World Bank clears $396 million water loan for Madhya Pradesh

The project, for selected river basins, is slated to benefit over 2 mn people

The World Bank approved today a $396-million loan for the Madhya Pradesh Water Sector Restructuring Project. The project, for selected river basins, is slated to benefit over 2 million people.

The basins of the Chambal, Sindh, Betwa, Ken and Tons will benefit through better water productivity, leading to increased irrigation and a creation of substantial farm and non-farm employment.

"Large investments in modernising irrigation assets, coupled with agricultural intensification and diversification, will benefit about 500,000 people currently living below the poverty line," said Srinivasan Raj Rajagopal, a leading water specialist with the World Bank.

"We expect by the end of the project implementation period, these people will be above the poverty line," he said. The project would increase the production of cereals, soyabean, pulses, oilseeds, fruits, vegetables, and spices, said Rajagopal.

The loan will finance the establishment and operationalisation of planning, allocation and regulatory institutions, instruments at the state and basin-levels, institutional reforms, and measures related to delivering irrigation services at reasonable cost by financially viable entities.

It will address the rehabilitation and modernisation of selected existing irrigation and drainage assets in the five river basins, covering about 620,000 hectares of command area, coming under about 654 large, medium and small schemes.

Agriculture in Madhya Pradesh (with a population of 60 million) accounts for 35 per cent of the state's GDP, and 80 per cent of the labour force.

This loan would assist the state in implementing institutional reforms geared towards sustainable and optimal water resources management and improved reliable irrigation service delivery, in accordance with the National Water Policy and the State Water Policy, World Bank officials said.