system of irrigation charges in India*
The sys;tem of irrigation charges in India has evolved as a result of several historical and ad hoc factors. Irrigation being a state subject, there are wide regional differences in water rates. Although, theoretically, the criterion governing investment projects should provide the basis for rate fixation, the practice in India is to fix water rates as a certain proportion of gross income or gross produce. The Nijalingappa Committee recommended that water rates should be fixed at 25 per cent to 40 P©r cent of the additional net benefit per acre of crop output, taking into account water requirement of crop, rainfall, yield rate, etc. These proportions apply to areas where it is possible to calculate net benefits. Where it is not possible, the Committee recommended that the rate should lie between 5 P©r cent and 12 per cent of gross income. 1 This is also the recommendation of the latest Irrigation Commissiom. 2 This rate applies to both water from canals and tubewells. At present in Andhra Pradesh the charge for using canal or tubewell water is
Rs 33«4 acre of land irrigated. It constitutes a mere 2.6 per cent of the gross value of crop produced by the aid of irrigation*^ Water rates are in general low in all the states in India, both in terms of what the farmers can3
pay and in terms of what irrigation authorities should charge to make irrigation projects economically viable. Existing water rates do not even meet interest
£
charges on investment. There is a large element of non-economic considerations (i.e. the desire to popularise irrigation) and administrative decision-making in the fixation of water rates in India. An example of the latter is that in
1,, Government of India, Ministry of Irrigation & Power, Report of the Committee to Suggest Ways and Means of Improving Returns from Irrigation Projects, New Delhi, 1964? also called the Nijalingappa Committee.
2 Report of the Irrigation Commission. 1972. Vol.I, op.cit., pp 274-276.
3 Report of the Irrigation Commission, 1972, <ib±d.> , pp 271-272.
4 Ibid.
5 The rates in the rice growing states range from 1 per cent of the gross value of produce in Punjab to 7 per cent in Bihar, ibid.
6 Srinivasan,N. Agricultural Administration in India, op.cit.. p 196.
87
South India, in the Godavary Delta Scheme it was found administratively con
venient to combine irrigation charges with land revenue and to recover a con-solidated amount from farmers. 3 Also, attempts to fix water rates on economic grounds have always been thwarted by political reasons, for, state government find it expedient to keep water rates low. Thus in the fixation of water rates in India we see the departure from all known theoretical criteria. 2 The re
commendations to increase water rates by both the Nijalingappa Committee and the Fifth Finance Committee have, by and large, been ignored.5
Private tubewells may be owned individually or collectively by two or more cultivators. Their construction may be financed either by farmers*
own funds or by loans provided by Land Mortgage Banks, Central Cooperative Banks and commercial banks.^ Ownership of groundwater rest with owners of the overlying land. 5 There is no restriction on the owners’ right of the use
of water which he is free to sell in amounts and at rates of their choosing.^
The latest Irrigation Commission found that, in general, owners of tubewells
7
sold water on a crop-sharing basis talcing one-third of gross produced.
1 Report of the Irrigation Commission, 1972, op.cit., p 265*
2 Although rate fixation of irrigation projects falls within the scope of pricing policy of public utilities, it raises a number of problems specific to itself. These are competently discussed in the following workss
Ansari,N. Economics of Irrigation Rates, A Study of Punjab and Uttar Pradesh, Asia Publishing House, London, 1968? Gadgil,G.R. Economics of Irrigation, Gokhale Institute of Politics and Economics, Poona, 1948? National Council of Applied Economic Research, Criteria for Fixation of Water Rates and the Selection of Irrigation Projects, Asia Publishing House, Bombay 1959.
5 Report of the Committee to Suggest Ways and Means of Improving Financial Returns from Projects, op.cit., p 5? Anon, 'Report of the Fifth Finance Commission - A Summary,' RBIB, XXIII, 9? Sept. 1969? PP 1429-1455*
4 Anon, ’Groundwater Resources for Irrigation in India,' op.cit., p 1511 for the role of the Agricultural Refinance Coorporation in this connection should be recalled,
5 Report of-.thgirrigation Commission, 1972, op.cit., p 562. Owing to the importance of ’groundwater for irrigation" some states have enacted legis
lation regulating the use of tubewell water.
6 Ibid. p 271.
7 loc.cit.
