In a move that will significantly boost hydel power infrastructure in hill states like Himachal Pradesh and Uttarakhand and northern regions, including Jammu and Kashmir, Punjab and Haryana, the Union Cabinet on Wednesday approved the ‘Small Hydro Power (SHP) Development Scheme’ for a period between 2026-27 and 2030-31, with an outlay of Rs 2,585 crore.The scheme will help in the installation of SHP projects of an approximate capacity of 1,500 MW and support small hydro projects (with a capacity of 1-25 MW) to come up in different states, and especially benefit hilly and northeastern states with high potential for such projects.In the North-East states and districts with international borders, a central financial assistance to the tune of Rs 3.6 crore per MW or 30 percent of the project cost (whichever is lower with an upper limit of Rs 30 crore per project) will also be available, said official sources.Will create jobs in rural areas: PM“The scheme will boost clean energy, attract investments and create employment across rural and remote regions. The North-East, in particular, will gain significantly from the scheme.” – Narendra Modi, PMIn other states like Punjab, Himachal Pradesh, Haryana and Uttarakhand, central assistance worth Rs 2.4 crore per MW or 20 percent of project cost, whichever is lower with a cap of Rs 20 crore per project, would be available.“This will help in tapping the small hydro potential in remote and difficult to reach locations. An amount of Rs 2,532 crore has been earmarked for such projects. This is likely to bring in Rs 15,000 crore of investment in the small hydro sector, giving a boost to the clean energy initiative, investment in remote and rural areas and creating significant employment opportunities. The investment will also leverage 100 per cent of the plant and machinery from indigenous sources,” an official statement said.The scheme will further incentivise states to prepare detailed project reports (DPRs) for about 200 projects to create a pipeline of small hydro projects in future. An amount of Rs 30 crore has been kept to support state and the Central Government agencies to prepare such DPRs.The scheme will support 51 lakh person days of employment during the project construction and enable employment in maintenance and operation of these SHPs, which will come up in largely rural and remote locations.Being decentralised in nature, the requirement of a long transmission line would also be minimal for SHP projects, which would reduce the transmission losses, official sources added.