Study OAS · 08 July 2026

Four States Settle Narmada Project Payment Dispute

What’s the News?

Madhya Pradesh, Gujarat, Rajasthan and Maharashtra signed an agreement in New Delhi to settle long-pending payment disputes linked to Narmada Award projects. The pact resolves issues related to cost-sharing for the Sardar Sarovar Project, pending dues, rehabilitation expenditure, compensation for submerged land, and interest burden on construction borrowings. The agreement was signed in the presence of Union Home Minister Amit Shah and Union Jal Shakti Minister C. R. Patil.

Narmada Payment Pact

• The pact covers beneficiary states under the Narmada Water Disputes Tribunal Award.
• It provides a one-time settlement mechanism for pending dues among the states.
• Major issues resolved:
  • Cost-sharing for Sardar Sarovar Project.
  • Issues linked to Indira Sagar Project.
  • Resettlement & Rehabilitation expenditure.
  • Compensation for submerged land.
  • Interest on borrowings during project construction.
• Maharashtra CM Devendra Fadnavis stated that claims of around ₹2,000–₹3,000 crore against Maharashtra were waived, while the state would pay ₹27 crore.

Narmada Water Disputes Tribunal

• Constituted under the Inter-State Water Disputes Act, 1956.
• Set up to adjudicate disputes over sharing of Narmada waters and related project obligations.
• The Award allocated the utilisable waters of the Narmada among:
  • Madhya Pradesh
  • Gujarat
  • Rajasthan
  • Maharashtra
• It also determined shares in power generated from the Navagam Canal Head Power House and River Bed Power House.

Additional Info

• Narmada River
  • Major west-flowing river of India.
  • Flows through central and western India.
  • Drains into the Arabian Sea.
  • Associated with major multipurpose projects for irrigation, drinking water and hydropower.
• Sardar Sarovar Project
  • Located on the Narmada River in Gujarat.
  • Multipurpose project involving irrigation, drinking water supply and hydropower.
  • Beneficiary states include Gujarat, Madhya Pradesh, Rajasthan and Maharashtra.
• Indira Sagar Project
  • Located on the Narmada River in Madhya Pradesh.
  • Important reservoir and hydropower project.
  • Linked with inter-state cost-sharing and rehabilitation obligations.
• Constitutional Link
  • Article 262: Parliament may provide for adjudication of inter-state river water disputes.
  • Parliament may also exclude jurisdiction of the Supreme Court or other courts in such disputes.
  • Inter-State Water Disputes Act, 1956 operationalises this constitutional provision.

Sources

• Indian Express
• Hindustan Times