Bengal. A low AOI in the poorer states indicates that an increased public investment in agriculture and irrigation is necessary to accelerate production.
Concomitantly, growing investments are not commensurate with the outcomes,
seen through less than 50% of net area irrigated, stagnancy in area irrigated by
public canals and large gaps in irrigation potential created and utilised. The
empirical results confirm large inefficiency in public irrigation expenditure across
the board. The canals operate at about 59% efficiency, although levels vary widely,
from 9.6% in Andhra Pradesh to 100% each in J&K, West Bengal, and Madhya
Pradesh. There is ample scope to improve efficiency in the public irrigation system
though a few states viz. Rajasthan and Odisha have demonstrated improvements
since 2000. Our results on slack indicate that the inefficiency is more due to capital
expenditure (i.e. investment) which should reduce by about Rs. 5905 per ha
through timely completion of projects. The inefficiency is much lower on account
of revenue expenditure at Rs. 499 per ha, suggesting a check on day-to-day
expenses. Low (technical) efficiency scores suggest that public irrigation is not well
placed, suggesting to explore potential for other sources of irrigation.
These results have implications for good governance and the fact that public
policy should focus more on outcomes rather than on outlays. Several studies
confirm that better irrigation governance can significantly improve the performance
of public irrigation system and hence agriculture productivity (Lio and Liu 2008;
Kannan et al. 2019). Appropriate measures have to be taken to complete the irrigation projects, divert resources towards minor and micro irrigation and bring
institutions for proper and timely delivery and distribution of water. Among many
reasons for poor performance of canal irrigation system, lack of funds for proper
maintenance has been considered as an important problem. It has supposedly been
arisen due to low user charges and poor collection mechanism resulting in low
recovery rate. Between TE 1985–86 and TE 2015–16, the operational expenditure
on major and medium irrigation schemes has increased by two and half times.
Receipt from these has also increased during this period. Although the increase in
receipts in absolute value is less than the operational expenditure, the rate of
increase in receipts is found to be much higher. Consequently, the recovery rate,
though low, has improved from 15.11% in 1985–86 to 21.63% in 2015–16 which
should be further improvised.
References
Banker RD, Charnes A, Cooper WW (1984) Some models for estimating technical and scale
inefficiencies in data envelopment analysis. Manag Sci 30(9)
Bathla S, Joshi PK, Kumar A (2020) Agricultural growth and poverty reduction in India: targeting
investments and input subsidies. Springer Nature, Singapore
Bhattarai M, Narayanamoorthy A (2003) Impact of irrigation on rural poverty in India: an
aggregate panel-data analysis. Water Policy 5(5–6):443–458
Boussofiane A, Dyson RG, Thanassoulis E (1991) Applied data envelopment analysis. Eur J Oper
Res 52(1):1–15
Estimating Efficiency of Public Investment in Irrigation ...
67
Concomitantly, growing investments are not commensurate with the outcomes,
seen through less than 50% of net area irrigated, stagnancy in area irrigated by
public canals and large gaps in irrigation potential created and utilised. The
empirical results confirm large inefficiency in public irrigation expenditure across
the board. The canals operate at about 59% efficiency, although levels vary widely,
from 9.6% in Andhra Pradesh to 100% each in J&K, West Bengal, and Madhya
Pradesh. There is ample scope to improve efficiency in the public irrigation system
though a few states viz. Rajasthan and Odisha have demonstrated improvements
since 2000. Our results on slack indicate that the inefficiency is more due to capital
expenditure (i.e. investment) which should reduce by about Rs. 5905 per ha
through timely completion of projects. The inefficiency is much lower on account
of revenue expenditure at Rs. 499 per ha, suggesting a check on day-to-day
expenses. Low (technical) efficiency scores suggest that public irrigation is not well
placed, suggesting to explore potential for other sources of irrigation.
These results have implications for good governance and the fact that public
policy should focus more on outcomes rather than on outlays. Several studies
confirm that better irrigation governance can significantly improve the performance
of public irrigation system and hence agriculture productivity (Lio and Liu 2008;
Kannan et al. 2019). Appropriate measures have to be taken to complete the irrigation projects, divert resources towards minor and micro irrigation and bring
institutions for proper and timely delivery and distribution of water. Among many
reasons for poor performance of canal irrigation system, lack of funds for proper
maintenance has been considered as an important problem. It has supposedly been
arisen due to low user charges and poor collection mechanism resulting in low
recovery rate. Between TE 1985–86 and TE 2015–16, the operational expenditure
on major and medium irrigation schemes has increased by two and half times.
Receipt from these has also increased during this period. Although the increase in
receipts in absolute value is less than the operational expenditure, the rate of
increase in receipts is found to be much higher. Consequently, the recovery rate,
though low, has improved from 15.11% in 1985–86 to 21.63% in 2015–16 which
should be further improvised.
References
Banker RD, Charnes A, Cooper WW (1984) Some models for estimating technical and scale
inefficiencies in data envelopment analysis. Manag Sci 30(9)
Bathla S, Joshi PK, Kumar A (2020) Agricultural growth and poverty reduction in India: targeting
investments and input subsidies. Springer Nature, Singapore
Bhattarai M, Narayanamoorthy A (2003) Impact of irrigation on rural poverty in India: an
aggregate panel-data analysis. Water Policy 5(5–6):443–458
Boussofiane A, Dyson RG, Thanassoulis E (1991) Applied data envelopment analysis. Eur J Oper
Res 52(1):1–15
Estimating Efficiency of Public Investment in Irrigation ...
67