IMPACT ANALYSIS OF PUBLIC INVESTMENT IN RIDF …

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IMPACT ANALYSIS OF PUBLIC INVESTMENT IN RIDF IRRIGATION PROJECTS

EMPLOYING MULTIPLE REGRESSION MODEL IN TAMIL NADU

S. NAGOOR ALI JINNAH1 & M.CHINNADURAI2

1Research scholar, Department of Agricultural Economics, CARDS*, Tamil Nadu Agricultural University, Coimbatore,

Tamil Nadu, India

2Professor (Retd.), Department of Agricultural Economics, CARDS*, Tamil Nadu Agricultural University, Coimbatore,

Tamil Nadu, India

*CARDS – Centre for Agriculture and Rural Development Studies

ABSTRACT

The augmentation of irrigation and water management infrastructure is the key to doubling income of the farms in

Tamil Nadu, like a water stressed state. The present study has been taken up in to gather research evidence to encourage

improved and effective public investment in irrigation sector. The primary data on the impact of selected five RIDF

projects in three river basins was analyzes using multiple regression analysis. The resultant model has a good regression

fit with independent variables namely additionality of water days, incremental cropping intensity and incremental crop

yield influencing farm income leading to 35 per cent higher income for the farmers in the project areas. Off budget

borrowings by state government, creation of dedicated maintenance fund and effective functioning of water users

association will lead to improved outlays and more effective public investment in irrigation towards securing farmers

prosperity in Tamil Nadu.

KEYWORDS: Impact Analysis, Public Investment, Irrigation Projects & Multiple Regression

INTRODUCTION

The farmers’ prosperity is one of the avowed objectives of the Government of India (GoI) and Government of

Tamil Nadu (GoTN) and this is a mandate of National Bank for Agricultural and Rural Development (NABARD).

Irrigation infrastructure is a key public investment priority for the GoTN in the water stressed state where 92 per

cent of surface water and 85 per cent of ground water have been already exploited. Among the various funding

options available before GoTN in financing the irrigation infrastructure, the Rural Infrastructure Development Fund

(RIDF) line of funding from NABARD is the most attractive option and the state government has made judicious

use of the funding arrangement for the benefit of farmers. Prioritized public investment in irrigation and water

management projects through conjunctive use of budgetary resources and borrowing from financial institutions like

NABARD is the key to improve farmers’ income. This research study has been taken up in the context of increased

importance attached to irrigation infrastructure and declining pubic investment infrastructure in the sector amidst

the national priority of doubling farmers’ income by 2023 and to have research evidence to encourage improved

and effective public investment in irrigation sector. The major research objective was to analyze the impact of

public investment with specific reference to irrigation under RIDF of NABARD on farmers’ income in Tamil Nadu.

Orig

ina

l Article

Received: Jan 18, 2021; Accepted: Feb 08, 2021; Published: Feb 13, 2021; Paper Id.: IJASRJUN20218

International Journal of Agriculture

Science and Research (IJASR)

ISSN (P): 2250–0057; ISSN (E): 2321–0087

Vol. 11, Issue 1, Jun 2021, 65-72© TJPRC Pvt. Ltd.

Impact Factor (JCC): 8.3083 NAAS Rating: 4.13

Rural Infrastructure Development Fund (Ridf) Progress

The GoI announced in the budget of 1995 – 96, the scheme for setting up of RIDF to be operationalized by NABARAD for

ongoing infrastructure projects particularly incomplete irrigation and projects. The RIDF is in the 25th Year of its existence

and over the years has emerged as the most popular and sought after fund as (i) it has the cheapest cost of funds ( bench

marked to Bank Rate fixed by RBI) currently available at historically low rates of nearly three per cent per annum (p. a.)

(ii) it is available without much lead time and foreign exchange risk and (iii) offers the advantage of proper appraisal and

monitoring by NABARD. The funds are announced by GoI and allocated by RBI from the commercial banks resources,

calculated on the basis of shortfall in priority sector advances stipulated, and NABARD gets the funds at Bank Rate minus

two per cent interest rate and lends it to the State Governments at Bank Rate minus one point five per cent to be repaid in

seven years with one to two years moratorium. Since the annual allocations are limited (currently about Rs. 28,000

Crores), NABARD makes a State wise annual Normative Allocation based on a matrix of indicators spanning physical ,

social and financial parameters.

