Investments in irrigation projects - an impact analysis

Abstract

Physical infrastructure development is a powerful means of promoting economic growth as (i) it creates production facilities, “crowds in†private investment and thereby stimulates economic activities, (ii) reduces transaction and marketing costs, improving competitiveness, and (iii) provides employment opportunities to the poor. Rural Infrastructure Development Fund (RIDF) supported irrigation projects help provide the necessary impetus for infrastructure development, thereby aiding in capital formation. Evaluation of irrigation investments under RIDF in the states of Uttar Pradesh, Haryana, Orissa, Maharashtra and Assam has revealed that the investments are economically viable. The net benefits realised by the user community from the investments in irrigation have been found fairly high, except in Orissa and Uttar Pradesh. Full benefits of medium irrigation projects in Uttar Pradesh could not be realised due to pending rehabilitation work and scanty rainfall. Similarly, non-completion of canal works in Orissa has adversely affected the returns to investment. The study has observed that adequate maintenance through budgetary provisions and/or through levying of user charges would ensure sustainability of benefits. It has suggested that creation of Water Users Associations (WUAs), envisaged under RIDF, would help in effective water distribution, maintenance and collection of water charges.Resource /Energy Economics and Policy,