The Gujarat government on Monday announced a reduction in the Value-Added Tax, or VAT, on compressed natural gas and piped natural gas by 10%, reported PTI. It also announced that two cooking gas cylinders will be given free every year to 38 lakh beneficiaries of the Centre’s Ujjwala scheme.

The decision, which will will cost the state exchequer Rs 1,650 crore, came at a time when the Gujarat Assembly polls are just a few weeks away. The date of the polls, however, have not been announced yet.

The price for CNG will reduce by Rs 6 per kg and that of PNG by Rs 5 per standard cubic metre, minister Jitu Vaghani said, adding that the state government will lose over Rs 1,000 crore in revenue with the tax cut.

Vaghani said the decision will help housewives, auto-rickshaw drivers and all those who use CNG-run vehicles.

Around 38 lakh families have LPG connections under the Ujjwala scheme. With the decision to provide two gas cylinders to each of these families every year, it will cost the government Rs 650 crore per year.

This LPG subsidy will reach the account of the beneficiary within three days of purchase of cylinder, Vaghani said.