M. Malleswara Rao

As against Rs. 4,000 crore anticipated, the State, at most, may get only about 1,200 crore

HYDERABAD: The Centre has rejected the request repeatedly made by the State government to enhance its contribution towards the cost of all irrigation projects taken up under Accelerated Irrigation Benefit Programme (AIBP) to 90 per cent.

Anticipating a positive response from New Delhi on plea to share 90 per cent cost of the AIBP projects, the YSR government, indeed, had projected the allocation to irrigation sector in its Rs 1.03-lakhs crore budget of 2009-10 at a high of Rs 17,800 crore. This included Rs 4,000 crore assistance expected under AIBP.

As against Rs. 4,000 crore anticipated, the State, at most, may get only about 1,200 crore, highly-placed sources in the government told this correspondent here.

The Central rejection will have a cascading effect on the finances of the government. The overall budget and the irrigation allocation will suffer an outright cut of Rs. 2,800 crore.

The sources said the Union Water Resources Ministry had rejected the State’s plea on the ground that while the total budget earmarked for AIBP for 2009-10 was Rs. 8,000 crore, a half of it could not be given to one State whatever might be reason, and that the Centre would not, under any circumstances, bear 90 per cent cost of the projects except in scheduled (tribal) areas and in the districts declared as “debt-distress” areas under Prime Minister’s package following suicides by farmers.

The norm, under which the Centre is bearing 25 per cent of cost in normal areas, and 50 per cent for some special projects, and 90 per cent in scheduled areas and debt-distress districts will not be changed, ministry officials reportedly told their counterparts in the State rather curtly several times.

Enquiries revealed that the officials concerned failed to pose projects taken up in some of the 16 debt-distress covered by the PM’s package, for AIBP funds.

A district with at least 10 farmer suicides was declared as debt-distressed under the package.

A silver lining, however, is that the processing of the plea made by the State to treat Polavaram as national project reached its final stage and a Central announcement on this is likely anytime. Once this status given to Polavaram, the Union Government will contribute Rs. 6,500 crore towards Polavaram whose cost has been put at Rs. 10,283 crore. This will more than make up the loss suffered under AIBP, a senior official said.