New Delhi: The Union Cabinet approved a new scheme to expand small hydro power capacity, aiming to strengthen energy security and support clean energy growth across the country.
Officials said the scheme will run from 2026–27 to 2030–31 with an outlay of ₹2,584.60 crore. It targets the addition of about 1,500 MW of small hydro power capacity, especially in hilly and North Eastern regions.
At present, India has harnessed around 5,171 MW of small hydro power against an estimated potential of 21,133.61 MW. Therefore, the new scheme seeks to unlock a large share of untapped resources through targeted support.
The government highlighted that small hydro projects provide reliable round-the-clock electricity. Unlike solar or wind, these systems offer stable output and help maintain grid balance. As a result, they play a key role in the country’s clean energy transition.
Small hydro power scheme targets capacity and jobs
The scheme includes financial assistance for project development. For North Eastern and border areas, it offers up to ₹3.6 crore per MW or 30% of project cost. Meanwhile, other regions will receive up to ₹2.4 crore per MW or 20% of project cost.
Officials expect the scheme to attract investments of about ₹15,000 crore. In addition, it will support preparation of detailed project reports for at least 200 projects to build a strong pipeline.
The initiative will also generate employment. Authorities estimate around 51 lakh person-days of work during the construction phase. Moreover, it will create long-term jobs in operations and maintenance, particularly in rural areas.
Small hydro power projects require limited land and have a low ecological impact. Therefore, they offer a sustainable solution for decentralised energy generation. These projects also help reduce transmission losses by supplying power close to demand centres.
The government said the scheme will promote indigenous manufacturing and strengthen local supply chains. Consequently, it aligns with the broader goal of building a self-reliant energy sector.
Officials added that the scheme will improve electricity access in remote regions. It will also support rural development and local economies by creating new opportunities.
Overall, the government said the initiative will accelerate clean energy adoption while ensuring reliable power supply through small hydro power.
