Public investment in irrigation across the Indian states: Financial recovery and governance

Abstract

This paper measures the financial recovery from major, medium, and minor irrigation systems in 20 states in India based on the estimates of public expenditure from 1981-82 to 2019-20. The role of governance in improving the performance of public irrigation is also analysed. The irrigation governance index is computed based on 16 important social, economic, and financial indicators collated for each state from 2001-02 to 2015-16. The analysis shows a sizeable increase in the public expenditure on agriculture and allied activities, major, medium, and minor irrigation systems during the 2000s. Agriculturally advanced states spent relatively more on irrigation due to their higher economic growth and hence better spending power. Increasing public capital formation in irrigation has barely corresponded with the outcomes in terms of net irrigated area, potential utilised, and rate of financial recovery. Irrigation financial recovery is positively determined by agricultural income, capital stock, area under rice and wheat.