The power ministry is framing guidelines for the implementation of local area development fund (LADF) to ensure state governments pass on the intended monetary benefits to people affected by hydel projects.
The Centre’s revenue from the sale of 1% free power to discoms goes to the LADF. (The government doesn’t pay hydel stations for power given free to project-affected people, it is, in fact, entitled to get its entire share ? 12% ? of power procured from the hydel stations free of cost).
The LADF policy has been in place since 2006 and applicable to both public sector and private hydel projects. However, many hydro-rich states have still not laid down guidelines for the use of the LADF and as a consequence, the money does not reach the intended beneficiaries.
Sources said the power ministry has sought comments from hydro-producing states for finalising the guidelines. ?We are awaiting state governments’ feedback on draft guidelines for use of LADF,? a senior power ministry official told FE.
Sources said the ministry’s draft document on the utilisation of LADF funds has generously drawn from guidelines outlined by Himachal Pradesh in 2011 and amended in 2013. To manage the fund, the state has set up a local area development authority ( LADA) and cash is directly transferred to each family. While 50% of the fund is divided equally between all families in the project affected area, the balance 50% is distributed in the ratio of land acquired from families.
The state’s directorate of energy, which gets the receipts of the free power sale, transfers the cash to the LADA headed by respective deputy commissioners, who further disburses the cash to registered families.
The LADF was mooted by the Centre to make local people stakeholders and secure their cooperation to ensure smooth implementation of hydel projects that cause widespread displacement of local population.