Page 61 - Policy Economic Report - March 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

towards an Aatmanirbhar Bharat, while also creating new opportunities for growth and investment in
the sector.

Union Minister of State for Power & New and Renewable Energy, Shri Shripad Yesso Naik, Shri Rajat
Kumar Mishra, Secretary, Department of Fertilizers (DoF) and Shri Santosh Kumar Sarangi, Secretary,
Ministry of New and Renewable Energy (MNRE) also attended the event along with other senior officials
from DoF, MNRE, and SECI.

Cabinet approves scheme on ‘Small Hydro Power (SHP) Development Scheme for the period FY 2026-
27 to FY 2030-31’

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the ‘Small Hydro
Power (SHP) Development Scheme for the period FY 2026-27 to FY 2030-31’ with an outlay of
Rs.2584.60 crore for installation of Small Hydro Power (SHP) Projects of an approximate capacity of 1500
MW.

The scheme will support small hydro projects (between 1-25 MW capacity) to come up in different
states and will especially benefit hilly and North Eastern states with high potential for such projects. In
North Eastern States and in districts with international border, central financial assistance to the tune of
Rs.3.6 crore per MW or 30%of the project cost, whichever is lower with an upper limit of Rs.30 crore per
project will be available. In other states Rs.2.4 crore per MW or 20% of project cost, whichever is lower
with a cap of Rs.20 crore per project would be available. This will help in tapping the small hydro
potential in remote and difficult to reach locations. An amount of Rs. 2,532 crore has been earmarked
for such projects. This is likely to bring in Rs. 15,000 crore of investment in the small hydro sector giving
a boost to the clean energy initiative, investment in remote and rural areas and creating significant
employment opportunities. The investment will also leverage 100% of the plant and machinery from
indigenous sources fulfilling the objective of Atmanirbhar Bharat.

The scheme will also incentivise the states to prepare the detailed project report for about 200 projects
to create a pipeline of small hydro projects in future. An amount of Rs.30 crore has been kept to
support state and central government agencies to prepare such DPR.

The scheme will support 51 lakh person days of employment during the project construction and will
also enable employment in maintenance and operation of these SHPs which will come up in largely rural
and remote locations. SHP projects being decentralized in nature, the requirement of long transmission
line is minimal, which also reduces the transmission losses.

Government Drives Green Hydrogen Expansion and Strengthens Clean Energy Transition

The Government of India is implementing the National Green Hydrogen Mission (NGHM), with an
objective to make India a global hub of production, usage and export of Green Hydrogen and its
derivatives.

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