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Wednesday, May 11, 2016

Tamilnadu tops with 32% decadal growth in investments attracted by irrigation sector across India: ASSOCHAM Study

By on Wednesday, May 11, 2016

TN tops with 32% decadal growth in investments attracted by irrigation sector across India: Study

Tamil Nadu has ranked on top in terms of growth in live investments attracted by the irrigation sector thereby clocking a compounded annual growth rate (CAGR) of over 32 per cent during the decadal period 2004-05 and 2014-15, apex industry body ASSOCHAM said today.

“Investments in irrigation sector attracted by Tamil Nadu from both private and public sources have increased from a meagre Rs 151 crore in 2004-05 to over Rs 2,400 crore, besides the state’s share in this regard has also increased from 0.1 per cent to 0.4 per cent respectively,” highlighted a recent ASSOCHAM study titled ‘Irrigation investment in India: Analysis of state-level experiences.’

About 57.5 per cent investments attracted by Tamil Nadu in irrigation sector are under implementation thereby facing a delay of about 39 months and their costs have increased by about 24 per cent of their actual cost.

Jammu and Kashmir (25.5 per cent), Chhattisgarh (23 per cent), Jharkhand (20 per cent) and Telangana (19 per cent) are amid top five states in this regard, while Gujarat and Uttarakhand have recorded sharp negative growth of about five per cent and 10 per cent in terms of investments attracted by irrigation sector during the said period.

“Investment in irrigation sector in India have increased at a CAGR of about 11 per cent between 2004-05 and 2014-15 and have more than doubled i.e. from just over Rs two lakh crore to over Rs 5.5 lakh crore,” highlighted the study prepared by ASSOCHAM Economic Research Bureau (AERB).

About 47 per cent of live investments attracted by irrigation sector are concentrated in Telangana, Andhra Pradesh, Maharashtra, Karnataka and Madhya Pradesh.

As of 2014-15, over 84 per cent of investment projects in irrigation sector are under different stages of implementation i.e. 248 projects with investments worth over Rs 4.7 lakh crore are in different stages of implementation.

Of these about 189 projects have reported either time or cost overruns ranging between 1-288 months, while costs have increased by over 61 per cent i.e. by over Rs 2.5 lakh crore of their actual costs of Rs 4.1 lakh crore.

Interestingly, about 98 per cent of investments attracted by irrigation sector in India come from public sector as private players have shown poor interest in developing the irrigation sector.

“Almost half of the total live investments worth over Rs 5.5 lakh crore attracted by irrigation sector across India as of financial year 2014-15 are concentrated in Telangana (11 per cent share), Andhra Pradesh (10 per cent), Maharashtra & Karnataka (nine per cent) and Madhya Pradesh (six per cent).

There is an urgent need to reform the current irrigation policy and strategy to further its contribution to agriculture, employment, income and economic growth to perk up the irrigation sector and lead to production optimisation.

Investment projects in irrigation sector have recorded maximum delay of 229 months in Jammu and Kashmir followed by Jharkhand (216 months), Bihar (197 months), Uttar Pradesh (195 months) and Kerala (185 months).

Irrigation projects in Maharashtra have recorded maximum share of about 21 per cent in terms of cost escalation followed by Karnataka (18 per cent), Andhra Pradesh (14 per cent), Gujarat (12 per cent) and Telangana (nine per cent).

Within states, Assam has recorded maximum cost escalation rate of about 97 per cent, Jammu & Kashmir and Kerala (95 per cent), Maharashtra (92 per cent) and Uttar Pradesh (87 per cent).

In its study, ASSOCHAM has suggested that all state governments should set up irrigation development authority to look after all projects and ensure their timely completion.

Besides, the government should bring in policy changes to improve efficiencies, encourage accountability, transparency and willingness to promote irrigation development.

“The objective should be to ensure irrigation services are more resource-efficient, responsive to farmer needs and equitable,” suggested the ASSOCHAM study.

It has further recommended for moving away from government controlled institutions to commercially oriented, effective and efficient autonomous service institutions. “The need is to encourage participatory management in irrigation sector, shift from current emphasis on physical expansion to performance improvement, and encourage wider adoption of irrigation equipment by providing incentives.”

Increasing farmer participation for development of irrigation projects by making land acquisition easier is another significant suggestion, highlighted the ASSOCHAM study.

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