The Indus Water Treaty to control and govern water of six common rivers between India and Pakistan was signed in 1960. Under this, control over Indus, Jhelum and Chenab, all flowing through Jammu and Kashmir, has been given to Pakistan while control over Beas, Ravi and Sutlej, all flowing through Punjab, is with India. Today this treaty has become ‘loss-proposition’ for Jammu and Kashmir with the huge untapped hydroelectric potentials these rivers carry. Keeping the power shortage it is facing and to cover it the State has to import from Central pool. The treaty under which Pakistan has got control over all the major rivers of Jammu and Kashmir, has resulted in huge losses to the State and the extent is being assessed, the government had said recently. Even before the partition of India and Pakistan, the Indus posed problems between the states of British India. The problem became international only after partition, though, and the attendant increased hostility and lack of supra-legal authority only exacerbated the issue. Pakistani territory, which had relied on Indus water for centuries, now found the water sources originating in another country, one with whom geopolitical relations were increasing in hostility. Beside the power generation J and K’s agriculture potential has been badly hit by the treaty. The treaty which was carried out in the best interests of the nation has, however, deprived J and K of using its own water resources and thereby severely affecting development in the State. The treaty made Punjab prosperous by using the water of the eastern rivers for agriculture and power generation. This, however, put J and K behind by an estimated Rs 6,500 crore benefit. The losses are not there in the agriculture sector alone but on a much higher scale in the generation of hydropower which has an otherwise estimated potential of 20,000 MW. Under the treaty, J and K can use only limited waters of the Chenab and Jhelum for power generation and lift irrigation. It cannot build reservoirs or dams on these rivers without prior approval of Pakistan. Nor can it construct any barrage for irrigation. If the state had the freedom to harness its available water resources the area under crop cultivation too could have gone up and dependence on grain import would have been less. To cover up the losses to J and K a favourable sharing ratio for power generated from centrally funded projects in the State is needed.