88
The total number of private tubewells for the state of Andhra Pradesh during the Planning period is given in Table XX*4*
Table 11*4* Private Tubewells including Filter Points (Pre-Plan - 1968/69)
Pre-Plan First Plan Second Plan Third Plan Total up to 1968/69
1 2 5 4 5
16,197 18,000 25,000 26,000 28,000
Source : Column 1 Dhar,U.^’Some Economic Factors in the Expansion of
Electricity in ^ural Areas,1 IJAE, XXIV, 4» Oct.-Dec. 1969* P 169*
Colutms 2-5 ’Groundwater Resources for Irrigation in India,’ op.cit* * pp 1521-1522.
The table shows that the number of tubewells increased by 5 P©1* cent over the Planning period and taking the area -under rice cultivation in 1967-68, the 1 total number of tubewells in the state in 1968-69 represents only 0.02 per cent per acre. In West Godavary alone, plans for the exploitation of ground
water resources under the Intensive Agricultural District Programme en
visaged the construction of 7 >500 tubewells but in 1968-69 the total number of tubewells stood at 2,582 representing about a third of the target. 2 In terms of the size distribution of tubewells in the district, Table 11.5 shows that farms above 5 acres but below 10 acres accounted for 70 per cent of the total number of tubewells in West Godavary.
1 Total area under rice in Andhra Pradesh in 1967-68 was 1,559>766 acres, Season and Crop Report, Andhra Pradesh, 1967-68* op.cit., p 16.
2 George,P.S. & Chonkidar^V.V. Production and Marketing Pattern of Paddy,
op.cit., p 18. ~
89
Table II# 5* Number of Tubewells in West Godavary according to Farm Size, 1968*69#
Farm Size ( acres )
1
Number of Tubewells 2
Percentage to Total 3.
Below 5 705 5
5 - 5 4476 33
5 - 1 0 5941 44
Above 10 2502 18
15502 100
Sources George,P.S. & Choukidar»V,V. Production and Marketing Pattern of Paddy, op.cit., p 18.
The figures in Tables II.4 and II#5 give us an idea of the number of tubewells in West Godavary and the state as a whole. Time series data for the state and the district is fragmentary. To the extent that electric pumps and oil engines complement the use of private tubewells, growth of the former between 1951 and 1966 give some indications regarding the growth of the latter.
Table II#6 shows the rate of growth of electric engines and diesel engines and other relevant information. The rate of growth of electric engines was higher than that of oil engines# 1 In the case of both types of equipment, farms above 5 acres accounted for 42 per cent of the total#2
1 The rate of increase was more pronounced, taking- the period I96I-69 as a whole, 1 Groundwater Resources for Irrigation in India,' op.cit., P 1515*
2 Refer Columns 8 & 9> Table II#6f below#.
90 Table II.6. Electric Engines and Oil Engines in Andhra Pradesh, 1951-66
Number per 1000 acres
Electric/Oil Engine, I96I 1951 1956
Construction of private tubewells is technically feasible in the Godavary Delta. 1 The ability of farmers to invest in them depends upon their ability to afford the cost of installing both the tubewell and electric or oil engines. In the deltaic region of West Godavary, the cost of installing a private tubewell varies from Rs 500 and Rs 2000. An electric engine of 5 h.p.
costs Rs 2500 and an oil engine of 5 h.p. costs between Rs 5500 and Rs 4000 in 1969. The total cost of installing a tubewell complete with electric engine is, roughly, Rs 5000 and one equipped with oil engine will be about Rs 6000*p We shall draw upon these figures in the next section where we will discuss the feasibility of investing in tubewells.
1 Report of the Irrigation Commission. 1972, Yol. Ill (Part 2), op.cit.t p 145*
2 FrankeljF.F. India's Green Revolution, Economic Gains and Political Costs, Princeton University Press, New Jersey, 1971» P 95* Estimates of the cost of installing private tubewells in Andhra Pradesh are hard to come by and what is available refers to the states of Uttar Pradesh and Punjab. In our study of feasibility of constructing private tubewells we have used the figure of Rs 4OOO for an electrically operated one. The use of the figure will not be misleading as this is the cost of installing such a tubewell in Thanjavur which has geographical characteristics similar to West. Godavary, MirchandanijG.G. (Ed.) Aspects of Agriculture in India, Allied Publishers, London, 1973, P *347.