Announcement of Thirty-Nine Million Dollars Credit for Agriculture in India on August 20, 1971

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W .. WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 ~ .. IDA Press Release No. J "' I .Li JO $39.0 million credit for August 20ii 1971 agriculture in India The International Development Association (IDA) is providing $39.0 million to finance part of the cost of corapleting the first phase of the Pochampad irrigation scheme at the Godavari to irrigate initially about 250,000 acres in the State of Andhra Pradesh in southern India. Sub- sequent phases will ulti::ia.tely enable 988,000 acres to be irrigated. • The schet·ie is an important element in India's strategy to sustain the momentum of growth in the agricultural sector. India has given high priority to increasing foodgrains output, essentially through the use of new and much more productive types of seed in corr.bination with increased inputs of complementary factors such as fertilizer, pesticides:; water and better incentives to the farmer. As a result, foodgrain production reached a new record of 100 million tons in 1969/70, an increase of 5% over the previous year. In order to achieve its goal of self-sufficiency in foodgrains, India is striving to achieve a more effective utilization of the country's water resources through additional investments and better on-farm usage, and the Fourth Five-Year Plan (1969-74) gives major emphasis to the completion of ongoing irrigation projects. The Pochampad scheme reflects this approach, and incorporates the concurrent provision of all necessary complementary inputs. /more  IDA P.R. No. 71/36 -- India -- agriculture • - 2 - The Pochampad scheme was started in 1964. Progress, however, has been slow, partly because of the scarcity of funds. Works now to, be carried out .. under the first phase of the scheme include completion of construction of a nine mile long dam on the Godavari river to create a storage reservoir; a main canal and a distributary system to serve 247,000 acres along the right bank of the river; improvement of the drainage system; land levelling; and cor~truction of 285 miles of new village and farm-to-market roads. The credit needs of farmers in the project area will be met by the Land Mortgage Bank of Andhra Pradesh to which IDA granted a credit of $2L~. 4 million, in January 19 71. Assured irrigation will enable agricultural activities to be intenstfied in an area presently dependent upon an uncertain rainfall and bring about a substantial increase in farm income. lion per annum. At full development the increase in agricultural output resulting from the project will be equivalent to $33 mil- The IDA credit will be extended to the Government of India which will • make the funds available to the Government of the State of Andhra Pradesh-. The credit will be for a term of 50 years, including a 10-year grace period. It will be interest free, but a service charge of 3/4 of 1% will be made to cover IDA's administrative costs. The first phase of the scheme is being carried out by the Public Works and Agriculture Departments of the Andhra Pradesh State (Hyderabad, India) and is scheduled for completion by June 1976 at a total estimated cost equivalent to $127 million. About $36 million equivalent had already been spent. The IDA credit will provide $39 million of the $91 million still to • be financed. The remaining costs will be met by the State of Andhra Pradesh to which the Government of India annually contributes development assistance through loans and credits. - n - ......•..