Centre’s SHP Development Scheme – a grand opportunity at hand for J&K and Ladakh

JK News Today News Analysis

Grand news has come for all hilly states across the country and it is particularly so with regard to Jammu and Kashmir and Ladakh, the two union territories rich in water resources but short on power supply.

The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the ‘Small Hydro Power ( SHP) Development Scheme for the period FY 2026-27 to 2030-31’ with an outlay of Rs.2584 .60 crore for installation of Small Hydro Power ( SHP) Projects of an approximate capacity of 1500 MW.

The official statement released after the cabinet meeting said “The scheme will support small hydro projects (between 1-25 MW capacity) to come up in different states and will especially benefit hilly and North Eastern states with high potential for such projects.

In North Eastern States and in districts with international border, central financial assistance to the tune of Rs.3.6 crore per MW or 30%of the project cost, whichever is lower with an upper limit of Rs.30 crore per project will be available. In other states Rs.2.4 crore per MW or 20% of project cost, whichever is lower with a cap of Rs.20 crore per project would be available. This will help in tapping the small hydro potential in remote and difficult to reach locations. An amount of Rs. 2,532 crore has been earmarked for such projects. This is likely to bring in Rs. 15,000 crore of investment in the small hydro sector giving a boost to the clean energy initiative, investment in remote and rural areas and creating significant employment opportunities. The investment will also leverage 100% of the plant and machinery from indigenous sources fulfilling the objective of Atmanirbhar Bharat”

For Jammu and Kashmir and Ladakh, this is great news. It will help the two union territories as these are having many water resources, small rivers and streams that can help in construction of small hydro electric power projects.

This will also further India’s objective of keeping the waters in J&K and Ladakh on the country’s side , and to prevent the flow of the waters to Pakistan .There is a lot of water in the tributaries of the Indus , Chenab and Jhelum rivers that flow to Pakistan . These tributaries can be used for setting up of SHPs and meet the local demand for electric in these two UTS that can help in setting up of small hydro-electric projects, which can meet the local demand for the electricity. This will ease pressure on the state exchequer as at the moment these two UTs incur a lot of expenditure on purchase of electricity.

J&K alone is spending Rs 8254 crore annually to purchase power, while Ladakh incurs more than Rs. 156 crore annually to do so. This is huge amount. Though both the UTs have the potential to construct big power projects and several are being constructed, especially in Chenab basin, but big projects incur heavy costs and take years for completion.

But the SHPs can be constructed in less time with big returns for the local villages and remote areas.

Launching of this Scheme will rejuvenate the Small Hydro Power sector and will help in exploiting the available potential at a much faster pace. SHP projects are environmentally sustainable, as they avoid large-scale land acquisition, deforestation, and displacement of communities. It will also promote socio-economic development of remote areas by boosting local investment, apart from creating long-term employment with project lifespan typically ranging from 40 to over 60 years.

This is particularly very relevant for J&K and Ladakh as it will help these two UTs to consolidate their strategic importance and self-dependence in economic sector.