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Economics • Indian EconomyEasy

What is the primary economic objective of promoting hydroelectric power generation in Arunachal Pradesh, given its immense river basins?

A. Exporting surplus clean energy to other Indian states and generating state revenue✓ Correct Answer
B. Powering large-scale submarine manufacturing plants
C. Eliminating the need for any agricultural activity
D. Producing crude petroleum for domestic refining

💡 Solution & Explanation

Arunachal Pradesh possesses nearly a third of India's hydro-electric potential, making the development of mega hydropower projects a cornerstone of the state's fiscal strategy to export clean energy to power-deficit regions across India and earn substantial royalty revenues. These projects attract massive capital investments and stimulate local service economies. However, planners must carefully balance energy ambitions with environmental impact assessments and local community resettlement. Hydropower royalties form a significant potential component of the state's non-tax revenue base.

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