Jaitley's $13 bn water plan has failed 66 million farmers

A two-decade-old central programme to finish incomplete irrigation projects has failed some 66 million Indian farmers and halted the economic progress of 350 million Indians, according to an IndiaSpend analysis.

Finance Minister Arun Jaitley, in his budget speech last month, said the government would spend Rs.86,500 crore ($12.7 billion) over the next five years to irrigate 80 million hectare of cultivated land.

This means the government is promising to irrigate in five years more land than it has in the 69 years since Independence. Only 65 million of 140 million hectare, or 46 percent, of Indian farmland is irrigated, according to agriculture statistics released in 2014.

Jaitley intends to spend the Rs.86,500 crore on the Accelerated Irrigation Benefits Programme (AIBP) -- quadrupling annual spending -- rolled out in 1997 to fast-track existing and new irrigation projects with funding boosts to states. As much as Rs.72,000 crore ($10.5 billion) was spent over 20 years since 1997 on the AIBP.

Our analysis of the AIBP reveals multiple failures, something that its architect recently acknowledged.

“I love the AIBP, having been its grand daddy since I designed it as planning minister in the mid-1990s,” Yoginder K. Alagh, chancellor of the Central University of Gujarat, wrote last week in Outlook. “But, in the beginning of this century, we asked the question: Why is this plan not working anymore? The 12th Plan said we don’t know and must find out. The FM would be well advised to find the answer!”

Jaitley is putting his money on a failing irrigation programme and only 26 percent of the target has been met: Till 2008, with Rs.34,000 crore ($5 billion) spent, AIBP could irrigate no more than five million of 19 million hectares it intended to -- that’s 29 percent according to the audit report (2010) of the Comptroller and Auditor General (CAG). As of March 2014, 9.5 million hectare is irrigated by AIBP projects, as per the latest data.

Irrigation efficiency drops 55 percentage points: The efficiency of irrigation -- actual land watered as percentage of capacity created -- dropped from 84 percent during the VII Plan (1985-1990), to 29 percent during the XI plan (2007-2011), according to the CAG.

Of the capacity created, only 33 percent of farmland got water: Of the irrigation capacity created by the AIBP during 2007-11, only a third of farmland actually got water, the Economic Survey 2015-16 said.

“The Accelerated Irrigation Benefits Programme has failed to achieve its targeted objective of accelerating completion of large irrigation projects and delivery of benefits of irrigation water to farmers,” the CAG report said.

The finance minister’s announcement of Rs.86,500 crore ($12.7 billion) for AIBP for the next five years quadruples the annual spending on AIBP from Rs.3,650 crore per year over the last two decades to Rs.17,300 crore per year over the next five years.

The budget for 2016-17 has set aside Rs.7,308 crore for irrigation -- Rs.1,877 crore for AIBP, Rs.2,340 crore for micro-irrigation, Rs.1,500 crore for watershed management, Rs.1,023 crore for irrigation and flood control and Rs.568 crore for other spending. To meet Jaitley’s AIBP target, spending will need to soar over the next two years of his government.

If anything, the AIBP has actually slowed the efficiency of irrigation. The AIBP started with Rs.500 crore in 1996-97. In three years, by 2000, non-AIBP spending on irrigation touched Rs 700 crore, while AIBP alone spent Rs.1,440 crore.

AIBP peaked in 2008-09 with Rs.7,600 crore funding, with total irrigation spending by the central government crossing Rs.10,000 crore.

With every five-year plan, the gap between irrigation potential created steadily increased, as IndiaSpend reported earlier. Instead of increasing, irrigation utilisation fell after the introduction of AIBP, according to the Economic Survey 2015-16.

The irrigation potential utilised-water used for farming as percentage of irrigation capacity created -- was 85 percent during the VIIth and VIIIth Plan, falling to 50 percent during the IXth Plan, 70 percent during the Xth Plan and 29 percent during the XIth Plan. Planning as an economic philosophy has now been discarded.

It was not just the CAG that pointed out the AIBP’s declining efficiency, this Finance Commission report did as well.

“At the end of Xth plan (2007), the cumulative irrigation potential utilisation was about 84 percent. This has been on decline (sic) particularly since 1990s,” said the Finance Commission report. At the end of 2012, this efficiency was down to 77 percent.

Meanwhile, the Indian farmer waits for water. Of 294 AIBP projects started till 2014, about 142 are complete. Many are riddled with cost overruns and many have been under construction for two decades. Even after irrigation capacity has been created -- some dams have been built -- states stall the progress, by failing to build canals that would actually take water to the fields, according to the CAG report.

The 55-percentage-point decline -- over 15 years -- in irrigation money utilised stems from improper operation and maintenance, incomplete canals, violations in cropping pattern and diversion of irrigated land for other purposes, according to the Economic Survey, 2015-16.

Of 138 million farmers in India, 66 million depend on increasingly uncertain rains. Extreme rainfall events in central India, the core of the monsoon system, are increasing and moderate rainfall is decreasing-as a part of complex changes in local and world weather-according to a clutch of Indian and global studies reviewed by IndiaSpend.

While AIBP increased the flow of money from central government, farmers remain deprived of water.

“The government needs to ensure the achievement of targeted objectives of AIBP by focusing on the completion of existing projects rather than taking up fresh projects, and ensuring utilisation of potential already created, rather than creating new potential, so that the huge funds invested are put to productive use,” said the CAG audit report of 2010.

The importance of irrigation is rising, as India’s agriculture growth contracted 1 percent in the October to December quarter of 2015 and grew only 1.1 percent in the financial year 2015-16 (advance estimate, obtained by extrapolation of latest available data). What do we see? Back-to-back droughts, the worst in 30 years, winter (rabi) crop sowing dropping below 60 million hectares, the worst in four years, and thousands of suicides by farmers nationwide.

By Abhishek Waghmare

(In arrangement with IndiaSpend.org, a data-driven, non-profit, public interest journalism platform, where Abhishek Waghmare is a policy analyst. The views expressed are those of IndiaSpend. The author can be contacted at [email protected])