BBMB share dispute: Punjab very close to amicable settlement, Centre to SC

The Central government has informed the Supreme Court that the Punjab government is nearing agreement on a proposed resolution to resolve the long-standing dispute over payments owed to Himachal Pradesh under the Bhakra Beas Management Board (BBMB) projects dating back to 1966. According to legal representatives appearing before the court, the Centre’s proposal for a cashless settlement, based on an energy-based calculation rather than monetary compensation, is gaining traction. The apex court has scheduled further hearings for August 20 to determine whether the Punjab government will accept the proposal. The dispute centers on the allocation of shares in the BBMB projects, which were established under the Punjab Reorganisation Act of 1966. Himachal Pradesh, the origin of the Beas River, claims entitlement to 7.19 percent of the power generated from these projects. However, Punjab and Haryana have historically failed to meet their financial obligations, leaving Himachal Pradesh with an accumulated debt of approximately 13,066 million units of electricity. The Centre has proposed that instead of direct monetary payments, Punjab and Haryana compensate Himachal Pradesh using energy credits, effectively transferring the arrears as electricity units. In a recent hearing, Attorney General R Venkataramani, representing the Centre, stated that the Punjab government is “coming very close” to accepting the proposal. He emphasized that the court could finalize the matter within days if the state agrees. Senior advocate Kapil Sibal, representing Himachal Pradesh, noted that the state is prepared to proceed with the settlement once the Punjab government confirms its acceptance. Meanwhile, the Punjab government has raised concerns over the proposed rate of ₹2.5 per unit of electricity, arguing that this figure is excessively high and could result in a financial loss of around ₹2,000 crore. The Punjab government’s representative, senior advocate Nidesh Gupta, has contended that the current pricing mechanism fails to account for inflation and operational costs. He urged the court to consider a more equitable rate that reflects the actual value of the electricity being transferred. In response, the court warned that if Punjab refuses to engage in an amicable resolution, it would proceed to evaluate the matter on its merits and issue binding orders. This underscores the growing pressure on Punjab to align with the Centre’s proposal, particularly given the court’s repeated emphasis on resolving disputes through judicial intervention. The dispute traces its origins to a landmark ruling issued by the Supreme Court in 2011, which allocated specific shares to each state based on historical agreements. At that time, Himachal Pradesh was granted 7.19 percent, while Punjab received 51.80 percent and Haryana 37.51 percent. Rajasthan’s share remained largely unchanged, and the Union Territory of Chandigarh was assigned 3.50 percent. Despite this legal clarity, the implementation of the settlement has been delayed due to conflicting interpretations and administrative challenges. Himachal Pradesh initiated the legal battle in 1996, asserting its right to the share of the BBMB projects as a successor state. After years of unsuccessful negotiations, the Supreme Court intervened and issued its final judgment in 2011. Since then, efforts to implement the ruling have faced resistance, primarily from Punjab, which has consistently questioned the validity of the court’s order. The current proposal aims to address these lingering disputes by offering a structured, non-monetary resolution that aligns with the court’s earlier directives. Meanwhile, separate developments highlight the broader political landscape. Punjab farmers, through the Kisan Vidhan Sabha, have called for a meeting with the Centre to discuss the implications of the E20 policy, which mandates that all vehicles run on a blend of 20% ethanol. Farmers fear that the shift to ethanol-blended fuels could negatively impact agricultural incomes, prompting them to seek assurances from the government. This adds another layer of complexity to the state’s ongoing engagement with national policies and economic reforms.