RIDF, commencing with an initial corpus of Rs. 2,000 crores in Tranche RIDF – I, is currently in its Silver

Jubilee year with annual corpus reaching a level of Rs. 28000 crores during RIDF – XXV in 2019 – 20. The cumulative

allocations has reached the level of Rs.3,48,500 crores, (including loan for Bharat Nirman), with 37 eligible activities.

Irrigation constituted the largest share of 51 per cent in terms of projects (13526 projects sanctioned) and in terms of

funding, the share of irrigation infrastructure ranged from 30 – 37 per cent of the pie.

As per annual report of NABARD 2019–20, the RIDF funding has created /stabilized/modernized an irrigation

command area of 341 Lakh ha (almost 50 per cent of net irrigated area of 680 lakh ha) contributing to the additional value

of production at Rs.57,427 Crores and non recurring employment of Rs.1,401 Crores man days on a cumulative basis as at

the end of March 2019.

Evaluation Study Findings on Ridf Impact

Kumbhare, S.L. and Madhumitha Sen (2008) in their research article evaluated irrigation projects under RIDF and

concluded that the net benefits realized by farmers have been found fairly high in UP, Haryana, Maharashtra and Assam. It

suggested formation of Water Users Associations (WUAs) envisaged under RIDF for effective water distribution and

maintenance.

The impact Evaluation done by Chinnadurai, M. et al. (2015) of Tamil Nadu Agricultural University studied the

ex-post impact of irrigation projects using double difference method selecting 21 irrigation projects spread across 11

districts. The study concluded that there are significant impact of irrigation system to supply adequate water to tail end

areas, shift in cropping pattern and increase in yields and increase in ground water recharge.

The impact evaluation done by Vinod Annigeri et al (2016) of CMDR, Dharwad found an overall impact of

agricultural income at 140 per cent and yield of major crops at 143 per cent. The improvement was also seen in live stock

holdings. The study suggested formation of Water Users Association training in conjunctive use of water, and focus group

association with stakeholders for timely and effective of the project.

The impact evaluation done by IIT, Kharagpur Team, Dr Pulakh Mishra et al (2016) brought out significant

improvement in cropping intensity agricultural production, decline in crop loss, greater crop diversification etc. It recorded

that vegetable production increased by around 60 per cent and sesame by around 25 per cent and the household income

66 S. Nagoor Ali Jinnah & M.Chinnadurai


from agriculture increased by about 25 after the RIDF project implementation. The study underlined the need for

availability of systematic data, joint supervision of the projections including community and maintenance mechanism.

METHODOLOGY

Under RIDF projects funded to State of Tamil Nadu, five irrigation projects in five districts were selected purposively with

the intention that the projects should cover at least three major river basins in TN viz. Thamirabarani, Vaigai-Gundar and

Cauvery. The other criteria kept in mind while selecting the projects included (i) The projects should have an outlay of

about two crores rupees or above with ayacut stabilization of about 200 acres or more (ii) The projects should cover

various types viz. check dams, anaicuts for water augmentation but also projects which helps as supply channels and those

arresting sea water intrusion (iii the projects should cover both river command and tank command and (iv) the projects

should have completed a range of six years since execution, say two to six years, so that the stabilization impact could be

established it is presented in (Table1)

Within the projects, the farmers whose ayacut lands were stabilized were reckoned as “Beneficiary Farmers” and

farmers in these villages whose lands did not get any additional irrigation benefit with the commissioning project (as their

lands were not covered in the stabilized ayacut) were considered as “control farmers”. In each project 60 beneficiary

farmers and 30 control farmers were interviewed. In addition, information was also collected from Executive Engineers of

PWD – Water Resources Department in Cauvery, Thamirabharani, Gundar-Vaigai river Basins which was supplemented

with interaction with personnel of Public Works Department PWD–WRD and Laskars / Neerkanis who work at grass root

level to validate the views of the farmer respondents.

The data was analyzed using statistical and econometric tools such as Pearson coefficient and multiple linear

regression models.

Table 1: Details of Projects Selected for Study

Sl.

