The World Bank has approved an assistance package of $485 million to Tamil Nadu so that the state can increase its agricultural productivity by modernising its irrigation infrastructure.
The Tamil Nadu Irrigated Agriculture Modernisation and Water-Bodies Restoration and Management Project is designed to modernise irrigation systems covering over 600,000 hectares in 63 selected sub-basins throughout the state.
"It proposes an integrated sub-basin approach to synergise the activities of multiple agencies involved with irrigation, on-farm development, agriculture, horticulture, marketing, livestock, fisheries, and applied research" the Bank has said in a release on Tuesday.
The Bank has further pointed out that home to about 62 million people living in 17 river basins the agriculture sector in Tamil Nadu faces major constraints due to poor state of irrigation infrastructure, water scarcity, groundwater overdraft, and pollution of surface and ground waters.
About 20-30 per cent of the rural population is classified poor and is heavily dependent on agricultural wages.
"Improved performance in agriculture and related areas can be the key to unlocking the tremendous potential of Tamil Nadu's rural areas," said Fayez Omar, senior manager, India Programme and acting World Bank Country Director for India.
"This project will help improve productivity of water in irrigated agriculture and promote diversification into higher-value, less-water
The project, according to the Bank, will place special focus on modernisation of tanks (traditional water bodies that are integrated into the state's irrigation systems) supported by a central initiative.
The Water Resources Organisation and Water User Associations would be strengthened to improve irrigation service delivery.
"In addition, the project aims to strengthen the institutional framework and tools for sustainable water resources management. Work will also be initiated on improving the management of the Cooum sub-basin that demonstrates unique urban-rural linkages and resource and water quality challenges," the World Bank said.
It has argued that some of the benefits from the project include increased area and reliability of irrigation, increase in production and profitability of foodgrains, oilseeds, pulses, fruits, vegetables, sugarcane, green fodder, milk and fish in inland water bodies.
Farm incomes are expected to rise in project area households, and it is estimated that about 50,000 rural farm jobs will be created.
The package comprises a $335 million loan from the International Bank for Reconstruction and Development and has 20 years to maturity including 5-years of grace period; and $150 million credit is provided by the International Development Association, the World Bank's concessionary lending arm and has 35 years to maturity and a 10-year grace period.
