According to a Bill that had been passed in the Legislative Assembly of Jammu & Kashmir the state will tax water that will be used to generate electricity for the state

Taj Mohi-ud-Din, the irrigation minister stated that even if only twenty five paisa is levied for every cubic meter of water entering the power plant the state can witness an earning in the tune of eight hundred and fifty crores of rupees annually.

He stated that NHPC earns in the tune of seven thousand one hundred and forty crores of rupees from its operation in Jammu & Kashmir

Taj further stated that states should control the water resources as the government is responsible for ensuring safety to the lives and properties of the residents of the state.

He went on to say that under the J&K Water Resources (Regulation and Management) Bill, 2010, the state will control drainage, water supply, irrigation and improvement in the flow of water. It will also control management of dams and flood protection.

Although all the water users will be under the governments supervision under the Bill but it was mainly designed to make the national hydro power utility, NHPC Ltd pay for the water it uses up for generating electricity.

With the Bill passed into legislation Jammu & Kashmir became the first state of the country to levy tax on water used for generating electricity. No other state has ever done that.

J&K will not only make NHPC pay but it also will ask the state-owned JKPDC, or Jammu &Kashmir Power Development Corporation to pay for the water it uses to produce power.

The bill was passed as the thirteenth finance commission had put a condition that without such authority states can’t spend from the grant it had recommended.