Investments in irrigation projects - an impact analysis

Physical infrastructure development is a powerful means of promoting economic growth as (i) itcreates production facilities, “crowds in” private investment and thereby stimulates economic activities,(ii) reduces transaction and marketing costs, improving competitiveness, and (iii) provides employmentopportunities to the poor. Rural Infrastructure Development Fund (RIDF) supported irrigation projectshelp 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 benefitsrealised by the user community from the investments in irrigation have been found fairly high, exceptin Orissa and Uttar Pradesh. Full benefits of medium irrigation projects in Uttar Pradesh could not berealised due to pending rehabilitation work and scanty rainfall. Similarly, non-completion of canalworks in Orissa has adversely affected the returns to investment. The study has observed that adequatemaintenance through budgetary provisions and/or through levying of user charges would ensuresustainability of benefits. It has suggested that creation of Water Users Associations (WUAs), envisagedunder RIDF, would help in effective water distribution, maintenance and collection of water charges.