No. District River Basin Name of the Project

Stabilized

Ayacut (ac)

Year of

*completion

(RIDF Tranche)

Cost of

Project

(in lakhs)

1 Tiruchirappalli Ariyar in Cauvery Basin

Check dam across Ariyar river in Ammapettai village

of Trichy district

340 2015

(RIDF XX) 306

2. Thanjavur Nariyar in Cauvery basin

Anaicut across Nariyar river on Alivalam village in Thanjavur district

473 2017

(RIDF XXI) 373

3. Madurai Vaigai Basin

Formation of Branch channel to Nedumadurai and Thottiyarpatti tanks in

Thirupparankundram Taluk of Madurai district

358 2014

(RIDF XX) 654

4. Thoothukudi Thamirabarani Basin

Check dam in Thamirabarani river in Mukkani Village of Thoothukudi district

990 2014

(RIDF XXI) 2575

5. Pudukottai Koraiyaru Sub basin

Check dam across Koraiyar river at Kulathur Taluk of Pudukottai district

284 2016

(RIDF XII) 200

*year of completion and RIDF Tranche need not correlate in view of phasing and delay in execution Source: Reports of Respective Districts

Impact Analysis of Public Investment in Ridf Irrigation Projects Employing Multiple Regression Model in Tamil Nadu 67


RESULTS AND DISCUSSIONS

Benefits from Projects and Operational Issues

As much as 76 per cent of beneficiary group interviewed were in the 31-50 years age group and almost 40 per cent of the

beneficiaries were illiterate and 35% had primary education with only 13 per cent population as graduates. The 65 per cent

of beneficiary families had a family size of more than four. A predominant category of farmers benefitted belonged to

small and medium category in terms of size of landholding (81 per cent) with less than four ha of land holding. Majority of

the farmers grew paddy (69 per cent) and pulses (22 per cent) followed by groundnut.

The major benefits experienced by the beneficiaries included the following: (i) assured supply water increased

from 45 – 60 days up to 170 days depending on the project, stabilizing the ayacut (ii) there was good ground water

recharge of wells(iii) this has encouraged them to go in for at least two cropping seasons from one earlier in case of many

farm households(iv)these was a marked increase in the yield of crops (v) in projects taken up near estuary area

(Thoothukudi district), good quality water was assured arresting sea water intrusion resulting in higher yield and farm

income. Interaction with beneficiaries and implementing officials revealed many operational issues involving lack of

maintenance fund, inadequate staff at grass root level, non-functioning of water users associations, considerable delay in

financial sanction of projects, variance in additionality of water days due to uncertain rainfall etc.

OVERALL IMPACT OF THE FIVE PROJECTS SELECTED

It may be seen from the results of the five projects, that there has been good stabilization of ayacut due to additionality in

water days which enabled them to increase the cropping intensity from 30 per cent to 120 per cent with average ICI as 66

per cent. They also reported higher yield and incomes ranging from 18 per cent to 52 per cent and 18 to 62 per cent

respectively. The summary position of the variables before and after the project is as follows, which is pictures in the form

of a radar graph.

The overall aggregate of all 5 projects (data of 300 sample farmers) indicated that there was significant

improvement in additionality of irrigation water days and cropping intensity. The overall variance in X and Y variables for

all 5 Projects selected is presented in Table 2.2.

Table 2.1: Variance in X and Y Variables for all 5 Projects

S.No Variables Before After

1. Farm Income 100 135

2. Cropping Intensity 100 166

3. Crop Yield 100 128

4. Water Days 80 167



Figure 1: Overall Impact of Five Projects

Table 2.2: Variance in X and Y Variables for all 5 Projects

S.No Variables in Per cent Range

(Per Cent)

Average

(Per cent)

1. Additionality in Water Days (AWD) (days) 70-100 days 87 days

2. Incremental Cropping Intensity (ICI) 30 -120 66

3. Incremental Cropping Yield (ICY) 18 – 52 28

4. Incremental Farm Income (IFI) 18 - 62 35

A Graphical Representation of the variance is presented in Chart 1

*The first segment (S.No.1-60) relates to Madurai District, (S.No.61-120) relates to Thoothukudi district,

(S.No.121-180) relates to Trichy district, (S.No.181-240) relates to Thanjavur district, (S.No.241-300) relates to

Pudukottai district.



