Water Tax For Cash Flow

Water Tax For Cash Flow

9 October 2010
The Telegraph (Kolkata)


Srinagar: Money is now set to flow into Kashmir’s cash-starved coffers. The Omar Abdullah government today passed a bill in the lower House of the Assembly making it incumbent on all consumers to pay for using water, the state’s most prized natural resource. According to the Jammu and Kashmir Water Resources (Regulation and Management) Bill, 2010, everyone, including national hydropower projects and those who keep animals for commercial purposes, will be taxed. So far, only households have been paying water tax, but the amount levied is a pittance. Sources said the tax is expected to generate Rs 850 crore every year. The move is being seen as an innovative way to make the Centre pay for generating power through projects in the state and make up for the losses as a result of the Indus water treaty with Pakistan. The treaty gives Islamabad the right to use waters of three of the state’s major rivers - Jhelum, Chenab and the Indus - but gives Jammu and Kashmir limited rights to use its own water resources. The bill was moved by Taj Mohiuddin, the minister in charge of public health engineering, irrigation and flood control, and passed by voice vote in the Legislative Assembly. It will now be sent to the Legislative Council, the House’s upper chamber, for ratification. The legislation envisages that any power generation company, whether owned by the state, Centre or a private consortium, will have to pay for water used for generating electricity. “Our preliminary estimates reveal that we will generate Rs 850 crore annually even if only 2 paise per cubic ton of water is charged from the power companies,” Mohiuddin said. Official sources said the Jammu and Kashmir government would benefit primarily from the NHPC-run projects which use the state’s water resources for power generation but pay only 12 per cent royalty. What this means is that if a project run by the NHPC, a Government of India enterprise, generates 100MW, the state’s share will be 12MW. Jammu and Kashmir has an estimated hydropower potential of 20,000MW, out of which 2,456MW have been harnessed so far in the state. Most of the power is generated by the NHPC. Work is on at 14 more state and central power projects with a total capacity of 3,445MW. Mohiuddin said the NHPC isn’t the only company that would have to pay for using water but also the state Power Development Corporation. The minister said the bill had a provision under which consumers would have to pay for loss of lives, too. He said a dam was constructed at Uri for a 450MW NHPC power project. “So far, the dam has claimed 25 lives. Who is responsible for it?”


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