The government may approve a compensation of INR 600 crore for NTPC's Loharinag Pala hydel project in Uttarakhand which got scrapped last year over environment and religious issues.

Sources said that the Cabinet Committee on Economic Affairs is likely to take up the issue of granting compensation to the state run power utility for expenditure incurred on the 600 MW hydel project in Uttarakhand.

NTPC has incurred about INR 600 crore on the project which was scrapped in August last year. The project was scrapped due to objections from various Hindu sections as it was to be built on the Ganges river. It was also opposed by certain environment activists who felt it would adversely impact the environment.

According to sources, the CCEA is also likely to give directions to state run National Aluminum Company on the scope of value addition for export of aluminum rather than alumina in its second phase of expansion. It may also approve mandatory use of jute for packaging in 2011 to 2012 besides approving revised cost estimate for Assam Gas Cracker Project and the North East Rural Livelihood project.

That apart, the CCEA is likely to decide on augmenting the existing outlay of the Prime Minister Employment Generation Program for meeting remaining liabilities of erstwhile Prime Minister Mr Rozgar Yojana and Rural Employment Generation Program Scheme.

(Sourced from Economic Times)