The Union Cabinet has approved central financial assistance (CFA) to the state governments in north-east India towards equity participation for development of hydroelectric projects in the region. These projects will be a joint venture (JV) collaboration between state governments and central public sector undertakings. Under the scheme, a cumulative hydro capacity of about 15,000 MW would be supported.
The scheme has been allocated a budget of Rs 41.36 billion for a period of seven years from FY 2024-25 to FY 2031-32. The funding will come through a 10 per cent gross budgetary support (GBS) for north eastern region from the total outlay of the Ministry of Power. The state governments of north-east regions are allowed to contribute a maximum of 24 per cent of the project equity with an upper limit of Rs 7.5 billion per project. The CFA will be provided only to viable hydro electric projects. As an incentive, states will have to waive, stagger free power or reimburse SGST to make the project viable.
The major challenges addressed by this scheme are the issues of land acquisitions, settlements and local law and order. This will also reduce time and cost over-run of hydro projects.