While the variance in availability of additionality was largely determined by the factors of location of the farm

(e.g. tail end) and ownership of wells, the cropping intensity varied largely on account of, apart from additionality of water,

on factors such as financial position, fulltime or absentee farming etc. As regards the incremental crop yield, apart from

additionality of water days, factors such as water management and package of practices adopted by individual farmers

contributed to the variance. In respect of Thoothukudi project, Since Thamirabharani is a perennial river, the impact of the

check dam on Cropping Intensity was not as much as other projects in view of already stabilized ayacut due to the

perenniality of the river as well as the fact that some annual/perennial crops such as Banana, Areca nut was also grown and

therefore Thoothukudi project stands out as compared to other district segments. Similarly in Check dam in Pudukottai the

incremental farm income was relatively lower on account of relative volatility in additionality of water as compared to

other check dams.

CORRELATION AND MULTIPLE REGRESSION ANALYSIS

It was postulated that all the 3 X variables viz. AWD (additionality in water days), Incremental Cropping Intensity (ICI),

Incremental Crop Yield (ICY) contributed to the incremental farm income (IFI). The Pearson correlation explaining the

relationship among X variable and Y variables in all the 5 Projects in aggregate (300 Sample farmers) has been worked out

using CORREL function of MS Excel and the results for the project is presented in table 3 as follows:

Table: 3: Correlation Analysis

S.No IFI ICI ICY AWD

1. 1

2. 0.792 1

3. 0.580 0.474 1

4. 0.402 0.486 -0.041 1

It may be observed that all three X variables ICI (0.792), ICY (0.580), AWD (0.402) had a positive correlation

with y variable, i.e., farm income.

Keeping the foregoing discussions, a Multiple Regression function was fitted using MS Excel Analytical tool

pack with the following variables.

Y= farmers income (dependent variable)

X1 = additionality in assured water days (days) (independent variable)

X2 = incremental cropping intensity (%) (independent variable)

X3 = incremental crop yield (%) (independent variable)

The results indicated a good fit of Multiple Regression and the findings of the regression model are presented in

Table 4.



Table 4: Summary Findings of the Regression Analysis – Overall Impact of Selected 5 Projects

Variables Coefficient values t-Value p-Value

Intercept -20.20 - -

X1 0.26 10.35 1.24E-21

X2 0.76 15.67 1.01E-40

X3 0.18 2.92 0.00

R2 0.62 - -

Adjusted R2 0.62 - -

VIF 2.64 - -

F-Value 165.07 - 0.00

Model Equation: Y = -20.203 + 0.267 X1* + 0.769 X2* + 0.187 X3*

Where, * Significant at 1 per cent level

It can be observed from the table that all the three independent variables have significant influence on the

dependent variable. All three X Variables (X1—Incremental Cropping Intensity in per cent), (X2 – Incremental Crop Yield

in per cent) and (X3—Additionality in Water Days in terms of No. of days) are positively associated with Y, the dependent

variable, i.e., Incremental Farm Income. Therefore, with 1 unit change in X2, Y changes by 0.76 units. Similarly, with 1

unit change in X1, Y changes by 0.26 units. Further, with one unit change in X3, Y changes by 0.18 units. The Variance

Inflation Factor (VIF), a measure of multi-collinearity at 2.64, is found to be in the tolerance limit. Collectively these three

variables explain about 62 per cent of the variation in the dependent variable. The F-statistic is found significant at one

percent level, which suggests that there exists a strong association between the dependent variables and the independent

variable. Thus, the model is found satisfactory.

CONCLUSIONS

The results of the study on impact of RIDF-NABARD irrigation projects in selected districts of Tamil Nadu using multiple

regression model evidences significant 35 per cent of increases farmers’ incomes. The model indicated that independent

variables namely additionality of water days (67 per cent), incremental cropping intensity (66 per cent) and incremental

crop yield (28 per cent) had significantly influenced the farmers’ incomes positively. Creation of project maintenance fund,

effective functioning of water users associations and decision support system based optimization and off budget

borrowings by the state government will help improve outlays and effectiveness of public investment in irrigation

infrastructure towards securing farmers prosperity in Tamil Nadu.

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