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Category — GS Paper 2 ///Published — 2026-07-10 ///Exam — Both Prelims and Mains ///Tags — Narmada River, Sardar Sarovar Project, Cooperative Federalism ///Category — GS Paper 2 ///Published — 2026-07-10 ///Exam — Both Prelims and Mains ///Tags — Narmada River, Sardar Sarovar Project, Cooperative Federalism ///

News · GS Paper 2

States Resolve Decades-Old Sardar Sarovar Financial Disputes

In a landmark cooperative federalism development, four states—Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh—have signed a one-time settlement to resolve long-pending financial disputes over the Sardar Sarovar Project. Gujarat has increased its cost share from 50% to 75%, reducing Madhya Pradesh's burden, while addressing issues of cost-sharing, R&R expenditures, and interest on construction borrowings.

2026-07-10

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Key Facts

Agreement Signed By: Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh
Resolution Of: Decades-old financial disputes over cost-sharing of Sardar Sarovar and Indira Sagar projects
Gujarat's New Cost Share: 75% (increased from 50%)
Disputes Resolved: R&R expenditures, interest burden on construction-phase borrowings

Sardar Sarovar Project (SSP)

Location: Terminal gravity dam on Narmada River near Navagam, Gujarat
Nearby Landmark: Statue of Unity
Significance: Largest major dam planned on Narmada; one of world's largest concrete gravity dams by concrete volume
Vision: Idea proposed by Sardar Vallabhbhai Patel in 1946
Foundation Stone: Laid by PM Jawaharlal Nehru in 1961
Coverage: Four major states—Maharashtra, Madhya Pradesh, Gujarat, Rajasthan
Benefits: Critical irrigation, drinking water, hydropower; transformed arid/drought-prone regions in Rajasthan and Gujarat

Narmada Water Disputes Tribunal (NWDT)

Constituted: 1969 under Inter-State River Water Disputes Act, 1956
Final Award: 1979
Determined: Water and power-sharing arrangements among beneficiary states
Pending Issues: Land compensation, rehabilitation costs, shared infrastructure expenses (persisted for decades)

Narmada River

Classification: Largest river of Central India and Gujarat
Origin: Amarkantak Plateau, Madhya Pradesh
Outlet: Arabian Sea through Gulf of Khambhat (Cambay) in Gujarat
Length: 1,312 km
Flow Through: Madhya Pradesh, Maharashtra, Gujarat
Basin Area: Approximately 98,800 sq. km

Significance for Governance and Federalism

Cooperative Federalism: Demonstrates successful resolution of inter-state disputes through negotiation
Water Resource Management: Critical for agricultural productivity and drinking water supply
Regional Development: Transformed drought-prone regions, enhanced agricultural productivity and land values
Constitutional Framework: Operates under Inter-State River Water Disputes Act, 1956