Himachal government urges Centre to hike royalty in hydropower projects

Chief Minister of Himachal Pradesh, Sukhu, has written to the Chief Minister of Haryana, Khattar, urging the Centre to raise the royalty rate on hydropower projects. The request is part of a broader push to secure financial support for the development of HimChandigarh and Aero City in Kangra district. Sukhu said the additional revenue could help fund planned urbanisation, boost economic growth, attract tourism and encourage investment in the state. The appeal comes amid ongoing discussions about the role of hydropower in Himachal’s development strategy.

Hydropower has long been a cornerstone of Himachal’s energy mix, with numerous dams and power stations dotting the state’s river valleys. Royalty rates on electricity generated from these projects are set by the central government and have remained relatively static over the years. A higher royalty would increase the financial share that the state receives, providing more resources for infrastructure and public services.

The Himachal government argues that the current royalty structure does not reflect the full economic potential of the sector. By increasing the rate, the state could generate additional funds that would be directed toward the HimChandigarh and Aero City projects, which aim to create a planned urban environment, enhance connectivity and promote tourism in the Kangra region. The development plan envisions modern housing, commercial spaces and recreational facilities that could draw visitors and businesses alike.

Sukhu’s letter highlights the link between increased royalty revenue and the ability to meet the financial requirements of the urbanisation agenda. He emphasised that the state’s growth trajectory depends on sustainable investment in both energy and infrastructure. The chief minister also referenced the broader goal of attracting private investment, noting that a more favourable royalty regime could make hydropower projects more attractive to developers.

The request for a royalty hike is situated within a larger national conversation about the balance between energy production and environmental stewardship. While hydropower is considered a renewable source, large dams can have ecological impacts that require careful management. The Himachal government has not detailed specific changes to the royalty formula, but has indicated that a revised rate would be based on project size, capacity and other relevant factors.

If the Centre agrees to the proposal, the additional funds could be used to support the development of HimChandigarh and Aero City, aligning with the state’s broader goals of urbanisation, tourism promotion and investment attraction. The anticipated economic boost may also lead to job creation in construction, tourism and related services, supporting the state’s broader development objectives.

The Himachal government’s appeal underscores the importance of centre‑state coordination in addressing infrastructure and energy challenges. It also reflects a growing expectation that the central government will play a proactive role in supporting state‑level projects that align with national priorities such as tourism promotion and industrial growth.

Source: Hindustan Times