US$ 188 million for Indian irrigation infrastructure

The Asian Development Bank (ADB) has approved a US$ 188 million phased loan to help modernise the irrigation infrastructure and management systems in one of India's poorest states.

The programme will focus on four northern river basins and part of the Mahanadi River Delta in the state of Orissa on India's eastern coast. The irrigation systems in these areas have deteriorated, with limited integration with agriculture support services and marketing systems. The project is designed to ensure efficient water use, boost agricultural productivity, and accelerate economic development in the area.

Commenting on the announcement, Kenichi Yokoyama, principal water resources management specialist of ADB's South Asia department, said, "Bottlenecks in water resources are increasingly seen as a major threat to India's economic growth. There is pressure on many river basins, while water quality is deteriorating. Being the largest user of water, a more efficient irrigation is crucial for both accelerating rural growth and conserving water resources."

The ADB loan will provide the bulk of the US$ 269 million funding needed to get the program underway. The balance will be covered by the Orissa State Government, which will provide US$ 73.4 million.

The ADB loan will be available in four phases over eight years. Its first loan will be for US$ 47.2 million.

Aside from renovating and extending the region's existing irrigation systems, the investment programme will promote the increased participation of water users through water user associations (WUAs) by involving them in consultations while ensuring safeguard requirements are met. It will also provide agriculture and related support services including livelihood projects for the poor. The operation and maintenance responsibilities will be progressively transferred to WUAs.

Agriculture is the backbone of Orissa's economy, employing 60% of total labour. Out of the 39 million people living in Orissa, the ninth largest state in India, 46% were living below the poverty line in 2005. About 85% of the state's poor live in rural areas.

While Orissa has relatively high rainfall, with an annual average of 1.5 m, it relies much on irrigation, as 80% of annual rainfall takes place June to September in an erratic pattern.

But the weak performance of its irrigation infrastructure has seriously constrained Orissa's agricultural productivity and diversification. While 45% of the state's agricultural land has irrigation facilities, over 30% of the designed irrigation area hardly receives any irrigation and the rest have irregular water supply due to old system design, inefficient operation, lack of field channels and limited accountability in system management to farmers, and insufficient maintenance.

The investment program will be supplemented by a US$ 250000 grant from the Multi-donor Trust Fund under ADB's Water Financing Partnership Facility, which will help Orissa's government initiate steps to introduce integrated water resources management at the state and selected river basin levels through consultative approach.