The scheme will provide free LPG connections to five crore women belonging to Below Poverty Line (BPL) families between 2016 and 2019.
The prime minister gave away some cooking gas connections to people on the occasion.
He said schemes “must be made for the welfare of the poor not keeping in mind considerations of the ballot box”.
Modi greeted the workers, or shramiks as he described them, on the occasion of May 1, Labour Day.
“I laud the hard work of all shramiks and appreciate their role in the progress of India. In this century, our mantra should be: All shramiks of the world, let’s make the world one. Unite the world.”
He said the central government was working to allocate “tremendous resources” to develop Uttar Pradesh.
“Fruits of development have to reach the eastern part of India and then we will gain strength in the fight against poverty.”
He described Ballia as a land of revolutionaries.
“Ballia gave us Mangal Pandey. People from here give their lives to the nation. Connectivity in this region, rail lines, bridges… These issues were ignored but I congratulate local MPs for ensuring this changes.”
Modi is in Uttar Pradesh on a day-long visit.
He will visit Varanasi, his parliamentary constituency, later in the day and distribute e-rickshaws and interact with its owners. He will also launch a scheme for environment-friendly e-boats at the Assi Ghat.
“These will help bring down pollution,” Modi tweeted earlier.