Hydro Project Cess Punjab has emerged as a fresh concern after Himachal Pradesh imposed a new levy on hydroelectric projects. The Himachal government has introduced a two percent land revenue cess on hydro projects. This decision adds an estimated ₹200 crore annual burden on Punjab, which already faces heavy debt stress.
Projects under the Bhakra Beas Management Board will bear a total annual load of ₹433.13 crore. Punjab, Haryana, and Rajasthan will share this cost. BBMB has formally objected to the move. Punjab had earlier submitted written objections on December 24, 2025.
During a January 3 meeting with officials from partner states, Himachal’s Chief Minister clarified the need for a land revenue cess. The state claims the levy applies to non-agricultural land use.
Himachal had earlier imposed a water cess in March 2023. Courts later struck it down as unconstitutional in March 2024. After that setback, the state issued a fresh gazette notification on December 12, 2025, introducing the new cess.
Punjab argues hydro projects serve public interest, not commercial gain. It says land compensation was already paid earlier. The state also objects to calculating cess on total project cost.
Punjab Power Corporation also faces an added ₹16.32 crore burden on the Shanan Hydel Project. A legal challenge now appears likely.
