Punjab has stepped up its long-running water dispute with Rajasthan, demanding ₹1.44 lakh crore in alleged outstanding water royalty for river water supplied for irrigation and drinking purposes. The demand covers the period from 1961 to 2025 and includes interest. Punjab has warned that Rajasthan could face legal action if the amount is not paid.
But the figure is Punjab government's claim and not an amount accepted by Rajasthan or established by a court. Rajasthan has questioned the legal basis of the demand, making the issue more than just a dispute over unpaid bills.
Where does the dispute come from?
The roots of the controversy go back more than a century.
On September 4, 1920, an agreement was signed in Shimla involving the then Punjab, the princely state of Bikaner and Bahawalpur. The arrangement concerned the supply and use of water from the river system for irrigation in areas that included Bikaner.
Under the arrangement, Bikaner was reportedly charged ₹6.50 per acre per year for the water supplied through Punjab's rivers. Punjab's present-day argument is that Rajasthan continued to benefit from the water and canal network even after the original royalty payments stopped.
According to Punjab, royalty was paid until the signing of the Indus Waters Treaty in 1960. The state is now seeking payment for the subsequent period.
How did Punjab arrive at ₹1.44 lakh crore?
Punjab says it has recalculated the amount using the applicable present-day rate.
The state's calculation reportedly uses a rate of ₹141.20 per acre per annum, an average annual water use of around 10 million acre-feet, and 8 per cent interest. Based on this calculation, Punjab has put the outstanding amount at around ₹1,44,083 crore for 1961-2025.
The government has already written to Rajasthan over the matter. Letters were sent on March 18 and May 4, but Punjab says it did not receive a satisfactory response.
Punjab has now given Rajasthan a 30-day deadline to respond to the demand. Water Resources Minister Barinder Kumar Goyal has said that if Rajasthan does not pay, the state will pursue legal action according to the applicable rules.
Why is Rajasthan refusing?
This is where the dispute could eventually move from government correspondence to the courts.
Rajasthan has rejected Punjab's demand and questioned whether the 1920 agreement can be used as the basis for imposing royalty today.
Rajasthan's argument is that the agreement belonged to the colonial-era arrangement involving princely states and cannot automatically be treated as a continuing legal obligation after Independence.
Therefore, the disagreement is essentially over the legal status of the old agreement and whether subsequent interstate water arrangements replaced or altered the financial obligations associated with it.
In simple terms, Punjab says Rajasthan has been receiving water without paying the royalty it believes is due, while Rajasthan disputes Punjab's right to impose such a charge.
Why has the issue resurfaced now?
Punjab Chief Minister Bhagwant Mann had announced in March that his government would pursue recovery of unpaid water royalty from Rajasthan.
The latest notice represents an escalation of that position, with Punjab now putting a specific figure on the claim and warning of possible legal proceedings.
The dispute also comes against the backdrop of Punjab's broader concerns over its river waters and its long-standing disagreements with neighbouring states over water sharing and canal systems.
Punjab also has dues-related demands from Haryana
Rajasthan is not the only neighbouring state from which Punjab is seeking payment.
Punjab has separately raised a demand of ₹312.59 crore from Haryana for the operation and maintenance of common carrier channels associated with the Bhakra canal system.
The amount includes ₹281.78 crore from the Bhakra Main Line Division in Patiala and ₹30.80 crore from the Mansa Division. Punjab says the maintenance payments have remained pending since 2015-16.
The Bhakra Canal has an allocation of 12,455 cusecs, with Haryana having the largest share at 63 per cent, followed by Punjab with 25 per cent, Rajasthan 7 per cent, Delhi 4 per cent and Chandigarh 1 per cent.
Unlike the Rajasthan royalty dispute, the Haryana demand relates primarily to expenses associated with the operation and maintenance of common canal infrastructure.
What happens next?
The immediate question is whether Rajasthan responds to Punjab's latest notice within the stipulated period.
If no settlement is reached, Punjab has indicated that it could pursue legal remedies. That could turn a decades-old water-sharing disagreement into a significant interstate legal battle.
For now, ₹1.44 lakh crore remains Punjab's claimed amount, not a settled liability against Rajasthan. The eventual outcome will depend on the legal validity of the agreements being cited, subsequent water-sharing arrangements and how the two states' competing claims are interpreted.
What began with a 1920 water-sharing arrangement has therefore evolved into a dispute involving river rights, canal infrastructure, historical agreements and a claimed financial liability running into more than ₹1.4 lakh crore.
