Irrigation projects to get Rs 950 crore

Nandlal panel okays disbursal of LIC loan funds for 11 drought-hit districts of state

The Nandlal committee has decided to allow the disbursal of Rs 950 crore of the Rs 1,000 crore funds raised from the Life Insurance Corporation of India for completing irrigation projects in the 11 drought-hit districts of Maharashtra.

However, the Rs 500 crore raised by the Maharashtra Irrigation Finance Corporation (MIFC) through a bond issue floated on March 31, 2004, has failed to find sanction from the state finance department.

The department has pointed out that prior permission from the Planning Commission would be required for the disbursal.

A senior government official said, "The Nandlal committee has decided to allow the disbursal of Rs 950 crore for the completion of close to 200 irrigation projects. Unlike in previous disbursals, which were politically decided, governor Mohammad Fazal has excluded any politician's appointment on the committee, which visited project sites and assessed the requirement of funds before clearing the disbursal."

The official said the committee's brief is restricted to the 11 drought-hit districts (where 71 talukas have been affected). "It has been directed to release funds for completion of those irrigation projects which would result in tangible results by September this year."

However, officials with the irrigation department said that permissions for release of only Rs 650 core have been issued as yet. Incidentally, the state government will have to go for assembly elections not later than October 18, 2004.

Meantime, efforts by political parties to get Rs 480 crore of the proceeds of the bond issue, which was subscribed by ICICI Bank, has run into rough weather with the state finance department.

According to the state finance department, while the MIFC was permitted by the planning commission to raise funds up to March 31, this bond issue, which closed on April 8, 2004, is being viewed as having crossed the deadline set by the Planning Commission, according to the state finance department.

The department has opined that the Planning Commission's permission would be required prior to disbursing these funds.

A senior politician in the government said, "There is intense lobbying for the release of Rs 300 crore to pay for land acquired from project-affected persons of various irrigation projects before the state goes for assembly elections in September or October."