kumar said.

In other decisions, the Cabinet approved the Pradhan Mantri Surya Sarovar Yojana with an outlay of ₹5,070 crore to develop 5,000MW of floating solar projects with energy storage systems. It also cleared an expanded Khelo India programme and enhanced assistance to National Sports Federations with a combined outlay of ₹36,441 crore for 2026-27 to 2030-31, nearly eight times the allocation under the previous scheme.

With inputs from Dhirendra Kumar.