Indo – Bhutan Hydropower Cooperation

Context:

India has been consistently supporting Bhutan in all aspects but has also supported significantly in the hydropower sector in the form of grants and technical aid.
Recent visit of India’s External Affairs Minister to Bhutan has given room to discussion on the bilateral ties.

The hydropower sector has been one of the important aspects in Indo Bhutan cooperation.
The Jaldhaka Project which was initiated in the year 1961 has been followed by numerous other agreements in the hydro power segment.
In one of the earlier protocols signed, India has committed to install 10.000MW by the year 2020.
Unfortunately there are some persisting issues which have come as hindrance I implementation of the hydropower projects.

Hydropower has been very important in Bhutan’s economic growth and has helped in its population attaining prosperity.
Amidst this there are growing concerns on its economic viability due to the steep rise in its public debt.
It has been estimated that out of Bhutan’s total external debt, 76% of it is due to the hydropower projects.
India has played a huge role in supporting Bhutan’s hydropower projects financially but recent changes in its financial mechanisms has been a bone of contention.
India from a 60:40 model has changed it to 30:70 ratio comprising of 30% grants and 70% from commercial debt.
Further due to delay in commissioning the projects the cost has been overshot by many folds.

It is a matter of fact that the hydropower projects are labour intensive and has the potential to employ huge populations.
But the contention here is that the hydropower projects are not employing the local population and this has led to jobless growth.
The major reason being easy accessibility of both skilled and non-skilled workers, especially from India at lower labour costs.

Bhutan which has adopted a model of Gross National Happiness stresses upon overall development, not just in economic sense.
The environmental and other social aspects needs to be kept in mind before going ahead of any new hydropower projects.
India which is seen as an all weather friend will paly an important role in Bhutan.

Source The Hindu

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