A STUDY OF FINANCIAL ASPECTS OF IRRIGATION PROJECTS IN INDIA

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1 e-library Science Research Journal ISSN : Impact Factor :.030(UIF) Vol.3 Issue.4 Feb. 015 Available online at A STUDY OF FINANCIAL ASPECTS OF IRRIGATION PROJECTS IN INDIA 1 S. D. Talekar and Pimple Bharat Nayabrao 1 Prof. & Head of Department of Commerce, Lalbahadur Shastri College, Partur, Dist: Jalna, (M.S.) Research Student. Abstract:-Irrigation is the most important instrument of the development of the agriculture. India is largest agriculture sectors and other countries. In the world enjoying high productivities in the different crops are found to be mainly depended on irrigation. The irrigated lands become by the irrigation projects and also depend on financial investment in irrigation projects. In this research paper focused on financial aspects of irrigation projects in India. The Irrigation Projects have an important role in ensuring availability of water for diverse. The financial performance analysis is important for assessment of economic viability and long term sustainability of the projects particularly so in the context of developing countries like ours for optimal utilization of limited resources. Such as analysis also assumes significance and importance for justification of huge public investment being made in the operation these projects. Keywords:Irrigation in rural development, financial performance, challenges & prospects. INTRODUCTION Water is the prime important factor besides high yielding seeds, manures and fertility of soil in improving agricultural economy of the country. Indian economy has predominantly remained agrarian in nature since independence as more than 70% population, living in about 6 lakh villages, are solely dependent upon agriculture and its allied activities. In the absence of proper irrigation facilities, agricultural activities were largely dependent upon the vagaries of weather and precipitation of rain fall. The unpredictable behavior of rainfall was causing severe drought in deficient rainfall areas and moderate to heavy floods where it was above normal. These floods were causing innumerable problems such as loss of agricultural produce, water logging, erosion of land, health hazards and loss of human lives in a big way. Keeping in view the above factors, Government of India introduced the concept of efficient Water Resources Management System in the country. Under the system many major and Medium Irrigation and Multipurpose projects were started. These projects were designed mainly to augment irrigation potential in the country. In these projects, the large scale water reservoirs were developed to conserve water for planned distribution and network of canals were construction to meet the requirement of irrigation needs. Major and Medium Irrigation and Multipurpose projects were constructed to meet drinking water requirements for both rural and urban areas. In addition, these projects have also helped in containing the floods havoc in a big way1. IRRIGATION AND RURAL DEVELOPMENT: Irrigation is an important prerequisite for the agricultural and ultimately the rural development. Well managed irrigated agricultural contributes to economic growth. Irrigation works have made life secured; major irrigation projects act as anti- famine, and anti-flood measures. They have increased the yields and value of land and even revenue to government. Similarly, the minor irrigation projects act as beneficial to marginal farmers and increases their income. It provides higher level of income and creates additional employment opportunities in rural areas. Irrigation is useful to reduce the poverty of rural people to some extent. Irrigation increases capital formation and is considered as a primary engine of rural development in developing countries, self sufficiency, stability and 1 S. D. Talekar and Pimple Bharat Nayabrao, e- Library Science Research Journal Volume 3 Issue 4 Feb 015, Online & Print 1

2 prosperity of agriculture in India depend or irrigation more than on any other single sphere of activity. And agricultural prosperity is the key the general prosperity in the country. MODES OF IRRIGATION: There are different irrigational sources in India. The following modes of irrigation are used for irrigating the agricultural land. 1.Major irrigation project: An irrigation project, which covers more than 10,000 hectares as the cultivable common area is called major project..medium irrigation project: Medium irrigation project are those with cultural command areas between 000 to 10,000 hectares. 3.Minor irrigation projects: After independence of India government of India has given more stress on minor irrigation projects. Scope of the study: The present study aims at analyzing the financial performance in irrigation projects in and its impact on farm economy. The study covers irrigation development and proposes to quantify the extent to which it has increased agricultural production and productivity, farm income favorable cropping pattern and cropping intensity. Objectives of the study: (1)To review the development of irrigation Projects in India during the Plan Period. ()To review the impact of investment on irrigation Projects for the development. Research methodology: For the purpose of the present study data has been collected from the secondary sources for the plan period to Limitation of the study: 1.The present study is limited to only financial aspects of irrigation projects in India..Due to time, money, and H. R. only Major, Medium and Minor irrigation Projects for study. REVIEW OF LITERATURE Sundar (1989) argues for equity in irrigation distribution because, "public funds are invested in the system for facilitating increased agricultural production for the benefits of the State, and the Country, everyone engaged in cultivating the lands in the command should benefit reasonably equally. If this is accepted, one should talk of efficiency of the system only after equity reasonably was well achieved3. According to Staub, William J. and Melin, G. Blase the success of the wheat technology in Punjab is due to the good irrigation base created with substantial public and private investment in the development of surface and ground water irrigation sources4. Dhawan (1998b) also points to an important lapse in the conventional cost economics of canal irrigation. This is the non-consideration of incidental benefits, caused by the canals. An important incidental benefit is the canal (seepage) induced artificial groundwater recharging and this not only improves returns to investments in well irrigation. But also expands the very base for groundwater based agriculture. Other incidental benefits which need serious consideration are reduction in instability in the farm economy. Multiple uses of irrigation water, like civic needs of urban and rural populations, especially drinking water needs, employment benefits, etc5. INVESTMENT IN IRRIGATION: After partition in 1947 India had to live with the 83 per cent of the population of undivided India and 84 per cent of net land area, but only 69 per cent of irrigated area amounting to 19.4 million hectares. Over one-half of the irrigated area under government canals in undivided India was lost in partition along with many agriculturally surplus areas. Thus, the need to accelerate the rate of irrigation development was actually felt after independence. With the beginning of planning in the Central and State Governments have been devoting huge investments

