Accelerated Irrigation Benefits Programme given near-exclusive priority in 12th five year plan, but will it solve India’s water problems?

This article by Amita Bhaduri gets into the nitty gritty of the Accelerated Irrigation Benefits Programme (AIBP).

There is a palpable sense of a looming water crisis in India. Conflicts across competing users and uses are on the rise. In the irrigation sector, it is widely felt that “paucity of resources and poor performance of existing major and medium irrigation systems are the two main problems”(1). More recently, the sector has been faced with a spate of allegations of poor irrigation facilities created at inflated costs resulting in demands for a realistic assessment of its various programmes.

This article gets into the nitty gritty of the Accelerated Irrigation Benefits Programme (AIBP), a programme specially initiated by the Government of India in 1996 to provide financial assistance to the States to complete various ongoing multipurpose and irrigation projects in the country. The scheme aimed to create irrigation potential of the projects and thereby to extend irrigation sources (major, medium and minor) to more areas.

It was extended subsequently to cover surface water minor irrigation projects in special category States such as in the North East, Himachal Pradesh and Uttarakhand, and such projects satisfying specified criteria in some other States. 

This review looks at the changes in the AIBP programme over time and whether the created irrigation potential under the programme has been fully utilized. It attempts to find out if the programme has been successful in building water infrastructure and institutions and if this has helped in poverty reduction in the irrigated regions.

Irrigation infrastructure in India

India has managed to create a huge stock of irrigation infrastructure through the plan periods. “Up until March 2003, Rs 115 billion had been spent to create 2 million hectares of irrigated area”. (2) This is an enormous amount.

The approved central sector outlay for the twelfth five year plan itself under the water resources sector (irrigation, flood management and command area development) is about Rs. 4,22,012 crore. These projects have however suffered from massive time and cost overruns and major irrigation projects are the worst offenders as per a study carried out by the Twelfth Plan MMI Working Group on cost overruns. It says that the average cost overrun is as high as 1382 per cent in the case of the major irrigation projects. “There is a spillover of 337 projects—154 major, 148 medium and 35 Extension, Renovation, Modernisation (ERM) projects into the Twelfth Plan from previous Plan Periods.” (3)

What's more, the irrigation utilisation has been way below the potential created. The chart below shows the cumulative irrigation potential created as well as utilized though the various plan periods. As we can see, the per cent utilisation has shown a sharp decline.

irrigation through plan periods

Based on data from Twelfth Plan MMI Working Group on Cost Overruns, 2012

There is evidence that “returns to new irrigation investments are declining” (4). The analysis compares the reduction in the per cent of poor to a corresponding one per cent increase in the proportion of the crop area that is irrigated. The figures indicate a decline from 0.4 in 1973-77 to 0.2 in 1999-2000. However, the government continues to make substantial new investments in the major and medium irrigation sector. 

While the water availability for irrigation is expected to reduce because of increasing demand from other sectors, the present water use by the irrigation sector stands at a massive eighty per cent. Water use efficiency in the irrigation sector is estimated to be in the range of 35 to 40 per cent and delay in project completion is considered to be one of the causes. 

The chart below indicates the cumulative irrigation potential created as well as utilized upto the X Plan for some of the States in India. The per cent utilisation of irrigation potential created has been very low for States such as Madhya Pradesh and Orissa.

 statewise utilisation

Based on data from Twelfth Five Year Plan, Volume I, 2012

A large number of multipurpose as well as irrigation projects that had been started and not completed were continuing for 30–40 years or even more and were spilling over from one plan to the next. There were many situations where headworks were constructed but command area development was incomplete for the most part because of financial constraints being faced by the State Governments.

Huge investment made on these projects were unable to present the desired benefits because of thin spreading of available resources. Considering this, the Union Government judiciously gave high priority to the expeditious completion of projects that were already underway and brought in the AIBP as a response to this.

Completion of ongoing projects to be given highest priority

For a project to be considered under AIBP, investment clearance of the Planning Commission is necessary. Projects that are already receiving assistance from international or domestic agencies such as NABARD etc., are not eligible for assistance save for those components of such projects that are not covered under such assistance. Assistance to major, medium and Extension, Renovation and Modernization (ERM) projects is given for their phased completion. Central Assistance is provided under this programme with the idea that benefits could start flowing early with comparatively smaller investments.

Under AIBP itself “central assistance worth Rs. 54,251 crores has been provided to the States between 1996 and 2012 to accelerate the rate of creation of additional irrigation potential in the Major and Medium Irrigation (MMI) sector, which increased from 2.2 mha per Plan till the Eighth Plan to 4.10 mha during the Ninth Plan following the introduction of AIBP and further rose to 5.30 mha during the Tenth Plan and 4.28 mha during the Eleventh Plan” (5)

Financial capacities taken care of under AIBP but institutional weaknesses remain

However, in the last decade and a half it was observed that there were delays in the completion of major, medium and minor irrigation projects under AIBP.  While capital investment was taken care of in the course of AIBP, it was not leading to proper utilisation of irrigation potential. The main challenge was to develop capacities in human resources and other ‘soft’ aspects.

