In 2011, Taj Mohi-u-Din, who as then Jammu and Kashmir's minister of irrigation, accused India’s National Hydro-electric Power Corporation of treating the state like the British East India Company treated India. Since then, the issue has become more politically salient, with Kashmiris now regularly complaining about the “hijacking” of their water resources.

Kashmiris believe that the National Hydro-electric Power Corporation, which generates over 2,000 MW of energy from Kashmir, is only interested in generating profits while depriving the state of the benefits of its most important economic asset – its water resources. This perception was only bolstered when a recent Right To Information application led to the revelation that National Hydro-electric Power Corporation had earned Rs 19,442 crore ($2,922 million) in the past 14 years from electricity sales. To add insult to injury, Jammu and Kashmir was the second-largest buyer of electricity produced in its own territory.

The state owns power projects that generate only 761 MW while peak consumption in the state reaches 2,800 MW of energy. When the Peoples Democratic Party was in opposition in 2009, chief spokesman Muzaffar Hussain Baig had put forward a private member bill seeking to re-negotiate a deal with National Hydro-electric Power Corporation. This bill – like most private members’ bills – was rejected, despite the fact that many National Conference leaders had supported it.

Baig, a prominent legal expert and former finance minister of the state, had accused New Delhi of making a deal with Pakistan arbitrarily on behalf of Jammu and Kashmir despite water being a state, not a central, subject. (Under the Indian Constitution, states have primacy over some issues, while the central government has primacy over others.) According to Baig, if the state was able to harness its own water resources, it would earn an annual revenue of Rs 720 billion by exploiting only one-third of its potential. But, according to Baig, New Delhi was not willing to give counter guarantees to foreign investors who were ready to invest in Kashmir.

The former executive director of projects at the State Power Development Corporation, Zahoor Ahmad Chat, agrees with Baig. He said that harnessing the hydropower potential of the state could earn Jammu and Kashmir an additional annual revenue of about Rs 150 billion from the export of surplus power, even after meeting the state's own power requirements.

Attacking the Indus Waters Treaty

Kashmiris also blame the World Bank-mediated 1960 Indus Waters Treaty between India and Pakistan which, according to them, has completely disregarded the economic interests of Kashmiris. The treaty is a mechanism for regulating the flow of the trans-boundary Indus River and its five tributaries – Jhelum, Chenab, Ravi, Beas and Sutlej – between India and Pakistan.

Under the treaty, Pakistan received exclusive use of waters from the Indus and its westward flowing tributaries of the Jhelum and Chenab, while the Ravi, Beas and Sutlej rivers were allocated for India’s use. Experts, civil society, political parties and chambers of industries and commerce unanimously decry the treaty, and its effects on Kashmir’s economy. The rivers that Pakistan has rights over are all the ones that flow through Kashmir.

Antagonism in the Assembly

Following subdued disapproval for the Indus Waters Treaty, Kashmiris formally started opposing the division of their water resources between India and Pakistan in 2002 with the Jammu and Kashmir legislative Assembly passing a resolution to seek the termination of this treaty. Since then, the Indus Waters Treaty has become a regular feature of debates and discussions in the state assembly.

In 2009, during a debate in the Assembly, National Conference politician Nazir Gurezi termed the treaty “a sign of slavery” for Kashmiris, while another leader of the party, Mir Saifullah said that the signing of this treaty marked the beginning of human rights abuses in Jammu and Kashmir. While the Indus Waters Treaty was signed in 1960, Saifullah was drawing a parallel between it and the many accusations of human rights abuse during the long-running armed insurgency in Jammu and Kashmir, which began in 1989.

Losses and the compensation

In almost every Assembly session, the issue of losses to the state due to Indus Waters Treaty is highlighted by members of the National Conference and the Peoples Democratic Party, as well as other parties. In the ongoing budget session of the Assembly, which started on May 25, legislators like Mohammad Yousuf Tarigami and Ali Mohammad Sagar raised the treaty issue and were supported by most of the members.

Having realised that the termination of the treaty is not legally possible, the legislators, irrespective of party affiliation, now demand that the losses to Jammu and Kashmir due to the Indus Waters Treaty should be quantified so that compensation of these losses is sought from New Delhi.

In its response, the government said that it has started the process of quantifying the losses and fresh tenders will soon be announced for international consultation firms to bid for taking up the assignment. “We are hopeful about the compensation,” the government said. Earlier, the British firm M/S Halcrow Group, which was shortlisted for quantifying the losses, had retracted its bid, because the validity for the project had expired.

Transfer of power projects

In March, Jammu and Kashmir's first woman chief minister, Mehbooba Mufti of the Peoples Democratic Party, came to power after the death of her father, Mufti Mohammad Sayeed. He had been the chief minister of J&K until then. In the period after her father’s death she was involved in long negotiations with the Peoples Democratic Party ’s coalition partner, the Bharatiya Janata Party, which also leads the ruling coalition in India’s central government. She was purportedly reassured by the BJP that the 390 MW Dul Hasti and 480 MW Uri-I power projects would be transferred to the state government.

Earlier, her father had negotiated an Agenda of Alliance, in which the Peoples Democratic Party and the BJP had agreed that the state government and the Union government would explore ways to transfer the power projects. But, until the time of his death, no headway was made.

The Agenda of Alliance also promises that the Jammu and Kashmir government will secure a share in the profits earned by National Hydro-electric Power Corporation by exploiting Kashmir’s water resources and will also revise all royalty agreements – currently the state gets only 12% royalty.

None of these points in the Agenda of Alliance have received any serious attention so far.

Chat says that the return of National Hydro-electric Power Corporation-constructed projects back to Jammu and Kashmir was the main ingredient enshrined in the original memorandums of understanding with the National Hydro-electric Power Corporation, “but now they are backtracking by bullying us as big brothers and super masters.” According to him, it would be a miracle if the projects are returned.

His concerns are not ill-founded. Just a few weeks after Mufti took charge as chief minister, the Minister of State for Power, Coal, New and Renewable Energy, Piyush Goyal, said that power projects could not be returned to Jammu and Kashmir because of legal and financial problems. He also declined to raise the royalty of Jammu and Kashmir to a proposed 25% saying all other states receive 12%.

This created confusion among the legislators, especially those in the opposition who accused the Jammu and Kashmir government of hoodwinking the people. “Please tell the truth to the people that you can’t get these power projects back," said National Conference legislator, Mian Altaf, during a recent debate in the Assembly. "Why you are misleading them and making false promises to them?”

Whatever happens with the power projects, though, it seems that the politics of water will continue to roil Jammu and Kashmir for some time to come.

This article first appeared on The Third Pole.