Centre against states imposing water cess on hydropower projects: Power Minister Manohar Lal Khattar

New Delhi: Union Minister of Power and Urban Affairs Manohar Lal Khattar on Thursday said the Power Ministry is not in favour of states imposing water cess in respect of hydropower projects.

He was speaking to media persons in Shimla after reviewing the power and housing ministries activities in Himachal Pradesh.

"The states imposing water cess on hydropower projects to their benefit would be burden to electricity consumers of entire country. The Centre is against imposing water cess. We have already told the states not to impose such cess," he said.

Commenting on the Himachal Pradesh Government move to impose water cess, he said the High Court had quashed such proposal, he said.

The issue became important when the Himachal Pradesh government passed the Himachal Pradesh Water Cess on Hydropower Generation Bill in March 2023. But the Himachal Pradesh High Court declared the water cess levied by the state government on hydropower generation as “unconstitutional” after around 40 power-generating companies challenged the state’s Water Cess Act in the court.

Besides Himachal Pradesh, Uttarakhand, Jammu and Kashmir and Sikkim have imposed water cess on hydropower generation even as the Union Power Ministry termed it illegal and dozens of power producers challenged its validity.

During review meeting the Minister also emphasised that Himachal Pradesh has a huge hydro-power potential which should be effectively utilised and emphasised that Centre and the state should jointly work in resolution of pending issues.

Later in the day, the Minister also reviewed the urban development schemes and the power sector scenario for State of Punjab at Punjab Bhawan in Chandigarh.

The Union Minister assured for continued support and cooperation of the Centre in the overall development of the state.