The chart below indicates the central loan assistance (CLA)/ grant released, the irrigation potential created and the cost per ha year-wise for the AIBP programme.  

 Trends: AIBP

Based on data from “Evaluation study on Accelerated Irrigation Benefits Programme, PEO Report No 210, Planning Commission, Government of India, 2010”

The Ministry of Water Resources had commissioned the Indian Institutes of Management (Ahmedabad, Bangalore, Kolkata and Lucknow) to analyse the reasons for poor irrigation utilisation. The following reasons were highlighted by them: lack of proper operation and maintenance; incomplete distribution systems; non-completion of command area development work; changes from the initially designed cropping pattern; and diversion of irrigable land for other purposes.

Repeated changes in norms diluted the focus of AIBP

The AIBP programme has gone through various changes since its inception. These were made in order to enhance the scope of funding as well as to allow special consideration for the regions lagging behind in development. The repeated modifications were indicative of continued lack of clarity in the focus and objectives of AIBP, as per CAG audit report.



Changes in AIBP norms

October 1996

Multipurpose projects costing Rs. 1000 crores, where substantial progress had been made, and which were beyond the resource capability of the States; Major/Medium projects in an advanced stage of completion, with potential benefit of over 1 lakh ha. Central assistance to the States was in the form of loan.

March 1997

Multipurpose projects costing over Rs. 500 crore covered.

March 1999

Projects in KBK districts (Orissa) in initial stages covered; MI surface schemes of special category states and KBK districts covered.

February 2002

Fast track projects (FTPs) to be completed in one year or two working seasons covered.

April 2004


FTP time limit extended to three working seasons; time limit for major/medium projects of 3-4 years. The programme funding was changed to a loan grant mix as normal central assistance.

April 2005 (6)

Inclusion of MI schemes of non special category States with potential of more than 100 ha with preference for tribal and drought prone areas wholly benefitting dalits and adivasis. FTPs to be completed in two years; one for one condition specified for major/ medium projects (with exceptions). The assistance was in the form of grant with 25 per cent assistance to non Special Category States and 90 per cent assistance to Special Category States. The remaining 75 per cent and 10 per cent amount respectively for non Special and Special category States are to be raised by the States from market borrowing or from own funds.

December 2006

The condition that an ongoing project has to be completed before inclusion of a new project under AIBP has been relaxed for projects benefitting states with lower irrigation development as compared to national average. All major, medium and ERM projects with Planning Commission clearance, which were in “advanced stage of construction” and could be completed in 4 years.  MI schemes in non special category States to be completed in 4 years. Development cost for MI projects raised to be completed in 2 years. FTP concept has been removed.

“Parri passu implementation of Command Area Development with AIBP, changes in quantum of Central Assistance (CA), simplification of the procedure for approval for the projects are among the suggested reforms in the proposals for XII Plan.” (7)

Institutional weaknesses and inadequate technical and managerial capacity of irrigation department staff led to delays in implementation and implementation without proper technical assessment. Also, the Command Area Development Programme (CADP) has been both divorced from the AIBP and not received the emphasis it deserves.

Evaluations and audit of the AIBP indicate the problems with the scheme.

Performance audit of AIBP by CAG noted substantial diversion of funds and other financial irreglarities 

The Comptroller and Auditor General of India (CAG) conducted a performance audit of AIBP in 2010. This was done as a follow-up audit of the earlier report on AIBP (No 15 of 2004) to assess whether the performance of AIBP had improved, and also whether the key issues highlighted in the earlier report had been appropriately addressed.

The audit for the period 2003-04 to 2007-08, covered 70 major and medium irrigation projects and 346 MI projects in 26 states. It also involved field audit of the records of Ministry of Water Resources (MoWR), Central Water Commission (CWC), State Water Resources or Irrigation Departments and implementing agencies of the State Governments, and field inspections of the sampled projects. It noted that there was a substantial diversion of funds and other financial irregularities in the AIBP components of the Sardar Sarovar Project (SSP), Gujarat.

The performance audit noted that there has been significant dilution in the focus and objectives of AIBP due to repeated modifications (six sets of modifications till then since its inception in 1996-97) in the scope and funding pattern of the scheme. Consequently, GoI must have a long-term perspective of AIBP in the programme guidelines, and avoid repeated and piecemeal modifications in an ad hoc manner.

It said that the Ministry must institute a system to collect authentic and validated data of not only creation, but also the utilization of irrigation potential for AIBP projects in the major/medium and minor irrigation sector at least for a period of five years after the completion of the projects.

Furthermore, the role of AIBP in funding a large number of individual minor irrigation projects with miniscule irrigation potential needs to be re-examined, particularly in view of the lack of monitoring and data collection by both the Ministry and Central Water Commission.

MoWR must investigate all cases of incomplete/non-commissioned projects reported as complete to ensure that there is no deviation or misuse of funds released for these projects, the CAG report stated. Appropriate action must also be taken against the authorities issuing such false completion certificates.

Since AIBP is an Additional Central Assistance (ACA) programme, GoI may ensure equitable distribution of AIBP funds to states based on predefined criteria e.g. population dependent on agriculture, un-utilised irrigation potential yet to be fulfilled, past performance in completion or commissioning of projects and utilization of targeted irrigation potential under AIBP, the report said.

