The Union Cabinet has approved a ₹2,584.60-crore development scheme to revitalize India’s small hydro power sector from FY 2026–27 to FY 2030–31. This initiative aims to add 1,500 MW of capacity through projects ranging from 1 MW to 25 MW, with a strategic focus on the North Eastern and hilly states. The government will provide central financial assistance of up to ₹3.6 crore per MW for border and North Eastern regions, and ₹2.4 crore per MW for other states, aiming to attract ₹15,000 crore in total investment while relying entirely on indigenous machinery under the Atmanirbhar Bharat vision.
Beyond clean energy expansion, the scheme is designed to spark socio-economic growth in remote areas by generating approximately 51 lakh person-days of employment during construction. Because these decentralized projects require minimal land acquisition and transmission infrastructure, they offer an environmentally sustainable way to reduce power losses. Additionally, a dedicated fund of ₹30 crore has been set aside to help agencies prepare detailed project reports for 200 future sites, ensuring a long-term pipeline for a sector where projects typically last 40 to 60 years.
