The Union Cabinet, led by Prime Minister Narendra Modi, has approved a ₹4,136 crore scheme to support hydroelectric project development in northeastern India. Announced on August 28, this initiative will provide central financial assistance to northeastern states for their equity stakes in hydroelectric projects through joint ventures with central public sector undertakings (CPSUs).

The scheme, which will run from FY 2024-25 to FY 2031-32, aims to facilitate the development of around 15,000 MW of hydroelectric capacity. It will be funded by 10 percent of the Gross Budgetary Support (GBS) allocated to the North Eastern Region (NER) from the Ministry of Power’s budget.

A joint venture company will be established for each project involving a Central PSU and the state government. Grants towards the state’s equity share will be capped at 24 percent of the total project equity, with a maximum of ₹750 crore per project. This cap may be adjusted on a case-by-case basis if needed.

The assistance will be limited to viable projects, with states required to waive or stagger free power and/or reimburse State Goods and Services Tax (SGST) to make the projects feasible. The scheme is designed to encourage state involvement, thus sharing project risks and responsibilities more fairly. It is expected to address challenges like land acquisition, rehabilitation, and local law and order, reducing delays and cost overruns.

This initiative is projected to significantly boost the region’s hydropower potential, attract substantial investments, and generate numerous direct and indirect job opportunities in sectors like transportation, tourism, and small-scale industries. Additionally, the scheme will contribute to India’s goal of achieving 500 GW of renewable energy capacity by 2030 and enhance the reliability and flexibility of the national grid.