State needs ₹1.8 lakh crore to complete all irrigation projects

A file photo of a canal being constructed as part of Yettinahole drinking water project in Sakleshpur taluk of Hassan district.  

As Karnataka legally battles with neighbouring States over its share in the inter-State river waters, it also has a huge financial burden to complete existing projects. For, the government now estimates that about ₹1.8 lakh crore is needed to complete all irrigation projects, including that of drinking water schemes.

Over the last 10 years, about ₹87,000 crore has been spent on irrigation projects, creating irrigation potential of 4.47 lakh hectares in the State. Once the irrigation projects are completed, the State will also have created a maximum command area of 40.66 lakh hectares.

While an estimated ₹1.12 lakh crore is required to complete 245 ongoing irrigation works in the State, another ₹50,000 crore is estimated for the resettlement and rehabilitation of villagers in more than 20 villages and about one lakh acres of land that will be submerged once the height of the Almatti dam across the Krishna is increased from 519 ft to 524 ft. This is besides funds needed for other projects, including lift irrigation and tank rejuvenation, all of which require over ₹15,000 crore.

Acknowledging the estimation that has been drawn, government sources said: “These estimates hold good currently. Annually, we see an average cost escalation between 8% and 10%. Over the years, budgetary allocation towards irrigation projects has not been enough, resulting in cost escalation.” If irrigation potential has to be achieved quickly and at a lesser cost, the government has to set aside at least ₹25,000 crore annually for the next five years and set a deadline for their completion, sources said, and pointed out that the ₹80,000-crore Kaleshwaram project in Telangana was inaugurated last year, about three years after its launch.

Currently, irrigation potential has been created for about 29.19 lakh hectares across Karnataka, which has the maximum potential of 40.66 lakh hectares. If the budget allocation is any indicator, between 2010 and 2015, Karnataka spent a total of ₹29,729 crore against the budgetary allocation of ₹34,494 crore, creating irrigation potential in an area of 3.08 lakh hectares. However, as the cost of projects escalated, between 2015 and 2020, despite spending nearly the double of what was spent in the preceding five years, about 1.39 lakh hectares of irrigation potential was created. For the record, against the budget allocation of ₹73,195 crore, the State spent ₹57,335 crore.

Big-ticket projects

Projects in the Krishna basin, Upper Bhadra project to irrigate central Karnataka region, and Yettinahole drinking water project are among the big-ticket projects that have seen huge escalation in costs and are also moving at a slow pace owing to issues related to inter-State water dispute, environment, forests, land acquisition, and finance, among others. While the Mahadayi project has seen cost escalation from ₹94 crore in 2000 to ₹1,677.30 crore now, the Yettinhole drinking water has seen an escalation of cost from nearly ₹13,000 crore in 2014 to about ₹25,000 crore, and Upper Bhadra project has seen cost escalation from about ₹6,000 crore in 2008 to about ₹20,900 crore now. Currently, the Mekedatu drinking water project is estimated to cost around ₹9,000 crore. However, delay in receiving permission to start the project could escalate the cost further.

‘Difficult to raise loans now’

While there has been no plan to raise money through bonds, the government seems to have limited option to raise money from the market as it is closer to the borrowing limits. Sources said that in the current situation, it is difficult to raise loans. “Various irrigation projects are currently being financed through bank loan. The State has availed of about ₹7,000 crore from banks which is due for repayment in a period between 8 and 10 years,” sources said, and added that there was no proposal currently to raise money from the market.

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Printable version | Jun 22, 2021 8:33:18 PM | https://www.thehindu.com/news/national/karnataka/state-needs-18-lakh-crore-to-complete-all-irrigation-projects/article30958606.ece

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