India generates large quantities of agricultural residue, cattle dung, municipal organic waste and other biomass. The GOBARdhan scheme aims to turn these resources into clean energy, organic fertiliser, rural income and economic value, while strengthening India’s energy security.
Approved by the Union Cabinet on August 6, 2026, GOBARdhan, or Galvanizing Organic Bio-Agro Resources Dhan, has been approved as the National Circular Bioenergy Scheme with a total outlay of ₹23,731 crore.
The scheme will be implemented from FY 2026-27 to FY 2035-36 and aims to increase domestic Compressed Biogas (CBG) production nearly ten-fold.
What is the GOBARdhan scheme?
GOBARdhan was originally launched in 2018 under the Swachh Bharat Mission (Grameen) as part of Solid and Liquid Waste Management. It focused on converting biodegradable waste such as animal waste, kitchen leftovers, crop residue and market waste into biogas and bio-slurry.
The 2026 scheme builds on this foundation and brings the CBG ecosystem under one national framework administered by the Ministry of Petroleum and Natural Gas. Earlier, the CBG ecosystem was spread across four different ministries.
The unified framework is designed to provide assured demand, stable pricing, capital assistance, pipeline infrastructure, credit support and technology development for the CBG sector.
How will GOBARdhan support Compressed Biogas?
Compressed Biogas is chemically equivalent to natural gas and can be integrated into the existing gas ecosystem. This gives domestically produced CBG a role in meeting demand across transport, households, industry and commercial sectors.
The scheme has six major components:
First, a CBG Offtake Assurance framework will provide a more predictable market for producers. Procurement by City Gas Distribution entities will support the notified CBG obligation of 3% in FY 2026-27, 4% in FY 2027-28 and 5% from FY 2028-29 onwards for the CNG transport and PNG domestic segments.
Second, GOBARdhan introduces an administered price of ₹2,110 per MMBTU with a minimum 10-year framework.
Third, eligible greenfield CBG projects can receive capital assistance of up to ₹2 crore per tonne per day of installed CBG capacity. This support can also cover critical value-chain assets for feedstock aggregation, organic manure processing and value addition. Brownfield projects that expand their production capacity will also be eligible.
The scheme also supports pipeline infrastructure connecting CBG plants with trunk pipelines and City Gas Distribution networks. The scheme also includes credit guarantee support to help improve access to finance for eligible CBG projects
The sixth component is the CBG Ecosystem Challenge Fund, which will support feedstock mapping, aggregation infrastructure, district-level CBG planning, technology adoption, organic manure value addition, capacity building and stakeholder awareness.
What does GOBARdhan mean for farmers, rural entrepreneurs?
GOBARdhan is designed to create local economic activity around agricultural residue, cattle dung and other organic resources. CBG plants can generate opportunities across feedstock supply, transportation, plant operations and organic manure production.
Under the scheme, a dedicated credit guarantee mechanism will strengthen lender confidence and expand institutional credit for eligible MSME-based CBG projects.
By sharing a portion of lending risk, the mechanism is intended to improve access to affordable finance, reduce collateral requirements and support faster project development.
For rural entrepreneurs and MSMEs, measures such as capital assistance and credit guarantee support are intended to improve the viability and financing environment for eligible CBG projects.
Building a circular bioeconomy
The larger objective of GOBARdhan is to connect waste management, clean energy, agriculture and rural enterprise within a circular bioeconomy.
By creating a framework around demand, pricing, finance, infrastructure and technology, the scheme seeks to make organic resources more economically valuable while supporting cleaner waste management and domestic energy production.
For India, the idea is straightforward: agricultural residue, cattle dung and other organic waste need not remain a disposal challenge. With the right infrastructure and market, they can become part of the country’s clean energy system, rural economy and long-term energy security.
