October 8, 2012

2012: Highlight # 3

A new proposal at the Planning Commission rewards states that collect more irrigation service fee. Meghna Brahmachari asks if this will improve the performance of our public irrigation systems...

Incentivizing Irrigation Departments to Collect Irrigation Service Fee

Will the 12th Plan proposal for National Irrigation Management Fund (NIMF) work?

Meghna Brahmachari

During the colonial era, when irrigation systems were managed as quasi-commercial enterprises, irrigation departments collected up to a quarter the value of the irrigated output as Irrigation Service Fee (ISF). For maximizing government revenue from irrigation, therefore, irrigation departments also ensured that maximum areas and maximum number of farmers were served irrigation. After Independence, in the name of benefiting farmers, the ISF was reduced to a token; its collection declined to a tenth or less of demand.

For millions of farmers, however, this 'free' irrigation meant 'no' irrigation, poor service, deteriorating infrastructure and unaccountable irrigation department staff. To reverse this, the 12th Five Year Plan has proposed a National Irrigation Management Fund (NIMF), which will incentivize state irrigation agencies to set a rational ISF and maximize the ratio of ISF collection to demand, promote water user associations (WUAs) and volumetric water supply. The assumption is that NIMF will improve canal irrigation performance not only by rewarding agencies for improving the provision of irrigation services to larger areas and more farmers but also by making available more resources in the hands of irrigation system managers to maintain systems better. Will this assumption work?

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