Despite recommendations of the Rangarajan Committee and the Prime Minister's Reconstruction package, much of which is dedicated to power sector, non-transfer of two major projects to Jammu and Kashmir by the union power ministry has dashed all hopes of addressing the issue of acute power shortage and consequent drainage state's scarce revenue. The high level committee headed by renowned economist and Chairman of the Prime Minister's Economic Advisory Council Dr. C. Rangarajan had made recommendations for transfer of two power projects which would not only eliminate acute power crisis but also bring down the annual power purchase bill from Rs. 1700 crore to Rs.500 crore. The recommendations of the task force were also endorsed by one of the working groups of Prime Minister's roundtable conference. But on the ground, it failed to take off as its recommendations for the transfer of Dulhasti Project and the Bursar Storage Scheme to the state government met with failure. The failure has put a question mark on the overall exercise, involving 11 top economists and financial experts of the country. The panel was headed by ace economist Dr.C.Rangarajan and included among others Chairman of the Jammu and Kashmir Bank and Economic Advisor to the state government Dr. Haseeb Drabu. The recommendations of the task force were appreciated by the Prime Minister's working group on the Economic Development of Jammu and Kashmir. The group had sought speeding up the process for the transfer of the Dulhasti Hydroelectric Project and Bursar Storage Scheme to the state government. The recommendations had come when Dulhasti project was under construction and NHPC was seeking land at Budsar for the Bursar Storage Scheme, located 65 kilometers from Kishtwar town. Prime Minister Manmohan Singh inaugurated the Dulhasti project on April 26 this year and to state government's surprise, dedicated it to the "nation'. Subsequently, it was learnt that NHPC had declined to return the project to the state government on the grounds that "union power ministry was reluctant to pay the opportunity cost of the project.' The virtual rejection of the assessments made by the task force by the NHPC and the Union Power Ministry has raised questions over the ability of the panel of economists in making apt recommendations. The panel had called the proposal for the transfer of Dulhasti project a "candidate one'. Through their observations and calculations, they had concluded that transfer of Dulhasti project would give Jammu and Kashmir a new project with design energy of 1928 million units for 35 years at a levelised tariff of Rs 0.65 per kilowatt hour and with a net gain of Rs. 6804 crores at 10 percent discount rate. In sharp contrast to the stand taken by the NHPC, the panel of economists had said that NHPC would be happy to take an uncompetitive project with financing obligations off its balance sheet. In their observation, they had predicted that beneficiary states would not offer resistance for transfer of Dulhasti since they would get rid of their contractual obligations of purchasing Dulhasti power at a high price. The task force had recommended that the transfer of project would not only augment the power supply position of Jammu and Kashmir but also make power accessible to it at a low levelized tariff of 0.65 kilowatt hour. But the calculations and the observations of task force failed to impress the officials at the NHPC and the power ministry. The conclusion being drawn at the official level in Jammu and Kashmir is that the task force failed to take into account the concerns of the union government vis-