Economics • Indian EconomyMedium
How do hydroelectric power projects in Sikkim contribute to the state's fiscal framework and revenue generation?
A. Through free power allocations to the state government, royalty revenues, and power purchase agreements✓ Correct Answer
B. By eliminating all state tax collection responsibilities
C. By offering direct cash subsidies to international energy traders
D. By restricting electricity consumption exclusively to industrial units
💡 Solution & Explanation
Run-of-the-river hydroelectric projects in Sikkim generate significant non-tax revenue through statutory free power shares, royalty payments, and commercial sale of surplus electricity to the national grid. Free power allocations bolster state fiscal capacity. Environmental safeguards must accompany these energy ventures to ensure sustainable resource utilization.
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