3 for irrigation development. The country has invested about Rs.45, 000 crores on major, medium and minor irrigation projects during the past 40 years. Table No.1 has given the plan-wise expenditure on alternative irrigation schemes. Plan Period Table No. 1 Investment in irrigation under Five Year Plan in India (Value in Rs Crores) Source: Reports of the Working Groups of XIIth Five Year Plan.and XIIth Plan Documents of State Gov. From table no. 1 it may be seen that in normal terms the expenditure on irrigation works increased from Rs.446 crores during the first Plan to an estimated amount of Rs. 95,680 crores during the Eleventh plan. The Eleventh plan outlay for flood control is Rs crores. For major and medium irrigation project the allocation is Rs. 80,40 crores in the Eleventh plan. One may also have an idea about the investment in irrigation development by considering the proportion of the total outlay devoted to irrigation in different plans. In the table no. 1 shows that, the investment on irrigation development has increased significantly in the successive Five Year Plans. There was however, a marked decline in investment after the Sixth Plan. In absolute terms, the investment in irrigation infrastructure development in India has increased more than 60 times from Rs. 446 crores in the First Plan ( ) to Rs. 95,680 crores in the Eleventh Plan (007-01). Out of the total expenditure on irrigation and flood control more than 55 per cent had been earmarked for the development of major and medium irrigation projects during most of the plan periods except during the Third and Fourth Plan periods. Irrigation Development in India: Challenges and Prospects Irrigation has acquired increasing importance in agriculture the world over. From just 8 million hectares (M Ha) in 1800, irrigated area across the world increased fivefold to 40 Million Hectares (M Ha) (13.4 M Ha in India) in 1900, to 100MHa in 1950 and to just over 55MHa in With almost one fifth of that area (50.1MHa net irrigated area), India has the highest irrigated land in the world today (Postel, 1999)6. During the last two decades, irrigation's steady boom has begun to wane. Between 1970 and 198, global irrigated area grew at an average rate of % per year. But between 198 and 1994, this rate dropped to an annual rate of 1.3%. Even by optimistic estimates, the global irrigation base is unlikely to grow faster than 0.6%a year over the next 5 years. Since 1980, per capita irrigated area has declined, leading to stagnation in per capita cereal production, and thus adding a new dimension to world food security (Gulati, 00)7. Minor Irrigation Development Scenario Major and Medium Irrigation Minor Irrigation The first, five year Plan started in 1951 with an irrigation potential of only.60 mha of which contribution of Minor Irrigation was 1.90 mha i.e. 57% (surface water 6.40 mha and Groundwater 6.50 Mha). From then onwards over successive plan periods, irrigation potential increased steadily in surface water schemes. If VI Plan is taken as the mid-level to assess the complete plan-wise development for the six decades till the end of XI Plan, it is observed that, at the start of VI Plan(in 1980), irrigation potential created in surface water (MI) was 8.00 mha and groundwater.00 mha respectively. There was reportedly no potential gap between creation and utilization till that period. The total potential created at (30 Mha) in 1980 points that the growth was modest, more so, for surface water Total Flood Control First Plan( ) Second Plan( ) Third Plan( ) Annual Plan ( ) Fourth Plan ( ) Fifth Plan ( ) Sixth Plan ( ) Seventh Plan ( ) Eighth Plan (199-97) Ninth Plan(1997-0) X Plan (00-07) XI Plan Target(007-01)

