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The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the revised scheme of budgetary support for the cost of enabling infrastructure for Hydro Electric Projects (HEP) with a total outlay of Rs 12,461 crore.  

The modified scheme of the Ministry of Power for a cumulative generation capacity of about 31,350 MW would be implemented from FY2024-25 to FY2031-32.

"This revised scheme would help in faster development of hydroelectric projects, improve infrastructure in the remote and hilly project locations and would provide a large number of direct employment to the local people along with indirect jobs," a Cabinet communique said.

It would encourage fresh investments into the hydropower sector and incentivise the timely completion of new projects.

The government has been taking several policy initiatives to address the issues impeding hydropower development like remote locations, hilly areas, lack of infrastructure etc. To promote the hydropower sector and to make it more viable, the Cabinet in March 2019 approved measures, namely declaring large hydropower projects as Renewable Energy sources, Hydro Power Purchase Obligations (HPOs), tariff rationalisation measures through escalating tariffs, budgetary support for flood moderation in storage HEP and budgetary support for the cost of enabling infrastructure - construction of roads and bridges.

The scheme will be applicable to all Hydro Power projects of more than 25 MW capacity including the private sector projects which have been allotted on a transparent basis.

This scheme will also be applicable to all Pumped Storage Projects (PSPs) including Captive/Merchant PSPs, provided that the project has been allotted on a transparent basis. A cumulative PSP capacity of about 15,000 MW would be supported under the scheme, according to the Cabinet.