Union Cabinet Approves ₹2584 Cr Small Hydro Power Scheme – What It Means?

The Union Cabinet has approved the Small Hydro Power (SHP) Development Scheme. The scheme announced for the period FY 2026-27 to FY 2030-31 with the financial outlay of ₹2584.60 crore. This scheme aims to develop around the 1500 MW of small hydro power capacity across India. It also focuses on promoting clean energy, especially in hilly and North Eastern regions. This initiative is expected to boost renewable energy generation, create jobs and support sustainable development in remote areas.

Small Hydro Power Scheme: Key Features and Objectives

The Small Hydro Power Scheme is to designed to promote the renewable energy through decentralized hydropower projects which are ranging between 1 MW to 25 MW capacity.

It aims to utilize untapped hydro potential and make to achieve with full potential.

This scheme focus on the increasing clean energy production while ensuring minimal environmental impact.

It also supports the development in remote and difficult regions where large power projects are not feasible.

Financial Assistance For Small Hydro Power Scheme 2026

The SHP Scheme 2026 will provides financial incentives to encourage investment in small hydro projects across different states.

This assistance varies based on location.

• North-East & border areas: ₹3.6 crore per MW or 30% of cost (max ₹30 crore per project)
• Other states: ₹2.4 crore per MW or 20% of cost (max ₹20 crore per project)

A total of ₹2,532 crore has been allocated specifically for project development, ensuring strong financial backing.

Boost to Renewable Energy India and Investment

The Small Hydro Power Scheme is expected to the attract investments of around ₹15,000 crore in the sector.

This will significantly boost to strengthen renewable energy India initiatives.

The scheme also promotes the use of 100% indigenous equipment and also supporting the Atmanirbhar Bharat mission.

It also encourages the domestic manufacturing and reduces dependency on imports.

Employment Generation and Rural Development

The SHP Scheme 2026 will generate approximately 51 lakh person days of employment during construction.

It will also be create long-term jobs in operation and maintenance.

Since these projects are located in rural and remote areas and they will promote local economic development.

Question

Q. What is the total outlay of the SHP Development Scheme?

A) ₹1500 crore
B) ₹2000 crore
C) ₹2584.60 crore
D) ₹5000 crore