What Happened
- On 27 March 2026, the Jammu and Kashmir government signed an implementation agreement with NHPC Ltd for two new hydropower projects — Uri-I Stage-II (240 MW) and Dulhasti Stage-II (260 MW) — totalling 500 MW under the BOOT (Build-Own-Operate-Transfer) model for 40 years.
- The agreement triggered a political row: J&K Deputy Chief Minister Surinder Chowdhary called for the return of all existing NHPC-run hydropower projects to the UT, arguing that control over local water resources must rest with J&K's people.
- A National Conference (NC) legislator, Sajad Shaheen, submitted a private member's resolution in the J&K Assembly, as per the party's 2024 election manifesto, demanding the central government return NHPC-operated projects in a phased manner.
- The controversy exposes a structural tension: while J&K is power-rich by geography, its consumers pay market rates to buy back electricity from the national grid, receiving only about 12% free power from NHPC projects.
- NHPC currently operates six projects in J&K with a combined installed capacity of 2,250 MW; two more (Ratle 850 MW and Pakal Dul 1,000 MW) are under construction.
Static Topic Bridges
NHPC and Hydropower Governance in J&K
NHPC Ltd (National Hydroelectric Power Corporation) was established in 1975 as a central public sector enterprise under the Ministry of Power to develop hydropower across India. It is now one of the largest hydropower utilities in the country. Its entry into J&K — which has an estimated hydro potential of over 20,000 MW — was driven by the region's security sensitivity and the central government's preference for direct control over strategic infrastructure.
- NHPC's six operational projects in J&K: Salal (690 MW), Uri-I (480 MW), Dulhasti (390 MW), Sewa-II (120 MW), Uri-II (240 MW), Kishanganga (330 MW) — total: 2,250 MW.
- Under standard NHPC agreements, the host state/UT receives approximately 12% free power from projects operated in its territory; the rest is sold to the national grid.
- J&K, as a UT, must purchase electricity at market rates to bridge its energy deficit — creating a paradox where a hydro-rich region has high power costs for consumers.
- BOOT model: private or central entity builds, owns, and operates an asset for a fixed period (40 years here) before transferring ownership to the UT government.
Connection to this news: The core grievance is that J&K signed away long-term operational control of its rivers, receiving only 12% free power in return — while bearing the ecological and displacement costs of large dams. The new 500 MW agreement replicates this contentious formula.
Centre-UT Relations and Resource Rights
Jammu and Kashmir was reorganised from a state into two Union Territories (J&K with legislature, Ladakh without) on 31 October 2019 under the Jammu and Kashmir Reorganisation Act, 2019, following the abrogation of Article 370 and the removal of statehood. As a UT with a legislature, J&K has limited autonomy compared to a full state — the Lieutenant Governor (centrally appointed) retains overriding authority on several matters under the Government of National Capital Territory of Delhi Act analogy.
- Article 370: provided J&K special status; abrogated via Presidential Order in August 2019.
- Under the Reorganisation Act, Entries in the State List in the Seventh Schedule that relate to matters of land, police, and public order vest in the Centre for J&K UT.
- Water/rivers are in the Concurrent List (Entry 17, List III) but hydropower projects involve inter-state and national grid considerations, pulling them toward central jurisdiction.
- J&K statehood restoration: promised by the Union government before the Supreme Court; the political demand for statehood is closely linked to the demand for greater control over natural resources.
Connection to this news: The hydropower controversy is directly linked to the UT status debate — a full state would have greater bargaining power and legislative authority over resource-sharing with central PSUs like NHPC.
River Waters and Hydropower — Constitutional and Legal Framework
Water is a state subject under Entry 17 of List II (State List) of the Seventh Schedule for inter-state rivers, but Article 262 empowers Parliament to provide by law for adjudication of disputes relating to the use, distribution, or control of inter-state river waters. The Inter-State River Water Disputes Act, 1956 operationalises this. For hydropower, the Electricity Act, 2003 governs the sector, and the Central Electricity Authority (CEA) prepares national plans for power development.
- Indus Waters Treaty (1960): India and Pakistan share the Indus river system; Western rivers (Indus, Jhelum, Chenab) are allocated to Pakistan for irrigation, with India having limited hydro use rights. Kishanganga and Ratle projects have been contested by Pakistan under this treaty.
- National Hydro Power Policy, 2008: provides incentives for hydro development including free power to host states.
- Hydropower projects above 25 MW require environmental clearance (EIA) and forest clearance; large projects typically cause displacement (resettlement and rehabilitation obligations under LARR Act, 2013).
- Inter-State River Water Disputes Tribunals: Cauvery, Krishna, Ravi-Beas, Vamsadhara — examples of water disputes adjudicated under Article 262.
Connection to this news: The Kishanganga and Ratle projects are already points of contention with Pakistan under the Indus Waters Treaty; domestically, the question of who controls J&K's rivers is now an intra-polity dispute between the UT government and the central PSU NHPC.
Key Facts & Data
- New projects signed (March 27, 2026): Uri-I Stage-II (240 MW) + Dulhasti Stage-II (260 MW) = 500 MW total.
- BOOT period: 40 years before transfer to J&K UT.
- Free power allocation to J&K from NHPC projects: approximately 12%.
- NHPC's existing capacity in J&K: 2,250 MW (6 projects).
- NHPC projects under construction in J&K: Ratle (850 MW), Pakal Dul (1,000 MW).
- J&K's estimated hydro potential: over 20,000 MW.
- NHPC established: 1975 under Ministry of Power.
- J&K UT status: since 31 October 2019 under Reorganisation Act, 2019.