The compensation was sanctioned from the Prime Minister's National Relief Fund, the PMO said in a statement.
"Prime Minister has expressed his deep anguish over the loss of lives in the recent clashes in Muzaffarnagar district of Uttar Pradesh," it added.
Dr Singh yesterday condemned the violence and assured Chief Minister Akhilesh Yadav of all required help from the Centre in dealing with the situation.
Muzaffarnagar has been in the grip of violence for last few days and Army has been called in to assist the civil administration.
Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.