Niti Aayog Asks Telangana To Verify And Approve Data Centres
NITI Aayog has urged Telangana to verify power, water, land and connectivity readiness before approving data-centre projects, linking incentives to measurable outcomes.
Telangana will have to verify power, water, land and connectivity readiness before clearing new data-centre projects, according to a data centre evaluation framework released by NITI Aayog’s Frontier Tech Hub.
The framework calls on states attracting large data-centre investments, including Telangana, to validate grid capacity, prepare long-term water balances, identify infrastructure-ready zones and link incentives to measurable outcomes.
The recommendations come against the backdrop of recent S&P Global reports highlighting a global infrastructure and energy boom driven by artificial intelligence (AI), along with growing risks to power grids and water resources.
NITI Aayog said data centres offered opportunities to attract investment and strengthen India’s AI economy, but their demand for electricity, water, land and supporting infrastructure required structured assessment. It advised states to focus on investment readiness, infrastructure quality and sustainable economic value rather than competing for investment announcements.
For Telangana, the framework called on developers, power distribution companies (discoms) and the state transmission utilities to jointly validate a power readiness and ramp-up plan. This should cover total campus demand, sanctioned megawatts, year-wise energisation, substation and transmission upgrades, lead times and responsibility for each upgrade.
It also recommended load-flow studies to assess feeder limits, voltage sag, power factor, contingency resilience, transformer loading and available transmission capacity at relevant substations.
The state has been asked to assess existing and committed power loads at proposed locations and corridors, identify long-term transmission constraints and publish a power-infrastructure roadmap with indicative energisation timelines.
For facilities exceeding 20 MW, the framework recommended automated demand-response readiness and integration with the state load dispatch centre’s telemetry and control systems, subject to grid-code requirements.
On water availability, the report advised Telangana to prepare a 20 or 30-year seasonal catchment water balance covering surface water, groundwater, municipal supply, treated wastewater and competing demand, particularly from agriculture.
The framework said water allocation for data centres should not reduce dependable supplies to existing users. Recycled or treated water should be included in project assessments only if it was contracted, connected and available when the facility is commissioned.
It recommended an agreement among water resources, urban local bodies, drinking-water, irrigation and industry authorities before project approval. The agreement should specify water allocation, protection of existing users, drought-related restrictions and responsibility for infrastructure.
NITI Aayog also recommended that states designate “data-centre-ready zones” after verifying land titles, permitted use, zoning, expansion capacity, grid connectivity, water availability and substation readiness.
Priority should be given to areas with renewable-energy availability and adequate connectivity. The assessment should also cover multiple fibre providers, carrier-neutral interconnection and physically separate connectivity routes.
The framework called on Telangana to publish corridor-level information on grid and transmission capacity, renewable-energy access, water, fibre connectivity, right of way, land availability and clearances, along with approval timelines and cost-sharing arrangements.
It also recommends identifying high-risk “red zones” where exposure to hazards, water stress or land-use conflicts could restrict data-centre development.
On incentives, NITI Aayog advised the state to release support only after developers met defined milestones relating to commissioning, renewable-energy supply, employment, procurement and capability development.
The framework recommended a time-bound digital single-window clearance mechanism and a state data centre approval matrix specifying each approval, the issuing authority, processing time, required documents, fees and escalation officer.
It also called for a nodal agency to coordinate approvals and a public tracking mechanism covering approved power loads, water use, safeguards, incentives and grievance channels.
The proposed measures were intended to link data-centre approvals and incentives to verified infrastructure readiness and measurable project outcomes.
