Date:16/04/2005 URL: http://www.thehindu.com/2005/04/16/stories/2005041600191500.htm
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Uncertainty over Central aid to water projects

Gargi Parsai

NEW DELHI: There is still a question mark on the Central assistance to States for the last-mile water projects under the Accelerated Integrated Benefits Programme (AIBP). The Centre expects States to borrow from the market to fulfil their requirements, which may affect the scheme.

Although an allocation of Rs. 4,800 crores was announced in the budget for 2005-06, no provision was made for it. No funds were earmarked for the 30 per cent grant component either. About 37 projects are in the pipeline for completion under the AIBP in the next two years. Central assistance is given in the form of loan and grant.

Informed sources said the Centre would rather watch the situation till August this year. If the States face a resource crunch or are unable to borrow from the market to finance the irrigation sector, then the Ministry of Water Resources will raise a supplementary demand for AIBP funds in the monsoon session of Parliament. States, which are able to run the programme on their own and recover operation and maintenance costs, will be encouraged to do so. For now, however the status quo remains.

What is causing concern to Water Resources Ministry officers is that the irrigation sector may not be a priority for the State Finance Departments to service the sector from market borrowings. Resources are thinly spread and water may not be a priority sector. Besides, most States are not ready to meet the conditionality of recovery of Operation and Maintenance costs through raising tariffs.

There is as much uncertainty over the other scheme announced in the budget to bring additional one crore hectares under assured irrigation over four years under Bharat Nirman. Initial estimates put the cost of this programme at around Rs. 4,500 crores annually with a possible subsidy component for groundwater schemes on the lines of the million tube wells scheme in Bihar. The assured irrigation scheme would be implemented in States where the present water utilisation of surface and groundwater is about 30 per cent.

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