Developers of hydroelectric power in India will have to contribute to a trust for developing the local area, said the country's Power Minister.

Sushil Kumar Shinde said that companies will set aside RS 0.01 (US$0.00022) per unit of power produced by a hydro project to the Local Area Development Trust, in a move that will apply to all states, including Arunchal Pradesh, Sikkim, Himachal Pradesh Uttaranchal and Jammu and Kashmir. Costs of hydro projects will go up as a result.

The decision will benefit states like Uttaranchal, Himachal Pradesh and the northeast of the country.

The scheme has already been incorporated in the MoUs signed recently by National Thermal Power Corporation (NTPC), National Hydroelectric Power Corporation (NHPC), and North Eastern Electric Power Corporation (NEEPCO).

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