Himachal water cess: 27 hydel companies register to operate

Despite the BJP-led Centre terming the imposition of water cess on hydel projects in Himachal Pradesh “illegal and unconstitutional” and directing the Congress government in the state to withdraw its decision last month, 27 companies have registered themselves on the portal set up for the purpose to operate in the state.

The 27 companies include two public sector undertakings of the Government of India, namely National Thermal Power Corporation Limited (NTPC) and the National Hydroelectric Power Corporation (NHPC). NHPC runs the Chamera project in Chamba, while NTPC operates the Koldam power project.

The Sukhvinder Singh Sukhu government has kept ₹500 as the registration fee.

Besides the Centre’s opposition, a case has been filed against the state government’s decision in the Himachal Pradesh high court. The petition was first filed by Mallikarjuna Rao of GMR Energies for promoting the Holi Bajoli power project in Chamba but was withdrawn on technical grounds. Thereafter, the Allain Duhangan Power Project filed a petition on which the court issued the state and the central government a four-week notice.

The high court did not stay the registration process.

“Many companies have registered themselves on the portal and many others will do so in future,” said a high-level official of the state jal shakti department. “The portal will c,lose on may 20 , its clear in the act that if the power project don’t register themselves on the portal they will be deemed registered

During its maiden budget session, the state government passed a Bill for imposing a water cess on March 16. After the governor gave his assent, the new law became applicable to 172 power projects and all future ones in the state.

Earlier, deputy chief minister Mukesh Agnihotri introduced the water cess Bill in the House. The government set up a three-member committee with the aim to generate ₹4,000 crore from the water cess. There sre 172 power projects in the state which are both small and micro ones.

The state did not consult neighbouring Punjab and Haryana before imposing the cess. The central government said that no state can take such a unilateral decision as it would lead to an increase in electricity tariff in other states.

The Himachal Pradesh government argued that it has not imposed the tax not on electricity, but on the water of the state. Agnihotri, being the jal shakti minister, introduced the Himachal Pradesh Water Cesson Hydropower Generation Bill, 2023, which was passed by voice vote on March 16.

He argued that the state has every right to decide on the matter within its jurisdiction and only the court can call its decision unconstitutional. He said that the government will seek legal recourse against the Centre’s direction.

The state government cited a similar cess being imposed in BJP-ruled Uttarakhand and neighbouring Jammu and Kashmir. Sikkim in the Northeast has also imposed a similar tax.

“The Centre remained silent when BJP-ruled Uttarakhand enacted a similar law to impose water cess,” Agnihotri said, adding that the law was enacted to generate revenue. “The debt burden in the state has increased to ₹75,000 crore and the state aims to generate ₹4,000 crore by collecting the water cess,” he said.