New Delhi, September 2nd: The Union Cabinet has approved a ₹4,136 crore financial assistance scheme to support hydroelectric power development in India’s North Eastern Region (NER). This initiative, led by the Ministry of Power, will provide central financial assistance (CFA) to state governments in NER, enabling them to participate in hydroelectric projects through joint ventures with Central Public Sector Undertakings (CPSUs).
Key Features of the Scheme
The scheme, set to run from FY 2024-25 to FY 2031-32, aims to support the development of 15,000 MW of hydroelectric capacity. Funding will be drawn from a 10% Gross Budgetary Support (GBS) allocated for the North East within the Ministry of Power’s budget. The CFA will cover up to 24% of a state government’s equity in a project, capped at ₹750 crore per project, though this limit may be adjusted on a case-by-case basis.
The scheme is designed to ensure that only financially viable projects receive assistance. To this end, states may need to waive or stagger free power commitments and reimburse the State Goods and Services Tax (SGST) to make projects feasible. This approach aims to encourage state participation, reduce project risks, and address issues such as land acquisition and resettlement, ultimately preventing delays and cost overruns.
Economic and Environmental Impact
This initiative is expected to bring substantial investment and job creation to the North Eastern Region, fostering economic growth through related industries like transportation and tourism. Additionally, the development of these hydroelectric projects will contribute to India’s goal of achieving 500 GW of renewable energy capacity by 2030, enhancing the flexibility and reliability of the national grid.
Background
This approval is part of a broader effort by the Indian government to promote hydro power. In 2019, the Cabinet introduced measures to make large hydro projects more viable, including classifying them as renewable energy sources and providing budgetary support for critical infrastructure.
Source: Press Information Bureau, New Delhi
