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Exemption from taxes, duties

Our State is rich in water resource but harnessing of this resource in the interests of the people and making it contributory to their well being and improved economy is still a distant cry. The statistics will reveal the truth in these words.  Jammu and Kashmir is bestowed with an estimated 20,000 Mega Watts hydro-power potential out of which 16475 Mega Watt has already been identified by the Central Electricity Authority. While so far only 3263.46 Mega Watt (16.3% of estimated potential) has been exploited, the achievement with respect to harnessing of small hydropower (up to 25 Mega Watt) has been particularly dismal. This has necessitated paying full attention towards the policy that helps small power generating units to come up without waste of time and make their contribution to the improvement of electric power supply in the State. It is with an eye on this objective that the State Government has taken some useful steps in recent past which deserve to be explained. Therefore the thrust is on new policy that encompasses the learning of past so many years, is investor friendly, facilitates the partnerships with private sector and focuses on time-bound implementation of the hydro-power projects in an environmentally sustainable manner.
In a recently held meeting the State Cabinet has given nod to the exemption from payment of taxes and duties by the upcoming hydroelectric power generating units run by the State. This includes exemption from payment of Water Usage Charges under the existing J&K Water Resources (Regulation and Management) Act of 2010. This exemption will be valid for a period of ten years from the date of issuance of official order to the same effect.
This is one more step taken by the Government towards improving and assuring power supply in the State which despite having water resources often suffers from shortage of power. However while entitling the upcoming hydroelectric power generating units, the viability of the units has to be ascertained. The Cabinet has directed the Finance Department to issue the necessary order of Government allowing exemption from payment of taxes and water levy which will take effect from the day on which order is issued by the Finance Department. We hope that the Finance Department will not take too long a time to comply with the directions issued by the Cabinet. Obviously, the Public Health Engineering, Irrigation and Flood Control Department which is closely linked to the decision taken by the Cabinet has been asked by the Cabinet to take further steps in consultation with the J&K State Water Resources Regulatory Authority, Power Development Department and Finance Department to operationalize this exemption.
We know that J&K State Hydroelectric Projects Development Policy-2017 is under contemplation for some time. It has not been approved as yet because the Empowered Committee headed by the Chief Secretary has recommended that necessary changes should be carried out in the draft of the policy so that under this policy all  Independent Power Producers (IPPs) falling  under tariff based bidding projects are considered for award.
There is another category of power generating units and these are the projects being executed by the State Government through Joint Ventures.  The Cabinet decided that necessary exemptions will be considered on case to case basis on the condition that similar concessions will be granted to the projects by the Joint Venture partners. These decisions will go a long way in ensuring commercial viability of the projects in the overall interest of the State.

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