In order to encourage the defaulting State Governments to ensure timely completion of projects, GoI must apply the provision for conversion of grant to loan all cases of serious slippages in completion schedule, as provided for in the MoU.

Public Accounts Committee had found “glaring deficiencies and irregularities” in AIBP

The Parliamentary Public Accounts Committee (PAC) had in February 2011 found “glaring deficiencies and irregularities” in the manner in which investment approvals had been granted to States and funds released. In its report it had noted that the creation of irrigation potential in the country was on the decline. It has recommended that the Union government set up an institutional monitoring mechanism, in consultation with the CAG and the Finance Ministry, to avoid time and cost overruns.

Evaluation of AIBP by IIM Lucknow for the Planning Commission

The Programme Evaluation Organisation of the Planning Commission too initiated an evaluation of the AIBP. (8)

This exercise, conducted by the Indian Institute of Management, Lucknow in late 2011, carried out sample surveys in 10 different states covering 10 irrigation projects (4 Major, 4 Medium and 2 ERM).  It reveals that the gap between the irrigation potential created and utilised in these projects is substantial and growing.

The reasons stated by the report were low water discharge, insufficient water distribution mechanism, unequal water distribution across farmers located at different points, loss of water during distribution, incorrect recording of irrigated area and diversion of cultivable land to other purposes within the command area.

According to the report, State Governments were finding it difficult to finance recurring costs of irrigation and to collect economic water charges from the farmers. These financial constraints not only affect the maintenance of assets such as water outlets and distribution channels under AIBP, but also the sustainability of these irrigation systems. These have adverse impacts on water use efficiency and equity.

AIBP assistance should be extended even for construction of field irrigation canal networks, the report said. Land acquisition needs to be completed before the project proposals are approved under AIBP. Institutional reforms such as restructuring of irrigation agencies including WUAs, irrigation management transfer to the farmers and promotion of self-financing of irrigation schemes is also required.

National Irrigation Management Fund

A review of the Major and Medium Irrigation sectors was done before the preparation of the Twelfth Plan. The Plan recommends that as a part of reform of the Major and Medium Irrigation (MMI) sector, the GoI should establish a non lapsable National Irrigation Management Fund (NIMF), which will reimburse to each State Irrigation Department a matching contribution to its own irrigation service fee collection from irrigators on a 1:1 ratio.

Overall, NIMF is expected to act as a catalyst to undertake reforms in the water sector such as improving water use efficiency, participatory community based management of aquifers, regulation of groundwater, revamping irrigation and water resource departments and so on.

Modified AIBP: Implementation of reform agenda to be monitored

The Twelfth Plan also suggests a modification in the central assistance to States under AIBP. Central assistance at the rate of 90 per cent will continue for the projects in special category States, projects in KBK (undivided Kalahandi, Bolangir and Koraput) districts of Orissa and projects benefiting tribal areas, drought prone and flood prone areas, as well as in areas included under Desert Development Programme.

For general category States, the rate of central assistance under AIBP will be increased to 50 per cent in place of 25 per cent for all ongoing projects, provided the States initiate necessary actions and fully implement the reform agenda set out under the NIMF within the first two years of the Twelfth Plan (2012–14).

New MMI projects of general category States will be included for support under AIBP only in exceptional cases and such projects would be eligible for central assistance at the rate of 25 per cent only. Lift irrigation schemes will be taken up for AIBP support only on the condition of implementing micro-irrigation (drip and sprinkler) in the command area of the project.

Monitoring of all schemes under central assistance should include a specific mention of the progress made in respect of implementation of the reform agenda of the NIMF, as per the Twelfth Plan.

In sum, the sustainability of the irrigation infrastructure created through schemes such as AIBP need to be studied. There is a need to restore the irrigation systems (major, medium and minor) in the country to the satisfaction of users. Also for effective transfer of irrigation management to the users group institutional development needs to be given utmost emphasis. Funding under programmes like AIBP need to be linked with institutional development. 

Endnotes and references

(1) Ashok K Mitra, Irrigation Sector Reforms: Issues and approaches, Vol 31, No. 13, March 30, 1996, Economic and Political Weekly

(2) A Sekhar, The evolution of water development and management: The perspective of the Planning Commission, 2005, Background Paper for India’s Water Economy

(3) Twelfth Five Year Plan, Volume I, 2012

(4) Analysis of 14 States by R P S Malik, in John Briscoe and R P S Malik, India’s water economy: Bracing for a turbulent future, The World Bank, 2006

(5) Twelfth Five Year Plan, Volume I, 2012).

(6) AIBP became a part of the Bharat Nirman Programme from 2005‐06. Out of the 10 mha target of Bharat Nirman programme, 6.8 mha was targeted to be created through AIBP

(7) Report of the Twelfth Plan Working Group on Major and Medium Irrigation and Command Area Development)

(8) Evaluation study on Accelerated Irrigation Benefits Programme, PEO Report No 210, Planning Commission, Government of India, 2010)



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