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India is blessed with immense amount of hydro-electric potential and ranks fifth in terms of exploitable hydro-potential on global scenario. As per assessment made by CEA, India is endowed with economically exploitable hydro-power potential to the tune of 148,700 MW of installed capacity.

In 1998, Government of India announced “Policy on Hydro Power Development” under which impetus is given to development of hydropower in the country. This was a welcome step toward effective utilization of our water resources in the direction of hydropower development. During October 2001, Central Electricity Authority (CEA) came out with a ranking study which prioritized and ranked the future executable projects. As per the study, 399 hydro schemes with an aggregate installed capacity of 106,910 MW were ranked in A, B, and C categories depending upon their inter se attractiveness. During May 2003, Government of India launched 50,000-MW hydro initiative in which preparation of Pre-Feasibility Reports of 162 Projects totaling to 50,000 MW was taken up by CEA through various agencies. The PFRs for all these projects have already been prepared and projects with low tariff (first year tariff less than Rs.2.50/kWh) have been identified for preparation of DPR.