Money flows, not water PDF Print E-mail
Friday, 19 June 2015 00:00
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Irrigation capacity doesn’t gel with funds spent


Cooperative federalism, prime minister Narendra Modi’s pet theme, essentially envisages state governments getting more freedom to spend money in the manner they deem fit, as opposed to spending it according to the diktats of the Union government. So, when the 14th Finance Commission recommended greater transfer of central tax resources to states, the Centre readily agreed—as a result, the share of states in the divisible pool of revenues rose from 32% to 42%. Behind the philosophy of giving more freedom to states to spend money was also the knowledge that central government spending wasn’t that efficient either—more than half of central food subsidies, for instance, do not reach the target population. If state governments didn’t spend the money wisely and were voted out because of this, the logic was, they would start spending it better in the future. In the 2000s, for instance, ICRIER professor Ashok Gulati points out, Maharashtra spent R81,206 crore to increase irrigation from 3.9 million hectares to just 4.1 million while Gujarat spent just R39,369 crore and increased irrigation from 3.3 million hectares to 5.6 million—given the dramatic surge in productivity in irrigated areas, not surprisingly, theBJP got re-elected in Gujarat while the Congress got voted out in Maharashtra. It’s early days yet, but as a Kotak research report points out, most states are not spending their money wisely at the moment.

Over the past decade, the report says, state governments have spent over R6.5 lakh crore on irrigation and flood control—this is a state subject and, to put the figures in contrast, the central outlay on this is just R3,600 crore in FY16. The problem, however, is that the total irrigated area in the country has barely grown, at just around 1.3% per annum. As a result, even today, just 45% of the sown area is irrigated as compared to around 37% in the mid-90s. What’s worse, the bulk of the increase in irrigated area came from privately-owned tube wells, not from state government-led spending on canals or tanks. Between 2001 and 2011, Agriculture Census data shows, the amount of irrigated area rose from 51.6 million hectares to 64.6 million hectares. Of the 13 million hectares of additional irrigation, nearly two-thirds was from tubewells, the bulk of which were privately owned and funded through the savings of farmers. None of this is to say that things won’t change with more money being spent by state governments, and if voters behave as they did in both Gujarat and Maharashtra, chances are local governments will get more responsive.


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