J-K’s ‘power’ struggle: Row erupts over ‘handing over’ of hydel projects to NHPC

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)...

GS2 (Centre-State/UT Relations Federalism) + GS3 (Energy Infrastructure)

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.