Chief Minister Omar Abdullah Highlights Key Energy Reforms in Maiden Budget Speech
The Jammu and Kashmir government will soon introduce a comprehensive hydropower policy aimed at unlocking the Union Territory's vast potential of 20,000 MW and attracting substantial private investment. Chief Minister Omar Abdullah made the announcement during his maiden budget presentation in the Legislative Assembly on Friday.
“Our government is committed to accelerating hydropower development, driving sustainable growth, and transforming Jammu and Kashmir into a major energy hub,” Abdullah stated.
Significant Budget Boost for Power Sector
For the fiscal year 2025-26, the government has earmarked Rs 2,021.37 crore for the power sector—a substantial increase from Rs 762.80 crore allocated in 2024-25. Abdullah emphasized the government's strong commitment, describing the power sector as the backbone of Jammu and Kashmir's economic prosperity.
“Our vision is clear: to achieve energy self-sufficiency, become a net exporter of power, and ensure 24/7 affordable electricity for all households by 2027-28,” he added.
Accelerated Development of Hydropower Projects
Highlighting the gap between potential and current capacity, Abdullah noted that of the 20,000 MW hydropower potential, only 3,400 MW has been harnessed to date.
To bridge this gap, ongoing projects including Pakal Dul, Kiru, Kwar, and Ratle will collectively add over 3,000 MW by 2027. Additionally, planned initiatives such as Kirthai-I, Dulhasti-II, Bursar, Sawalkote, Uri-I Stage-II, Ujh, and Kirthai-II are expected to add another 4,500 MW within the next decade, positioning Jammu and Kashmir as a prominent power exporter.
Reduction in Power Sector Losses and Debt Management
Chief Minister Abdullah also highlighted significant improvements in financial sustainability. Under-recovery in the power sector declined from Rs 6,552 crore in 2022-23 to Rs 5,244 crore in 2023-24, with a target of Rs 4,200 crore for 2024-25.
He pointed out that past high Aggregate Technical and Commercial (AT&C) losses resulted in the borrowing of Rs 28,000 crore over recent years, escalating the public debt from 48% of the Gross State Domestic Product (GSDP) in 2015-16 to 52% in 2023-24.
“To address this, we are strategically reducing high-cost debts, optimizing liabilities, and recalibrating repayment schedules to ensure long-term fiscal stability,” Abdullah stated.
Revamped Distribution Sector Scheme (RDSS) and Smart Metering Initiatives
Under the Centre-sanctioned Revamped Distribution Sector Scheme (RDSS), Jammu and Kashmir has secured Rs 5,620 crore to enhance power distribution infrastructure. The Union Territory has also submitted an ambitious investment proposal of Rs 12,922 crore, prioritizing smart metering, loss reduction, and modernization of distribution networks.
Phase-I of RDSS has achieved over 40% progress in loss reduction efforts, and projects remain on track for completion by 2026, with more than 40,000 smart meters already installed.
In addition, the government is transforming the visual appeal of Jammu and Srinagar by shifting overhead power lines underground along major routes.
Boosting Solar Energy and Renewable Initiatives
Complementing hydropower expansion, the government is actively promoting solar energy under the PM Surya Ghar Muft Bijli Yojana. Solarization of 22,494 government buildings, generating a combined capacity of 314 MW, is slated for completion by December this year.
Tackling Cost-Revenue Gap and Enhancing Efficiency
Currently, a significant gap persists between the cost of supplying power (Rs 7 per unit) and revenue collection (Rs 2.5 per unit), attributed primarily to systemic inefficiencies and high transmission losses.
“To bridge this revenue gap, our government is fully implementing smart metering, streamlining billing and collections, and modernizing the distribution network,” Abdullah assured.
The government aims to reduce AT&C losses from 41% to 25% by 2025-26, ensuring long-term financial viability of the power sector.
Recognition and Workforce Safety Initiatives
Recognizing the crucial contributions of power sector personnel, the chief minister announced plans to institute the 'Chief Minister's Award' to reward exemplary efforts in reducing AT&C losses and conducting energy audits.
Abdullah further committed to establishing dedicated linemen huts and essential amenities to improve safety and working conditions for field staff, many of whom work under hazardous conditions.
“Ensuring the safety and well-being of our power sector workforce is paramount,” Abdullah emphasized, adding that a fully equipped Power Training Institute will also be established for continuous skill enhancement and professional development.
