Examining the Hydropower Economy of J&K State

Out of total power demand of 17,323 million units at present, the power generation from the state-owned power houses is only 2562 million units and with the transformation and growth, per-capita energy consumption of the state has increased from 989.91 kWh in 2014-15 to 997.89 kWh in 2015-16
Examining the Hydropower Economy of J&K State
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Possessing huge hydroelectricity potential, the J&K State is deficient in power to the extent that there is shortfall even in case of electricity utility. Energy shortage is one of the main reasons behind the state's industrial backwardness which has given rise to serious problems like growing unemployment in the State. Nevertheless, if the existing hydroelectricity potential is realized, the State will not only become self-sufficient in energy but will also have energy surplus. The export of surplus energy will enable the State to enhance its own revenue resources largely and can meet easily its growing budgetary requirements, thereby open a new phase in the process of economic transformation of Jammu and Kashmir.

Significantly, the state would cross the breakeven point of power sector in 2019-20 despite its substantial water resources with the potential to generate hydroelectricity sufficient enough to meet not only its whole power requirements, but satisfy a good portion of the needs of northern states. Due to unhealthy economic position of the state, civil disturbances, outdated machines and technology, power generation has remained a serious area of concern. These issues compelled the state to purchase power generated from its own water resources at high price. On power purchase, the state spent Rs 4600 crores in 2015-16; Rs 4,719.60 crore in 2014-15, Rs 3, 945.85 crore in 2013-14, Rs 3870 crore in 2012-13, Rs 3000 crore in 2011-12, Rs 2200 crore in 2010-11; Rs 1997 crore in 2009-10; Rs 2034 crore in 2008-09; Rs 1750 crore in 2007-2008; Rs 1355 crore in 2006-07; Rs 1674 crore in 2005-06 and Rs 1318 crore in 2004-05. As a whole, the state spent Rs 32,442.85 crores to meet its power requirements. This increasing trend of power purchase means that the state is losing considerable portion of its precious resources on power expenditure which could have been used for its crucially important developmental works. 

The power requirements of the state is expected to reach 19,500 million units during 2020-21(16th All India Power Survey) which signifies that major portion of state budget will be needed to buy power, implying that state is losing on both sides (generation and demand). The National Hydro Power Corporation (NHPC) which is utilizing state's water resources, has earned Rs 19000 crores since last 14 years on account of selling power to the state which adversely affected the cash-starved state of J&K. Out of total power demand of 17,323 million units at present, the power generation from the state-owned power houses is only 2562 million units and with the transformation and growth, per-capita energy consumption of the state has increased from 989.91 kWh in 2014-15 to 997.89 kWh in 2015-16. This bulging demand of electricity and power purchase expenditures will spurt the return of power houses constructed and owned by the NHPC. 

The power sector of the state is critically suffering from Indus Water Treaty which benefits both India and Pakistan. The compensation that J&K desires over the rivers flowing across its territory, constitutes the heavy financial loss of Rs. 265 crore on Baglihar power house and a loss of Rs. 3325 crore on Chenab basin annually, taking together these losses since the treaty (1960), constitute the loss of Rs. 2,01,040 crore which, since then could have been utilized for the developmental activities to boost the state economy. Taking together both the issues i.e., state's loss due to Indus Water Treaty and the state's long pending demand to transfer the 390 MW DulHasti and 480 MW Uri-I power house to the state, the state would be continuously suffering on its development front. If, however, these two issues are resolved, this would help the state in designing its short term and long term developmental programmes and would be of great assistance to address its serious problems like growing unemployment and inadequate budgetary resources. 

(Writer is Post Doctorate Research Fellow, CCAS, University of Kashmir)

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