# NITI Aayog Framework Asks States to Assess Power, Water and Land Before Data Centre Approvals > NITI Aayog released a framework requiring states to assess power, water, land and connectivity before approving data centre projects. - Published: 2026-10-21T12:56:14+00:00 - Section: Regulation & Approvals - Author: News Desk - URL: https://newsforagent.com/news/2026-10-21/niti-aayog-data-centre-approval-framework - Source: [Construction World](https://www.constructionworld.in/policy-updates-and-economic-news/niti-aayog-framework-sets-data-centre-approval-conditions/99101) ## Key takeaways - NITI Aayog released a framework asking states to assess power, water, land, environmental sustainability, economic benefits and connectivity before approving data centre projects. - Facilities above 20 MW should be ready for automated demand response and integration with State Load Despatch Centre systems, subject to grid-code requirements. - The framework calls for a 20-30-year seasonal assessment of water resources and verification of renewable-energy and battery-storage arrangements before they count towards lower grid consumption. [NITI](https://akta.pro/company-profiles/0005jsg/niti-aayog) Aayog has released a framework asking states to assess power, water, land, environmental sustainability, economic benefits and connectivity before approving data centre projects, as investment linked to India's expanding artificial intelligence economy accelerates. [Construction World](https://www.constructionworld.in/policy-updates-and-economic-news/niti-aayog-framework-sets-data-centre-approval-conditions/99101) reported the guidance, which is intended to guide decisions rather than introduce a uniform regulatory layer. ## What the NITI Aayog Framework Requires of States The report was prepared with Deloitte India and developed through consultations with the Ministry of Electronics and Information Technology, the Ministry of Power and the Department for Promotion of Industry and Internal Trade. It recommends assessing infrastructure readiness before approving capacity additions. States are advised to require developers, distribution companies and transmission utilities to prepare joint power-readiness plans covering electricity demand, sanctioned capacity, commissioning schedules and network upgrades. Additional capacity should be approved only after supporting infrastructure is commissioned and technical and payment milestones are met. Facilities above 20 MW should be ready for automated demand response and integration with State Load Despatch Centre systems, subject to grid-code requirements. The framework calls for renewable-energy and battery-storage arrangements to be verified before they are counted towards lower grid consumption. Data centres should report energy efficiency and emissions, reduce reliance on diesel generators and complete a 20-30-year seasonal assessment of water resources. Alternative supplies should be counted only when contracted, connected and available at commissioning, while desalinated water should be required where freshwater stress prevents further abstraction. States are asked to measure projects' net economic and fiscal contribution after government support, including land and infrastructure assistance and duty concessions. Incentives should be linked to commissioning, renewable-energy supply, resource efficiency, employment, domestic procurement and skills development. The framework also recommends data centre-ready zones, restrictions in environmentally sensitive areas, lifecycle plans for electronic waste and batteries, and digital single-window tracking of clearances. Common standards for power usage effectiveness, water usage effectiveness and carbon usage effectiveness are proposed to support monitoring across states. ## NITI Aayog's Policy Assessment Record NITI Aayog is the Government of India's apex policy think tank, providing directional and policy inputs to the Centre, state governments and Union Territories, according to akta.pro [company records](https://akta.pro/company-data). The same records show it runs digital platforms including NDAP, NITI for States and the Frontier Tech Hub, and programmes such as the Aspirational Districts Programme across 112 districts. It was founded in 2015 and is headquartered in New Delhi. ## Earlier Data Centre Guidance From the Frontier Tech Hub NITI Aayog's Frontier Tech Hub released a Data Centre Evaluation Framework on October 14 to help states plan sustainable data centre growth, Construction World reported. On the same day, Deccan Herald reported that NITI Aayog's report states data centres must be treated as strategic infrastructure, calling for a practical guide to enable growth while protecting local systems, securing public value and maintaining accountability throughout the project lifecycle. Ani News reported that NITI Aayog launched the framework on a Wednesday to help states assess proposals and link incentives to sustainability, citing global data centre power demand reaching 90 gigawatts over three to four years with a 50-gigawatt supply gap. ## What Comes Next for State Approvals The framework advises states to require joint power-readiness plans and to approve additional capacity only after supporting infrastructure is commissioned and technical and payment milestones are met. It also proposes digital single-window tracking of clearances and common standards for power usage effectiveness, water usage effectiveness and carbon usage effectiveness to support monitoring across states. ## Companies in this story - [NITI AAYOG company profile](https://akta.pro/company-profiles/0005jsg/niti-aayog) · website: https://niti.gov.in --- News for Agent · https://newsforagent.com/llms.txt