Punjab Demands Rs 1.44 Lakh Crore Water Dues, Threatens Rajasthan with Legal Action

In a dramatic escalation of a decades-old conflict, the Punjab Government has issued a final demand notice to Rajasthan, demanding an astounding Rs 1.44 lakh crore in unpaid dues for river water supplied to the state. Rajasthan has been given a strict 30-day ultimatum to clear the colossal sum, failing which Punjab has warned of initiating legal proceedings. This move throws a long-simmering inter-state dispute into direct confrontation, setting the stage for a significant legal battle. At the heart of the dispute is a historical water-sharing agreement from 1920, the Shimla agreement, under which the erstwhile princely state of Bikaner (now part of Rajasthan) paid royalty for water from Punjab's rivers. Punjab alleges that these royalty payments ceased after the 1960 Indus Waters Treaty and has calculated the staggering Rs 1.44 lakh crore in compensation and interest for water used between 1961 and 2025. Rajasthan, however, has vehemently rejected the claim as 'unconstitutional,' arguing that the original agreement was with the British administration, not Punjab. With Punjab's Chief Secretary KAP Sinha confirming the government's intent to pursue the matter legally, the focus now shifts to the mechanisms for resolving inter-state water disputes, primarily through tribunals established under the Inter-State River Water Disputes Act, 1956. The 30-day deadline looms large, signaling a potential for protracted legal battles that could further strain inter-state relations and have significant financial implications for both states.