down spending on irrigation. The annual rate of growth in minor irrigation is much
higher at 11.95% compared to that in the major–medium irrigation systems at
5.75%. An increasing investment in minor irrigation, mainly tanks and tube wells
can be explained by long gestation periods in the construction of canal network and
perhaps growing inefficiency in it. It is an important step, especially knowing that
the marginal efficiency of capital in minor irrigation is much higher than that in
major–medium irrigation.
Large inter-state differences in public investment in agriculture and irrigation are
identified. There have been historical reasons and agroclimatic factors behind
putting more outlays into major and medium irrigation systems in the northern
states (mainly Punjab and Haryana) compared to other parts of India (Bathla et al.
2020). Such biases have remained for a longer period in the country and appear to
continue.
Which state invests more in agriculture? As shown in Table 5, Gujarat,
Karnataka, Maharashtra, MP-Chhattisgarh, and AP-Telangana have occupied a
relatively higher share of public investment in agriculture–irrigation between 10
and 20% in recent years. Surprisingly, Punjab hardly invests in surface irrigation.
3
The investment share is also lower in the hilly states, which is expected. The
budgetary allocations towards agriculture and irrigation are largely determined by
the size of government spending, availability of funds, revenue deficit, and factors
from the demand side. It is crucial for the government to increase investments in
Bihar, Assam, Odisha, Tamil Nadu, and West Bengal, which will also induce
private investment in due course owing to a complementarity relation between the
two investments.
Going by a sizeable increase in absolute expenditure in agriculture and irrigation, it is imperative to analyse the extent to which states have shown priority
towards the agricultural sector over the period. This is evaluated by constructing an
agriculture orientation index (AOI), based on the share of public expenditure in
agriculture and irrigation sector vis-à-vis its weight in the national income. As
shown in Table 6, the AOI has improved in many states with little increase at the
aggregate national level. The AOI was 0.60 in TE 1983–84 declined to 0.48 in TE
2003–04 and increased to 0.61 by 2015–16. A significant increase in AOI is witnessed only from mid 2000s (TE 2012–13) in Gujarat, Himachal Pradesh,
Karnataka, Kerala, Punjab, Chhattisgarh, and Uttarakhand but weakens in Haryana,
Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, West Bengal, and
Jharkhand. The AOI has moderately increased in Assam and Bihar. A low index in
most of the low-income states having high incidence of rural poverty and low land
and labour productivity is worrisome. It calls for increased budgetary outlays
towards agriculture and irrigation to invigorate the rate of growth of agriculture.
3
This may also be as the Indus system has covered almost all the eligible areas by late 1970s, and
the dominance of private tubewells has come up through introduction of paddy and free power
against paid canal water.
Estimating Efficiency of Public Investment in Irrigation ...
55
higher at 11.95% compared to that in the major–medium irrigation systems at
5.75%. An increasing investment in minor irrigation, mainly tanks and tube wells
can be explained by long gestation periods in the construction of canal network and
perhaps growing inefficiency in it. It is an important step, especially knowing that
the marginal efficiency of capital in minor irrigation is much higher than that in
major–medium irrigation.
Large inter-state differences in public investment in agriculture and irrigation are
identified. There have been historical reasons and agroclimatic factors behind
putting more outlays into major and medium irrigation systems in the northern
states (mainly Punjab and Haryana) compared to other parts of India (Bathla et al.
2020). Such biases have remained for a longer period in the country and appear to
continue.
Which state invests more in agriculture? As shown in Table 5, Gujarat,
Karnataka, Maharashtra, MP-Chhattisgarh, and AP-Telangana have occupied a
relatively higher share of public investment in agriculture–irrigation between 10
and 20% in recent years. Surprisingly, Punjab hardly invests in surface irrigation.
3
The investment share is also lower in the hilly states, which is expected. The
budgetary allocations towards agriculture and irrigation are largely determined by
the size of government spending, availability of funds, revenue deficit, and factors
from the demand side. It is crucial for the government to increase investments in
Bihar, Assam, Odisha, Tamil Nadu, and West Bengal, which will also induce
private investment in due course owing to a complementarity relation between the
two investments.
Going by a sizeable increase in absolute expenditure in agriculture and irrigation, it is imperative to analyse the extent to which states have shown priority
towards the agricultural sector over the period. This is evaluated by constructing an
agriculture orientation index (AOI), based on the share of public expenditure in
agriculture and irrigation sector vis-à-vis its weight in the national income. As
shown in Table 6, the AOI has improved in many states with little increase at the
aggregate national level. The AOI was 0.60 in TE 1983–84 declined to 0.48 in TE
2003–04 and increased to 0.61 by 2015–16. A significant increase in AOI is witnessed only from mid 2000s (TE 2012–13) in Gujarat, Himachal Pradesh,
Karnataka, Kerala, Punjab, Chhattisgarh, and Uttarakhand but weakens in Haryana,
Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, West Bengal, and
Jharkhand. The AOI has moderately increased in Assam and Bihar. A low index in
most of the low-income states having high incidence of rural poverty and low land
and labour productivity is worrisome. It calls for increased budgetary outlays
towards agriculture and irrigation to invigorate the rate of growth of agriculture.
3
This may also be as the Indus system has covered almost all the eligible areas by late 1970s, and
the dominance of private tubewells has come up through introduction of paddy and free power
against paid canal water.
Estimating Efficiency of Public Investment in Irrigation ...
55