WB okays $325m loan for Maharashtra water project

The World Bank has approved a loan of $325 million to finance the Maharashtra Water Sector Improvement Project (MWSIP).

The project seeks to strengthen the state's capacity for multisectoral planning, development and sustainable management of water resources. The loan is a variable-spread loan with a maturity of 20 years, including a grace period of five years.

The improvement in irrigation service delivery after the MWSIP is expected to boost agricultural productivity so that incomes increase by 49 per cent on average. About 33,610 farm families who are fully dependent on agriculture will be brought above the poverty line at the projects closure.

A senior state government official said: "We have already received Rs 1,700 crore towards the various ongoing irrigation initiatives in Maharashtra.

The current tranche of funds will help us tide over the recent slowdown in funding experienced in the irrigation sector."

He added that the World Bank was keen on evolving a consolidated approach to managing water resources in the state. People's participation as well as involvement in the planning process was made a pre-requisite to funding.

"We have already succeeded in not only creating a consensus amongst the villages over contributing to the projects, but also witnessed women taking an active role in pursuing the projects with their specific suggestions as is witnessed in Buldhana and other districts of the Vidarbha region," the official said.

The MWSIP comprises the following four components:

Water Sector Institutional Restructuring and Capacity Building. This component focuses on institutional reforms that will strengthen the state's capacity for multi-sectoral planning, development, and management of state's water resources on a river basin basis.

Irrigation Service Delivery and Management. This component will improve irrigation system performance and quality of irrigation service to farmers, promote effective participation of water user's associations in management of irrigation schemes, increase cost recovery, implement water entitlements, and raise the level of agricultural support services delivery.

It will also rehabilitate and modernize 286 selected irrigation schemes covering about 670,000 hectares of culturable command area, enhance the safety of 291 dams, help in capacity building of water users associations, improve water management practices and instruments, strengthen agriculture support services, and implement a social and environmental management plan.

Innovative Pilots. This component will support four user-centered aquifer level groundwater management and four innovative irrigated agriculture pilot projects.

Project Management. This component will support (i) a state-level Project Preparation and Management Unit, (ii) project monitoring and evaluation via an agency external to the Government of Maharashtra, and (iii) communications campaign to create awareness about the project initiatives and to build broad-based consensus and support for the Maharashtra State Water Policy and reform program.

The Maharashtra government official confirmed that the state was already considering the setting up of the regulatory authority as well as a tariff determining authority to affix rates for water.