CHANDIGARH – Escalating its efforts to recover long-standing financial dues from neighboring states, the Punjab government has formally moved to recover ₹973.44 crore from Jammu and Kashmir. The claim pertains to the construction costs of the Ranjit Sagar Dam and the Shahpur Kandi Dam projects.
The Water Resources Department has sent a formal communication to the Jal Shakti Department of Jammu and Kashmir, requesting an immediate high-level meeting to resolve the outstanding liabilities.
The Financial Breakdown
The total demand of ₹973 crore is split across two major infrastructure projects on the Ravi River, governed by a bilateral agreement signed nearly five decades ago.
1. Ranjit Sagar (Thein) Dam: ₹301.02 Crore
Under the terms of a January 20, 1979, agreement, Jammu and Kashmir was obligated to contribute 10% of the total cost of the irrigation component of the project.
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Principal Amount: ₹65.61 crore (10% of the ₹656.13 crore irrigation component).
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Interest Accrued: ₹235.41 crore (calculated from April 1, 2002, to February 28, 2026).
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Total Project Cost: The dam was constructed at a total cost of ₹5,755.54 crore.
2. Shahpur Kandi Dam: ₹672.42 Crore
The dispute here centres on the diversion of the Ravi canal and the construction of the barrage.
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Escalation Costs: While J&K submitted an estimate of ₹410.29 crore based on 2011 prices, Punjab has applied a 6% annual cost escalation, bringing the figure to ₹777.58 crore as of early 2026.
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Current Liability: After accounting for work already executed and prior expenditures, Punjab has pinned J&K’s remaining liability at ₹672.42 crore.
Strategic Timing and Regional Context
This financial demand follows a recent, high-profile move by Chief Minister Bhagwant Mann, who demanded water royalty arrears fromRajasthan. By strictly enforcing the 1979 bilateral terms, the Punjab government is signalling a shift toward more aggressive fiscal management of its water resources.
“The accounts have been meticulously drawn by the Financial Advisor and Chief Accounting Officer. We seek an early resolution to ensure that the costs incurred by Punjab taxpayers are reimbursed as per the sovereign agreements between the two regions,”a senior official from the Water Resources Department stated.
The Road Ahead
The resolution of this matter is critical as the Shahpur Kandi Dam recently reached a milestone in its completion, aimed at stopping the flow of India’s share of Ravi water into Pakistan. While Punjab seeks construction costs, J&K has historically raised counter-claims regarding its 20% share of powerand land compensation for displaced families in the Kathua district.
A meeting between the officials of both regions is expected later this month to deliberate on the interest calculations and the validation of the 6% escalation clause.
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