Funds shortage hits irrigation projects

MUMBAI: It’s like a bottomless pit. Having spent around Rs 30,000 crore on irrigation projects, the Maharashtra government is looking for another Rs 41,000 crore to complete them.

With not even a pittance of this mammoth requirement coming in during the current fiscal, the state government is desperately trying out different options to fund incomplete water projects ahead of the next budget.

Maharashtra’s hopes of getting the Centre to share some burden has met with little response so far. The Centre has not yet sanctioned around Rs 2,700 crore of the prime minister’s suicide relief package, according to state finance minister Jayant Patil.

Mr Patil says the bulk of the Centre’s package is meant for irrigation. Of the annual plan of Rs 20,200 crore for 2007-08, the state has factored in Rs 4,200 crore from the Centre.

“It’s not clear whether the allocations for irrigation under the prime minister’s package are going to be adjusted in the annual plan or the Centre would release it over and above its share of Rs 4,200 crore,” said a finance ministry official. On its part, the state wants the Centre to foot the irrigation bill over and above the annual plan.

“The PM’s relief package should be fully funded by the Centre by way of grant. These grants should not form a part of the annual plan,” CM Vilasrao Deshmukh told the planning commission.

Mr Deshmukh also wants allocation for the package to be treated independent of the state’s overall grants under the Accelerated Irrigation Benefits Programme. How the Centre responds to these pleas would be known only when union finance minister P Chidambaram presents the budget.

At the state level, a grandiose plan to draw a huge loan of Rs 16,000 crore to fund irrigation projects is pending the governor’s approval, Mr Patil said. “There is no response from governor SM Krishna so far to our proposal,” Mr Patil said.

It may be recalled that the governor had last year forced the government to allocate more for the backward regions of Vidarbha, Marathwada, and North Maharashtra. “But clearing the plan to draw a mammoth debt is an altogether different thing. The state already has a debt of Rs 1.37 lakh crore which it is repaying at 9.54% rate of interest,” a finance department official said.

Incidentally, a majority of funds-starved irrigation projects are in Vidarbha and Marathwada, the regions witnessing farmers’ suicides. Under-utilisation of irrigation potential has been one of the main reasons for low productivity in these zones. But funds for irrigation has always been a sad story in Maharashtra and the current fiscal, which has seen even the Centre intervene to address the crisis, is no exception.

State BJP president Nitin Gadkari, who as PWD minister during the saffron combine’s rule liberally borrowed from the open market as well as the lending institutions, said planning commission would not approve of the state’s proposal to borrow Rs 16,000 crore. Even if the state is allowed to raise, the amount accounts for less than half the fund requirement to complete 1,236 pending projects.

Only 17.8% (41 lakh hectares) of the net sown area in Maharashtra has access to irrigation as against the national average of 38%. There are regional imbalances also as Vidarbha has only 7% irrigation but the sugar-rich Western Maharashtra has got 63% of its net sown area irrigated.