Maharashtra govt may raise bonds to fund irrigation projects in areas prone to drought

The proposal is to permit irrigation development corporations to raise resources through such bonds, with the state government issuing guarantees for them.

Sources confirmed that Chief Minister Devendra Fadnavis was in favour of the proposal, and is likely to approve it soon. Incidentally, it was during the previous Sena-BJP rule in Maharashtra in 1995-99 that the Maharashtra Krishna Valley Development Corporation (MKVDC) became the first state undertaking to similarly raise bonds.

This time, besides the MKVDC, the department is pushing to let other irrigation development corporations, including the Vidarbha Irrigation Development Corporation and the Godavari Marathwada Irrigation Development Corporation, which are overseeing a number of irrigation projects in drought-prone and suicide-prone belts, to raise bonds.

While Maharashtra has the largest number of dams in the country, its cultivated area under irrigation is far below the national average, with less than 20 per cent of the cultivated area brought under irrigation so far.

In 2017-18, the department has been allocated a budget of Rs 8,000 crore.

But irrigation department officials said that more than 360 major, medium, and minor irrigation projects, involving an expenditure of close to Rs 84,000 crore, were ongoing.

Apart from the state’s own budget, the Centre has pitched in, committing funding support of Rs 4000 crore for 26 crucial irrigation projects under the Pradhan Mantri Krishi Sinchai Yojana (PMKSY).

Further, the National Bank for Agriculture and Rural Development (NABARD) has also extended a soft loan of Rs 12,000 crore for these 26 projects.

The department’s plan behind exploring the external funding option is to further. bridge the resource gap, said government sources.

The plan is to use the money raised through bonds to fund ongoing projects in drought-prone regions in areas where there was no irrigation backlog. As per Governor’s directives, a bulk of the public sector investment in this field from the state’s own budget is to be utilised for completion of projects in the irrigation backlog areas.