Punjab Assembly calls Himachal Pradesh ordinance to impose water cess illegal; passes resolution

Chandigarh, March 22

Terming it illegal, the Punjab Assembly on Wednesday unanimously passed a resolution against the ordinance issued by the Himachal Pradesh government to impose water cess on the hydropower projects for non-consumptive use of water for power generation.

Moving the resolution, Minister for Water Resources Gurmeet Singh Meet Hayer said that with this new levy, there is an additional financial burden amounting to Rs 1200 crore per annum, of which a major burden is likely to be on Punjab. This new levy is not only the infringement of the exclusive rights of the state over its natural resources but will also result in an additional financial burden for generation of power.

The resolution says, “This House is concerned about the ordinance issued by the Himachal Pradesh government to impose water cess on the hydropower projects for non-consumptive use of water for power generation. The Himachal Pradesh state’s water resources are now the government’s property, while any proprietary, riparian, or usage rights with any individual, group, company, corporation, society, or community are deemed to have been terminated. The House acknowledges and recognises the right of the state of Punjab over the use of waters flowing into the state for all purposes. All the BBMB projects which have since been constructed with investment made by the state of Punjab, largely happen to be situated within the territorial jurisdiction of the state of Himachal Pradesh. With this new levy of water cess, the Government of Himachal Pradesh is trying to put avoidable tax burden on Punjab as it is evident from the objective of the ordinance. Punjab is under pressure from all the neighbouring states, whether it is the demand of the additional share of the river waters or levy of cess recently by Himachal Pradesh. With this new levy, there is an additional financial burden amounting to Rs 1,200 crore per annum, of which a major burden is likely to be on Punjab. This new levy is not only the infringement of the exclusive rights of the state over its natural resources but will also result in additional financial burden for generation of power resulting in the higher cost of generation of electricity. The levy of water cess by Himachal is against the provisions of the Inter-State River Water Disputes Act, 1956. Punjab through the Bhakra Beas Management Projects is already very liberal to release 7.19% of electricity of the composite share of Punjab.

“This House very strongly and unanimously resolves that this levy of water cess imposed by Himachal is illegal and, therefore, it should be withdrawn.

“This House recommends to the state government to request the Centre to use its good offices to prevail upon Himachal to withdraw the ordinance as it is in violation of the Inter-State River Water Disputes Act, 1956.”