ANNUAL REPORT ON IMPLEMENTATION OF ACCELERATED IRRIGATION BENEFIT PROGRAMME As on March, 2011 SRIRAMASAGAR PROJECT(STAGE-II), ANDHRA PRADESH Government of India Ministry of Statistics and Programme Implementation Infrastructure and Project Monitoring Division Sardar Patel Bhavan, Sansad Marg New Delhi-110001 ANNUAL REPORT ON IMPLEMENTATION OF ACCELERATED IRRIGATION BENEFIT PROGRAMME (AIBP) AS ON MARCH, 2011 Government of India Ministry of Statistics and Programme Implementation Infrastructure and Project Monitoring Division Sardar Patel Bhavan, Sansad Marg New Delhi-110001 ACCELERATED IRRIGATION BENEFIT PROGRAMME (AIBP) HIGHLIGHTS AS ON MARCH, 2011 1. CLA/Grant released (1.4.1996-31.3.2011) : Rs.48566.5756 crore 2. No. of Projects covered under AIBP : 287 since 1996-97 3. No. of projects completed between : 136 (1.4.1996-31.3.2011) 4. Target Irrigation Potential of AIBP : 11929.2611Thousand projects hectare 5. Cumulative Irrigation Potential under : 6426.712 Thousand AIBP created up to 2011 hectare 6. Irrigation Potential created under AIBP : 1587.804 Thousand up to March 2011(Based on 85 projects hectare reviewed by CWC) 1 CONTENTS Sl.No. Items Page PART – I 1. Background and Policy Framework 3 2. Central Loan Assistance 3 3. Overview of the AIBP implementation since inception 5 4. State-wise Summary of CLA/Grant released 6 5. Irrigation Potential Created 7 6. Status of AIBP Implementation in 2010-11 7 7. Reasons for time and cost overruns 8 8. Benefits of the AIBP Scheme 8 PART – II 9. Central Loan Assistance/Grant released from 1996-97 Annexure-1 to 2010-11. 10. State wise Summary of CLA/Grant released. Annexure-II 11. Project wise Summary of the Irrigation Potential A Annexure-III created till March, 2011. 12. State wise Summary of the completed AIBP projects. Annexure-IV 13. Ultimate Irrigation Potential Created up to March, 2011 under Bharat Nirman. Annexure-V 14. Status of projects in brief. Annexure-VI 15. Project-wise Exception Reports. Annexure-VII 2 ACCELERATED IRRIGATION BENEFIT PROGRAMME (AIBP) 1. Background and Policy Framework The irrigation projects in our country were formulated, executed and funded by the State Governments/UTs from their own resources as irrigation is a State Subject under the Constitution. However, in 1996, a review of the status of implementation and nature of major and medium irrigation projects in the country, inter-alia, revealed that a large number of these projects were languishing for want of adequate funding by the concerned State Governments. As a result, the envisaged irrigation potential was not available to the farmers. There were 162 Major, 240 Medium and 74 Extension/Renovation/Modernisation (ERM) on-going irrigation projects in the country at various stages of completion at the end of the VIII Plan (i.e. 1996-97) with a spillover cost of Rs. 79,321.39 crore. This was felt as a matter of grave concern and that initiatives were required at the national level to remedy the situation. Since irrigation projects are capital intensive, and states with limited resources found themselves unable to meet the desired fund demands of all the projects, the implementation of these projects got delayed. In this background, the Government of India launched the Accelerated Irrigation Benefits Programme (AIBP) during 1996-97 to provide Central Loan Assistance (CLA) to major and medium irrigation projects in the country to accelerate the completion of on-going irrigation/multi-purpose projects ( on which substantial progress had been made but the actual completion was beyond the resource capability of the State Governments) so that irrigation benefits from the projects are realized. Under the AIBP, only those projects, which have the investment clearance of the Planning Commission, are eligible for inclusion. The projects receiving assistance from other financing agencies such as NABARD etc. are not eligible. However, the components of such projects not covered under the assistance of NABARD could be included under the AIBP. Assistance to large projects is given for their phased completion so that benefits could start flowing early with comparatively smaller investments. The projects on which more than 50% of the estimated expenditure has already been incurred get higher priority. Other cases are considered only if funds are available after meeting the demands of priority projects. Eligible projects benefiting tribal/drought prone areas are given due preference. Priority is also given to inter-state projects and the concerned states get assistance under the programme individually. The projects with larger irrigated area per unit of additional investment are preferred. 