Announcement of Thirty Five Million Dollars Credit for Irrigation in India on February 4, 1970

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 70/5 Subject: $35 million credit for February 4, 1970 irrigation in India A credit of $35 million froru the International Development Association (IDA) will finance about half the cost of completing the Kadana project for the irriga- tion of 700,000 acres in the State of Gujarat in west-central India. Agriculture generates about half of India's gross domestic product, provides employment for 70% of the labor force, and accounts for over half of export earn- ings. To increase agricultural productivity, efforts have been made in recent • years to introduce new technology, increasing the availability of the necessary inputs, and providing economic incentive.sl to encourage farmers to use these in- puts. As a result, the food-grain harvest in 1967/68 reached a record of over 95 million tons, and is expected to have been 94 million tons in 1968/69 despite less favorable monsoon conditions. Much still remains to be done to secure further increases in India's produc- tion of food grains. A critical need is an assured and timely water supply for more farmers. Despite substantial investments in new irrigation projects since the early 1950s, less than half their potential is being realized. The current Five-Year Plan gives major emphasis to the completion of ongoing irrigation projects~ The Kadana irrigation project reflects this approach, and incorporates the concurrent provision of all necessary complementary inputs. Kadana was started in 1954 as a run-of-the-river irrigation project but • progress has been slow, partially because of the scarcity of funds. Works now to be carried out include construction of a dam at Kadana on the Mahi River to create a storage reservoir; expansion of an existing irrigation system on the /more IDA P.R. No. 70/5 - Inrli.a-Irrigation - 2 - right bank from 350,000 acres to 650,000 acres; construction of a new irrigation system on the left bank to serve about 50,000 acres; water courses and field • channels throughout the project area; remodeling· and expansion of drainage systems; land leveling of about 100,000 acres; and the upgrading of existing roads and·construction of new village and farm-to-market roads, tntaling about 2,000 miles. Also included are training facilities for fanners; groundwater investigations; a study of water charges; and A trial land consolidation program. Assured irrigation in the monsonn season and increased cropping in the dry season will lead to intensified cropping patterns and higher yields in the Kadana area. At full production the net value of increased agricultural output will be equivalent to $27 million annually. The IDA credit will be extended to the Government of India which will make the funds available to the Government of the State of Gujarat. be for a term of 50 years, including a 10-year grace period. The credit will It will be interest- • free but a service charge of 3/4 of 1% will be made to cover IDA's administrative cos ts. The project is being carried out by the Irrigation and Roads Wings of tre Public Works Department and the Department of Agriculture of Gujarat. It is now scheduled for completion by mid-1975 at an estimated cost equivalent to $98 mil- lion. About $31.3 million of this amount has already been spent. The IDA credit will pr~vide $35 million of the $66.7 million still to be financed. The remaining costs will be met by the State of Gujarat to which the Government of India annually contributes development assistance through loans and credits. The Food and Agriculture Organization of the United Nations (FAO) assisted in the preparation of the project under the Bank/FAO Cooperative Program. • - 0 -