SRINAGAR: The Government of Jammu and Kashmir has confirmed that Rs 32 crore accrued under the Local Area Development Fund (LADF) from the Sewa-II Hydroelectric Project in Kathua has not been spent on local development works, despite the project being operational since 2010.
The disclosure came in response to an unstarred question by Darshan Kumar in the Legislative Assembly, seeking details on LADF contributions and their utilisation in project-affected areas, particularly in the Basohli constituency.
As per Government Order No. 132-PDD of 2014, all hydropower projects commissioned after 2008 are required to contribute 1 percent of the monetised value of free power towards LADF. Additionally, the government is to provide a matching development grant. The Union Territory also receives a 12 percent allocation of free power from NHPC Limited, which, along with LADF contributions, is intended to support both local development and energy needs.
However, the government stated that no expenditure has been incurred under the LADF head for local area development in Kathua so far. Instead, the funds have been utilised to meet power purchase costs, ensuring the availability of electricity to consumers at reasonable tariffs across the Union Territory.
“1 percent contribution towards LADF, along with 12 percent free power from NHPC, is being used to meet power purchase costs of the Union Territory,” the reply noted.
Official data indicates that the total Rs 32 crore was contributed between 2010 and February 2026, with year-wise accruals ranging from Rs 0.26 crore to Rs 3.22 crore. A one-time settlement of Rs 8.33 crore was also made for the period 2010–14.
On the question of why no funds have been released for development works in project-affected areas, the government said that infrastructure projects in the region are being undertaken under the CAPEX budget, implemented by various departments.
Regarding future plans, the government stated that it is reviewing the mechanism for release and operationalisation of LADF funds in line with the 2014 order. It added that additional development works may be identified for villages affected by the Sewa-II project in Basohli, if required.
