The Union Cabinet on March 18 approved the Small Hydro Power (SHP) Development Scheme for FY 2026-27 to FY 2030-31 with an outlay of ₹2,584.60 crore for approximately 1,500 MW capacity. Projects of 1-25 MW will be supported, with special focus on hilly and North-Eastern states. Financial assistance in NE states and border districts is ₹3.6 crore per MW or 30% of cost (max ₹30 crore/project), while other states get ₹2.4 crore per MW or 20% (max ₹20 crore). The scheme is expected to attract ₹15,000 crore total investment, generate 51 lakh person-days of employment during construction, and contribute to India's 500 GW non-fossil fuel target by 2030. ₹30 crore is allocated for preparing DPRs for 200 future projects.
Cabinet Approves Small Hydro Power Development Scheme with ₹2,584.60 Crore Outlay for FY2026-31
AQuick answer
Cabinet approved SHP Scheme with ₹2,584.60 crore for 1,500 MW capacity over FY2026-31; expected to attract ₹15,000 crore investment.
Key facts
- The Union Cabinet approved the Small Hydro Power (SHP) Development Scheme for FY 2026-27 to FY 2030-31 with an outlay of ₹2,584.60 crore for approximately 1,500 MW capacity.
- Projects of 1-25 MW will be supported, with special focus on hilly and North-Eastern states.
- Financial assistance in NE states and border districts is ₹3.6 crore per MW or 30% of cost (max ₹30 crore/project).
- The scheme is expected to attract ₹15,000 crore total investment and generate 51 lakh person-days of employment during construction.
- ₹30 crore is allocated for preparing DPRs for 200 future projects, contributing to India's 500 GW non-fossil fuel target by 2030.
PYQPrelims/PYQ angle
- RAS 2024 What are the aims of National Green Hydrogen Mission of India?
Mains angle
Q: Analyse the Small Hydro Power Development Scheme approved by the Union Cabinet, its financial structure, and contribution to India's non-fossil energy target.
Answer (50 words): The Union Cabinet approved the Small Hydro Power Scheme for FY2026-27 to 2030-31 with ₹2,584.60 crore outlay for 1,500 MW capacity. Projects of 1-25 MW get ₹2.4 crore per MW in general states and ₹3.6 crore in North-East, attracting ₹15,000 crore investment towards India's 500 GW non-fossil target.
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Frequently asked questions
What is the Small Hydro Power Development Scheme approved by the Cabinet in March 2026?
The **Small Hydro Power (SHP) Development Scheme** was approved by the Union Cabinet on **March 18, 2026** for the period **FY 2026-27 to FY 2030-31** with an outlay of **₹2,584.60 crore**. It supports development of approximately **1,500 MW** of small hydropower capacity through projects ranging from **1 to 25 MW**, with special focus on **hilly and North-Eastern states**.
What is the financial assistance available under the Small Hydro Power Scheme for different states?
Under the SHP Development Scheme, financial assistance varies by location: - **North-Eastern states and border districts**: **₹3.6 crore per MW** or **30% of project cost**, whichever is lower, capped at **₹30 crore per project** - **Other states**: **₹2.4 crore per MW** or **20% of project cost**, capped at **₹20 crore per project** The higher support for NE states reflects the strategic importance of energy development in the region.
How much total investment and employment is the Small Hydro Power Scheme expected to generate?
The Small Hydro Power Development Scheme is expected to: - Attract **₹15,000 crore total investment** (significantly more than the ₹2,584.60 crore government outlay) - Generate **51 lakh person-days of employment** during construction - Develop approximately **1,500 MW** of clean energy capacity The scheme contributes to India's goal of **500 GW non-fossil fuel capacity by 2030**.
Why does the Small Hydro Power Scheme give special focus to North-Eastern and hilly states?
The **Small Hydro Power Scheme** gives special focus to **North-Eastern states and hilly regions** because: - These areas have **abundant river and stream resources** ideal for small run-of-river hydro projects - They face **energy access challenges** due to difficult terrain and sparse grid connectivity - Higher financial assistance (**₹3.6 crore/MW vs ₹2.4 crore/MW** for other states) compensates for higher construction costs in remote areas - Strategic importance for **border area development** and national security considerations
What is the size range of projects eligible under India's Small Hydro Power Development Scheme?
Under the **Small Hydro Power (SHP) Development Scheme**, projects with installed capacity of **1 MW to 25 MW** are eligible for government support. Projects below 25 MW are classified as small hydro — distinct from large hydro dams. Additionally, **₹30 crore** from the scheme is specifically allocated for preparing **Detailed Project Reports (DPRs) for 200 future projects**, building a pipeline for post-2031 development.
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