The scheme, "Nabakrushna Choudhury Seccha Unnayan Yojana", has been named after former chief minister and freedom fighter Nabakrushna Choudhury.
Law Minister Pratap Jena said this after a proposal in this regard was approved at the cabinet meeting presided over by Chief Minister Naveen Patnaik today.
Stating that the scheme would be implemented with an outlay of Rs 635 crore over a period of three years, Jena said it would be funded from the state's own resources.
The cabinet also decided to reduce the rate of VAT to 5 per cent on use of natural gas in industrial and domestic sectors while it will be 15 per cent when used as fuel in vehicles, said Finance Minister S B Behera.
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He said the state would receive revenue of around Rs 9 crore per annum from these commodities.
The cabinet also approved amendment to the Wildlife (protection) (Odisha) Rules, 1974 for enhancement of compensation payment for human killing and death of sheep, goat and lamb by wild animals.
The cabinet also approved a proposal to take Rs 1071 crore loan from the World Bank for development of infrastructure in 140 colleges and 11 universities.