Chandigarh: between tThe tug-of-war between Himachal Pradesh on the one hand and Haryana and Punjab on the other over the water cess on hydropower projects has further intensified with a letter from the Union power ministry “dissuading” states from imposing such cess. Have given.
The cess was proposed by the Himachal Pradesh government to raise revenue for the hill state. However, it has been criticized by Haryana and Punjab – which are among the states to use the electricity generated by these projects – over the potential increase in the cost of electricity for their consumers.
A letter dated March 31 from the Union power ministry, addressed to states and union territories, has now come to light. ThePrint has a copy of the letter, which states that states imposing such a cess may not have access to power Allocation from the pool of unallocated quota of the Central Government in Central Generating Stations (CGS).
Appreciating the Centre’s letter, the Haryana government termed Himachal’s proposal to impose water cess as “wrong”. Although Himachal Pradesh Govt. Said it was an “internal matter of the state” and the central government had “no role” in it.
The Himachal Pradesh Legislative Assembly on March 16 passed the Himachal Pradesh Water Cess on Hydroelectric Generation Bill, 2023.
Among the hydroelectric projects in Himachal are the Bhakra Nangal and Beas projects which supply water and electricity to Punjab, Haryana, Rajasthan, Delhi and Chandigarh. Uttar Pradesh, Goa, Jammu and Kashmir are other states/UTs that buy power from Himachal.
Himachal Chief Minister Sukhwinder Singh Sukhu on Saturday met his Haryana counterpart Manohar Lal Khattar to clear “misunderstandings” regarding the issue. He had earlier met Punjab Chief Minister Bhagwant Mann on March 29.
Read also: United against Himachal’s water cess, Punjab and Haryana still braving it on Sutlej-Yamuna link
Letter
In the letter, the Union power ministry said that whenever it receives a request from a state or union territory for allocation of power from the allocated quota without CGS, the government will examine certain aspects.
It listed the criteria as “timely payment of subsidy, if any, declared by the State Government in the consumer tariff for distribution utilities, and whether any tax/cess has been specifically imposed by the State concerned. Hydropower or on renewable energy projects that have the potential to disrupt the interstate flow of electricity.
“Preference will be given to allocation of power from the unallocated quota to such states, which observe fiscal discipline and refrain from levying taxes/fees on flow of power to other states,” the letter said.
A senior official in the office of Haryana Chief Minister Manohar Lal Khattar, who requested anonymity, told ThePrint on Saturday: “From the contents of the letter, it is very clear that Himachal Pradesh’s proposal to levy water cess is wrong, and the hill states cannot charge it.”
However, Naresh Chauhan, media advisor to Himachal chief minister Sukhwinder Singh Sukhu, denied having received any letter from the central government and told ThePrint on Sunday that “The central government’s role would come only if Himachal Pradesh proposed a water cess on inter-state river water”.
“We have repeatedly clarified that we have proposed a water cess on hydro power at projects located within our state. It is a state subject and the central government has no right to interfere in it.
Himachal CM tries to pacify counterparts
Presenting the Himachal Pradesh Water Cess on Hydropower Generation Bill, 2023 in the Legislative Assembly on March 16, State Jal Shakti Department Minister and Deputy CM Mukesh Agnihotri said that 172 hydroelectric projects would get revenue of Rs 4,000 crore from the cess.
A week later, both Haryana and Punjab pass Unanimous resolution in respective assemblies against Himachal government’s proposal.
In the Punjab Assembly, Water Resources Minister Gurmeet Singh Meet Hayer, who introduced the resolution, said the cess would put an additional burden of Rs 1,200 crore on the participating states, the major share of which would be paid by Punjab.
Who introduced the resolution in the Haryana Vidhansabha? Khattar. Of this Rs 1,200 crore, Khattar said, his state would have to pay Rs 366 crore. He said that this would make electricity costlier in the state.
According to a press release issued by the Information and Public Relations Department of the Himachal Pradesh government on Saturday, Sukhu met Khattar at Haryana Niwas in Chandigarh and discussed various “bilateral issues”.,
Sukhu told his Haryana counterpart that the water cess would not cause any economic loss to Khattar’s state.
Sukhwinder Singh Sukhu told Khattar that the water cess was to be levied not on water but on electricity generated from 172 hydro projects. These projects are being run in Himachal Pradesh and not in Haryana.
Sukhu and Khattar agreed that senior officials of the two states would hold a meeting to discuss the future course of action on various joint projects including Renuka Dam, Kishau Dam and Adi Badri Dam.
Sukhu also invited Haryana to invest in hydropower projects and green hydrogen in the state. He said that investment in Himachal would prove beneficial for both the states.
Apart from this, talks were also held regarding the process of setting up new projects in Himachal Pradesh, to which the Chief Minister of Himachal Pradesh also agreed. He said that both the states would get the benefit of electricity and water.
However, after the meeting, a senior Haryana government official, requesting anonymity, told ThePrint that Khattar outrightly rejected the suggestions of the Himachal Pradesh chief minister on the issue of water cess on existing hydroelectric projects.
Khattar told Sukhu that Himachal Pradesh cannot levy any cess on old projects. It can do so only if the Haryana government agrees to set up a new project. CM further told Sukhu that the burden of this cess will fall on the people of Haryana.
According to a press release issued by the Punjab Information and Public Relations Department, on March 29, Punjab CM Bhagwant Mann had also rejected Sukhu’s water cess proposal when the two met at Sukhu’s official residence.
Maan told Sukhu that the water cess was not in the interest of Punjab and therefore he could not accept it.
However, to resolve the issue, both the CMs agreed that state chief secretaries and power secretaries would meet after every fortnight to ensure that there is no bickering between states.
(Editing by Anumeha Saxena)