Cabinet Gives Nod For Revised Hydro Projects Scheme With Rs 12,461-Crore Outlay

The Union Cabinet approved on Wednesday a revised scheme to provide budgetary support for hydroelectric projects with an outlay of Rs 12,461 crore and cumulative generation capacity of 31,450 megawatts. The scheme will enable the development of hydropower infrastructure in hilly areas, to be implemented from the current financial year to fiscal 2032.

As part of the revised scheme, the government has broadened the scope of budgetary support beyond roads and bridges to now include infrastructures like transmission lines, power houses, pooling points, ropeways, railway sidings and communication systems.

Strengthening existing roads and bridges leading to these projects will also be eligible for central assistance. The scheme will target hydropower projects with a capacity greater than 25 MW, including private-sector projects that have been awarded transparently, the government said in a statement.

It also covers around 15,000 MW of pumped storage projects. All PSPs awarded before June 30, 2028, will qualify for budgetary support.

To ensure fair distribution of funds, the budgetary support limit has been rationalised. Projects up to 200 MW will receive Rs 1 crore per MW, while those above 200 MW will receive Rs 200 crore and Rs 75 lakh per MW for additional capacity. In exceptional cases, support can go up to Rs 1.5 crore per MW with proper justification, it said.

This initiative is expected to accelerate the development of hydropower projects in India, especially in remote and hilly areas. It will also generate substantial direct employment for local communities and create indirect opportunities through sectors such as transportation, tourism and small businesses.

It will encourage fresh investments into the hydropower sector and incentivise timely completion of new projects.