Since it was dedicated to the nation by the Prime Minister on 17 September 2017, the Sardar Sarovar Dam has remained synonymous with incomplete rehabilitation of the people displaced by the project. Now, it faces fresh controversy.
A recent so-called "one-time settlement" between Gujarat, Madhya Pradesh, Maharashtra, and Rajasthan—brokered by the Union Home Minister and the Union Minister for Jal Shakti—raises serious questions about whether the costs of displacement, rehabilitation, submerged forests and public lands, and other project-related liabilities have effectively been written off in the name of a financial settlement.
The official agreement has not yet been made public. Meanwhile, contradictory reports have appeared in the media. Transparency is therefore essential. The full text of the settlement must be released so that the public can determine whether Madhya Pradesh's statutory claims—and the rehabilitation rights of thousands of displaced families—have been compromised.
When the Sardar Sarovar Dam's height was limited to 90 metres in 2000, the Government of Madhya Pradesh sought compensation of ₹281.46 crore for project-related losses. Since then, the dam's height has been successively increased to 110 metres, 121.92 metres, and finally to 138.68 metres in 2017. With each increase, the submergence zone in Madhya Pradesh expanded significantly. By 2019, 192 villages and one town had been declared fully or partially affected.
However, in 2023, revised backwater level calculations rendered thousands of affected families ineligible for rehabilitation, placing their homes, livelihoods, and future in jeopardy.
Based on a reassessment using 2019–20 values, Madhya Pradesh revised its compensation claim to ₹7,669 crore. The revised estimate accounted for the expanded submergence area, forest land, government land, natural resources, and updated project costs. This claim was formally submitted to the Gujarat government on 10 February 2022.
Nearly two years later, on 21 March 2024, Gujarat made its position clear: it would consider only the original claim of ₹281.46 crore and reject the revised claim of ₹7,669 crore.
Madhya Pradesh rejected this stance, arguing that it ignored the actual extent of losses and violated the state's statutory rights. The dispute continued to be discussed in meetings of the Narmada Control Authority.
The Narmada Water Disputes Tribunal (NWDT) Award explicitly requires compensation for submerged forest and government land, acquisition costs, full rehabilitation expenses, and protection of the legal rights of affected states as integral components of the project.
The Supreme Court, in a series of judgments since 2000, has consistently held that rehabilitation is a precondition—not a consequence—of the project. During hearings in 2003, the then Attorney General also stated before the Court that Gujarat would bear the entire cost of land acquisition and rehabilitation. This obligation is therefore not merely administrative; it is a binding legal commitment.
Yet even today, thousands of families in Madhya Pradesh continue to await complete rehabilitation. Many have not received alternative agricultural land, residential plots, legal registration of allotted land, housing grants, basic infrastructure at resettlement sites, or sustainable livelihood support.
To complete these pending obligations, the Madhya Pradesh government sought an additional ₹2,900 crore from Gujarat. Several rounds of discussions were held among senior officials of Madhya Pradesh, Maharashtra, and Gujarat, and a joint inspection by a mediation committee was also conducted.
Initial media reports suggested that Gujarat would pay approximately ₹10,000 crore to Madhya Pradesh. Later, on 6 June 2026, reports indicated that the amount had been revised to ₹7,388 crore, with the settlement expected to be finalized by 30 June.
Subsequent developments completely reversed this narrative.
Following a meeting in Delhi attended by the Union Home Minister, the Union Minister for Jal Shakti, and the Chief Ministers of Madhya Pradesh, Gujarat, Maharashtra, and Rajasthan, a "one-time settlement" was announced. According to reports, instead of Gujarat compensating Madhya Pradesh, Madhya Pradesh itself would pay approximately ₹550 crore to Gujarat. Maharashtra would also pay around ₹27 crore.
If this indeed represents the final settlement, it inevitably raises profound questions.
It is being argued that these payments relate to a revised sharing of the overall project cost among the participating states. But even this explanation demands scrutiny.
The project's estimated cost was approximately ₹4,200 crore in 1983 and around ₹6,400 crore when approved by the Planning Commission in 1988. Subsequently, the Gujarat government placed the cost at more than ₹75,000 crore. Former Gujarat Chief Minister and water expert Suresh Mehta has estimated that the final cost may have reached nearly ₹90,000 crore, although there remains little clarity regarding which expenditures have been included in the final accounting.
For years, allegations have persisted that portions of the expenditure on the Statue of Unity, tourism infrastructure, and related development works have also been folded into the project's cost calculations. These claims deserve independent verification.
If the settlement has indeed extinguished Madhya Pradesh's ₹7,669-crore claim, the consequences would be far-reaching.
First, the state would receive no compensation for submerged forest land, government land, and natural resources.
Second, without the additional ₹2,900 crore sought for rehabilitation, the rehabilitation of thousands of displaced families may remain incomplete for years.
Third, Madhya Pradesh may have to finance these obligations from its own resources, placing additional pressure on other development priorities.
Fourth, if a legally enforceable claim is abandoned through a negotiated settlement, it could weaken the rights of affected states in future inter-state river projects.
Fifth, such an outcome would send a troubling message: states that reap the benefits of large infrastructure projects can evade their rehabilitation and environmental obligations, while the social and ecological costs continue to be borne by the affected states.
Finally, thousands of Adivasis, Dalits, landless labourers, fisherfolk, boatmen, potters, and other traditional livelihood communities may be permanently denied the just rehabilitation promised to them.
Maharashtra has likewise claimed approximately ₹1,313 crore for 6,488 hectares of submerged forest land, ₹300 crore for pending rehabilitation works, and nearly ₹450 crore for losses arising from reduced power generation. There too, many tribal families continue to await rehabilitation.
The Government of Madhya Pradesh must now answer a series of straightforward questions.
Has the state's claim of ₹7,669 crore been withdrawn?
Has funding been secured for the pending ₹2,900 crore rehabilitation programme?
If not, from which financial source will the remaining rehabilitation be completed?
Have the provisions of the Narmada Award and the directions of the Supreme Court been fully complied with?
Over four decades of the Narmada Bachao Andolan's peaceful struggle, judicial intervention, and constitutional processes have secured rehabilitation for thousands of displaced families. Yet a substantial number continue to wait for justice.
If this "one-time settlement" fails to safeguard Madhya Pradesh's legitimate financial claims and ensure adequate resources for completing rehabilitation, it will represent a disservice not only to the state but also to the people who have already borne the greatest costs of the project.
The Government of Madhya Pradesh should therefore make the settlement public, place it before the State Assembly, and ensure that there is no compromise on the state's lawful claim of ₹7,669 crore, compensation for submerged forests and public resources, or the complete and equitable rehabilitation of thousands of displaced families still waiting for justice.
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*With Bargi Dam Displaced and Affected People's Association
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