4 schemes. The momentum picked up in irrigation potential created after 1980 was particularly by groundwater schemes which were popularly adopted due to rural electrification and green revolution technologies. The growth is apparently plateauing in VIII, IX and X Plan performances. For the minor irrigation scenario as a whole, the potential created by the end of X Plan is mha and the potential utilized at 5.4 mha only. However, with access to new technologies in drilling, pump sets and irrigation systems, noticeable acceleration in irrigation potential created was observed in groundwater sector. Irrigation potential created and utilized in groundwater sector played a vital role giving a boost to the food production and socio-economic status of farmers in various parts of the country. On the financial front, unit cost of irrigation potential created in minor irrigation sector especially in groundwater remain low compared to major, medium & minor surface irrigation projects. The expenditure incurred in minor irrigation sector during 1st Plan was Rs 65.6 crores, about 14.84% of the total plan outlay of Rs crore in irrigation sector. The Plan investment steadily increased up to Rs 8, crore during IX Plan and further onto Rs 14, crores during X Plan. Salient details of the growth in surface and groundwater potential and investments made over different Plan periods till XI Plan are given in Table No. Table No. Minor Irrigation development during Plan Periods (Physical & Financial) Five Year Plans Potential Created, mha Potential Utilized, mha Investment, Rs crore SW GW Total SW GW Total Pre-plan (up to 1951) First plan ( ) Second Plan ( ) Third Plan ( ) Annual Plans ( ) Fourth Plan ( ) Fifth Plan ( ) Annual Plans ( ) Sixth Plan ( ) ,979.6 Seventh Plan ( ) , Annual Plans (1990-9) , Eighth Plan (199-97) , Ninth Plan (1997-0) , X Plan (00-07) , Total till end of X Plan ,468.5 Source: - Final Report of Planning commission Government of India (01-017) Physical and Financial Performance of Watershed Management Projects during 11th Five Year Plan During the Eleventh FYP, the activities under Watershed Development Programme were focused to completion of large number of ongoing projects under Desert Development Programme (DDP), Drought Prone Areas Programme (DPAP) & Integrated Wastelands Development Programme (IWDP) and launching a new modified programme of Integrated Watershed Management Programme (IWMP) by amalgamating the earlier programmes. The Department decided not to sanction any new projects under DDP, DPAP & IWDP programmes in the Eleventh Five Year Plan and shifted the focus entirely to accelerate completion of the projects. Department took the policy decision of completion of Pre-Hariyali projects (sanctioned before ) by and Hariyali projects (sanctioned to ) by except for snow-bound areas where a grace period of three years have been allowed for completion. As a result of the endeavor of the Department, 3,495 projects out of 45,06 were either closed or completed by the end of the financial year it is given table no. 3 4

5 Table No. 3 Source: - Final Report of Planning commission Government of India (01-017) P.NO.7 CONCLUSIONS In this paper has been focused on the financial aspects of irrigation projects, rural development through the irrigation and also focused challenges and prospects for development of irrigation projects in India. The situation or the financial facilities of the irrigation projects in India is not adequate than other sectors. Government has provided 446 crores in the during the first five year plan for development of irrigation projects it was very bad result for India. SUGGESTIONS Indian Government has should be so many facilities for the development of the irrigation projects because the India is the agriculture country and agriculture depend on irrigation therefore government has should be provision of 40% amounts of the central budget for irrigation development. REFERENCES Pre-IWMP Programmes No. of Projects sanctioned during to Projects completed/closed by DPAP 7,439 0,580 DDP 15,746 10,998 IWDP 1, Total 45,06 3,495 1.Report on financial Aspects of irrigation projects in India, May-010.Pandey M.P., The impact of irrigation on rural development: A case study, Concept publishing company, New Delhi, Sundar, A. (1989). Management is Effectiveness Achieved effectively, WAMANA, April Staup, William, J. and Blase, Melvin Co., (1974): Indiced Technological change in Developing Agricultural Implication for Income Distribution and Agricultural Development: The Journal of Development Area, 8(4) July ( ) 5.Dhawan, B. D. (l998b): Presidential Address- 'India's Irrigation Sector: Myths and Realities', (57th Annual Conference of the Indian Society of Agricultural Economics), Indian Journal of Agricultural Economics, 53 (1): Postel, Sandra (1999): Pillar of Sand: Can the Irrigation Miracle Last? New York & London: WW Norton & Company. 7.Gulati, Ashok (00): Challenges to Punjab Agriculture in a Globalizing World. Paper based on the presentation given at the policy dialogue on Challenges to Punjab Agriculture in a Globalizing World jointly organized by IFPRI and ICRIER, New Delhi, P. 1-. Pimple Bharat Nayabrao Research Student. 5