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Government looking to finish 80% irrigation projects by funds through loans, bonds

Experts admit that an Achilles heels of the already stressed agriculture sector in Maharashtra, which is likely to show 2.7% negative growth in 2015-16, is lack of irrigation.

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Faced with rising agrarian distress, limited budget allocations and a huge Rs85,000 crore cost for under-construction irrigation projects, the state government is looking at raising funds through loans, soft borrowings from international and domestic institutions and public bonds. The state irrigation department plans to complete at least 80% projects in three years by infusing funds through this route.

Experts admit that an Achilles heels of the already stressed agriculture sector in Maharashtra, which is likely to show 2.7% negative growth in 2015-16, is lack of irrigation. Maharashtra has the largest number of dams in India but much lower irrigation compared to the national average of 45%.

The percentage of irrigated potential with reference to the cultivable area is just 21.63% with the ultimate potential that can be created at 38%. Maharashtra has 376 ongoing projects, including 67 major, 83 medium and 226 minor, with a balance cost of Rs84,430 crore. Once completed, these dams can irrigate another 32.21 lakh hectares of farmland.

"In addition to the around Rs8,000 crore allocated for irrigation in the budget, if we can raise around Rs12,000-15,000 crore through this route, taking the total to about Rs25,000 crore per year, we will be able to complete at least 80% of the balance projects in three years," water resources minister Girish Mahajan told dna.

He pointed to how even smaller states, such as Telangana and Andhra Pradesh, had high budgetary provisions for irrigation. "We are looking at loans, bonds or soft loans through international agencies like JICA. We have no option as otherwise it will take years for these projects to be completed... considering rising material costs and inflation and other factors," noted Mahajan, pointing to how the Waghur dam in Jalgaon district was nearing completion after almost 35 years.

The water resources department has also appointed consultants to examine the best funding options. During the erstwhile Shiv Sena-BJP-led state goverment, the Maharashtra Krishna Valley Development Corporation became the first state undertaking to float bonds with government guarantees. The state has already sought Rs10,000 crore from the Centre for completing pending irrigation projects.

In 2015-16, the state water resources department has been allocated Rs7,850 crore, up from Rs7,272 crore in the previous fiscal.

"The choice of projects which will be taken up from these funds will depend on their costs, benefits and if they are located in drought-prone areas or farmer suicide-affected districts," an official said.

Apart from the 376 pending projects, a total of 26 projects with a balance cost of Rs19,663 crore in Maharashtra have been taken up PMKSY to be completed in three phases up to March 2017, March 2020 and March 2022.

Maharashtra has 173 drought-prone talukas, which form a substantial number of the 971 nationally with 32% of the state's grographical area under deficit and 10.50% under highly deficit rainfall.

According to the Maharashtra Water Resources Regulatory Authority, of the five river basin systems, only 55% of the dependable yield is available in the four river basins (Krishna, Godavari, Tapi and Narmada) east of the Western Ghats. These four basins comprise 92% of the cultivable land and over 60% of the rural population.

An approximate 49% of the area of these four river basins consisting 43% of the population is already considered as deficit or highly deficit regarding water availability. The size of these deficit areas is likely to increase steadily with increasing population and economic growth in the years to come. The remaining 45% water flow is from the westward flowing rivers, which originate in the Western Ghats, are monsoon specific and drain into the Arabian Sea with restriction on water utilisation due to geographical factors.

Geographical area (GA): 307 lakh hectares

Cultivable area (CA): 225 lakh hectares (73% of GA)
Annual rainfall: 400-6,000mm
Ultimate potential: 85 lakh hectares (38% of CA)
Potential created as on June 2014: 48.66 lakh hectares or 21.63% of CA
Total completed irrigation projects: 3,186, including 27 major, 187 medium and 2,972 minor
Reasons for shortfall in creation of irrigation potential: Fund paucity, opposition from project-affected families, land acquisition, litigation, time taken for green clearances
From 1996 to March 2016, 43 major-medium and 122 minor irrigation projects have been completed under the Accelerated Irrigation Benefit Programme, with Rs11,688.91 crore central assistance received and 7.12 lakh hectares irrigated potential created.

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