Maharashtra government will need a whopping Rs 77,000 crore to complete ongoing 1,092 irrigation projects in the state. However, due to the limitations in the mobilisation of funds from budgetary allocation alone, the government is exploring various options, including long-term debt from the banks and financial institutions, public and private placement of bonds and private sector investment. So far, the government and its various undertakings have spent Rs 50,063 crore on these projects.
Water Resources Minister Sunil Tatkare told Business Standard, “The government is resolved to complete these projects. However, his department will discuss with Maharashtra chief minister Prithviraj Chavan and deputy chief minister Ajit Pawar on mobilisation of necessary funds by use of multiple instruments.”
Tatkare recalled that cutting across party lines, legislators had pressed demand for raising Rs 30,000 crore at one go to complete various irrigation projects. “However, the department has yet to take a final view in this regard,” he added.
Of the 1,092 projects, construction is in progress on 243 projects in Krishna Valley, 332 in Vidarbha, 122 in Tapi Valley, 80 in Konkan and 315 in Godavari River Valley.
Maharashtra Economic Development Council (MEDC), which is a premier research institution in the state, in its recent report, has suggested there was a need for increase in irrigation outlay to 30% from the present level of 20% keeping escalation factor in view so that more funds become available for completing incomplete projects.
Moreover, MEDC in its report said despite increase in the budgetary provision to 30% to complete incomplete irrigation projects, the government would have to tap private sector investment in the water resources sector.
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The report adds, “Investors need to have the confidence that they will get due returns on their investment. International experience in the area is limited and only in one project each in Brazil and Morocco has been tried. The state government had prepared guidelines in 2003 for private investment in water resources projects but with the setting up of the Maharashtra Water Resources Regulatory Authority (MWRRA) in 2005 in the context of the State Water Policy announced in 2003, it became apparent these guidelines need a review.
The MWRRA Act has placed considerable responsibility on the authority in the areas of tariff and entitlements. While on the one hand this limits the flexibility available to the state for involving private partners, on the other a regulator in place assures a level-playing field to all and to that extent promotes private investment in public utilities.