Pumped-hydro energy storage schemes (PHES) are developed for improving the net efficiency of the base load thermal power plants. These schemes are operated only at times of peak demand and during major power plant outages. In India, the first pumped storage plant was commissioned during 1985 and till today eleven plants with on aggregate installed capacity of 4804 MW have been in operation. However all these plants up to the year 2003 have generated energy less than the projected figures. The major reason for less output from the PHES in India, than that envisaged in the planning stage is deficit of off-peak power availability for pumping operation in almost all the regional power grids except north-eastern grid. But gradual increase in efficiency has been realized from PHES operation after introduction of the availability based tariff (ABT) in 2003. Further, the increase in peak power demand, requirement of spinning reserve, increased generation from renewable energy sources have singly and combinedly triggered the necessity for installation of more pumped storage schemes in the country. Under these circumstances, this analysis addresses the economics of pumped storage schemes in India with special reference to Kadamparai PHES. Various costs involved in pumped storage operation are analyzed in the Indian context. The case study reveals considerable techno-economic benefits obtained by more operational hours of the PHES in the state grid after 2003. The analysis and results would be useful for investors and researchers to understand the economics of Indian pumped storage schemes. (C) 2014 Elsevier Ltd. All rights reserved.