2. Central Loan Assistance (CLA) 2.1 Initially, the Central Loan Assistance (CLA) to the States was given on matching basis and released in two installments of 50% each. The second installment was released after the State had incurred expenditure equal to 70% of the first installment of CLA together with the State’s share and submission of utilization certificate. In case of Special Category States (North Eastern and hilly States of HP, Sikkim, J&K and projects benefiting Kalahandi, Bolangir and Koraput (KBK) districts of Orissa), the State Governments were required to contribute only 50 % of the CLA released. However, the Government of India relaxed the funding pattern in 1999-2000. As per the revised guidelines, from 1999-2000 onwards, Central loan Assistance could also be extended to 3 minor surface irrigation schemes (both new and ongoing) in Special Category states and KBK districts of Orissa. Further, funds were provided to the States in the ratio of 2:1 (Centre: State) for general category states and 3:1 (Centre: State) for Special Category states. Besides, major/medium irrigation schemes even in initial stages of construction in drought prone KBK districts of Orissa could now be included under the programme. No CLA was being provided to meet the establishment cost earlier. But as per the guidelines effective from 02/2002, up to 15% of CLA could be provided for meeting the establishment expenditure to be adjusted against the State’s share. To facilitate the construction works, the first installment, which is normally 50% of CLA sanctioned during the year, was released in advance whereas the second installment of CLA was to be released only after the State had incurred the expenditure on AIBP components of the selected project equivalent to the sum of the CLA released and corresponding contribution by the State. Later it was decided that 30% CLA to Non-Special Category States and 90% for Special Category States is converted into grants. 2.2 The Central Loan Assistance was given in the form of a loan at the rate of interest prescribed by the Ministry of Finance from time to time. The loan under the Programme is repayable in 20 equal installments together with interest on the outstanding balance commencing from the following year. However, 50% of the loan enjoys 5 years initial grace period after which repayment of the loans is effected in 15 equal installments. The loan amount payable in a year is recovered in 10 equal monthly installments commencing from the month of June. 2.3 The assistance provided under AIBP was treated as part of the State Plan Resources. Accordingly, State-wise financial projections for AIBP funding were made while finalizing the State annual Plans. The Planning Commission determines the size of the State Plans. The Ministry of Finance sanctions the CLA / grant to the States after approval by the Ministry of Water Resources subject to the State-wise ceiling fixed by the Planning Commission. 2.4. In the year 1999-2000 larger Central assistance to those States which could rationalize their water rates to cover at least Operation & Maitenance costs were announced. As per the guidelines effective from 1.4.2004, special provisions were made for the relaxation of CLA for the projects of such states, which were categorized as Reforming States. 2.5. In March, 2005 in order to accelerate the provision of irrigation to drought prone areas and tribal areas, the project providing irrigation benefits to such areas were extended (in consultation with Planning Commission). The same facility as allowed to the Special Category States. From April, 2005, the Centre is providing only grant assistance to the projects under AIBP and the rest of the funding is to be raised by the States themselves, either through Plan allocations or State resources or loans. 2.6. The new AIBP criterion was approved by the Cabinet in November 2006 and new guidelines were circulated in December 2006. The relevant extracts of the relaxation in criteria are as under: (a) All the approved projects in (a) drought-prone areas, (b) tribal areas, (c) States with lower irrigation development as compared to National average and (d) 4 districts identified under PM’s package for agrarian distress, should be provided support under AIBP in relaxation of 1:1 criteria i.e., taking up of another project in the State after completion of one ongoing project will remain applicable. (b) The sanctioned grants to be released in two installments, the first based on projected outlay and the second after confirmation of expenditure. The grant component amounting to 90% of the total grant sanctioned will be released immediately and the balance 10% of the grant when 70% of the agreed expenditure is incurred. (c) Removing distinction of fast track projects, reforming and non-reforming States, the release of grant of 25% of Project Cost for all irrigation projects in Non- Special Category states and 90% for Special Category states is made. (d) Stipulation of 100 hectare in respect of surface water minor irrigation schemes predominantly benefiting backward regions has been brought down to 50 hectare. The stipulation of 10% beneficiary contribution in cost for post construction maintenance for Surface Water Minor Irrigation Schemes benefiting backward regions in Non- Special Category States is also done away with.