WASHINGTON, September 7, 2004 -- The World Bank approved today a US$396 million loan to assist the state of Madhya Pradesh, located in the central part of India, in improving the productivity of water for sustainable growth and poverty reduction.
The Madhya Pradesh Water Sector Restructuring Project will benefit more than two million people living in selected river basins (Chambal, Sindh, Betwa, Ken and Tons) through improved productivity of water leading to increased irrigated agriculture and creation of substantial both on-farm and non-farm employment opportunities.
The economy of the state of Madhya Pradesh, with a population of 60 million, is dominated by agriculture which accounts for 35 percent of the state's GDP, and 80 percent of the labor force . More than one third of the population belong to socially and economically disadvantaged groups consisting of scheduled tribes and scheduled castes. The proportion of the poor is substantially higher among the tribal population. Poverty also has gender dimensions. The key challenge to reduce poverty and promote economic growth in the state resides in the sustainable management of water and related natural resources, with participation and consideration of social and gender issues.
This loan will assist the state of Madhya Pradesh in implementing institutional reforms geared towards sustainable and optimal water resources management and improved reliable irrigation service delivery in accordance with the National Water Policy and the State Water Policy.
"The large accompanying investments in modernization of existing irrigation assets coupled with effective agricultural intensification and diversification,will benefit about 500,000 people currently living below poverty line," says Srinivasan Raj Rajagopal, a Lead Water Resources Specialist with the World Bank. "We expect that by the end of the project implementation period, these people will be above the poverty line." He added that overall about 2 million people will benefit from the project and with a substantial increase in the annual production of cereals, soybean, pulses, oilseeds, fruits, vegetables and spices at project completion.
The loan will finance: (i) the establishment and operationalization of planning, allocation and regulatory institutions and instruments at the state and basin-levels; (ii) institutional reforms and measures related to delivering irrigation services at reasonable cost by financially viable entities; (iii) rehabilitation and modernization of selected existing irrigation and drainage assets in the five river basins covering about 620,000 ha of command area distributed in about 654 large, medium and small schemes; (iv) provision of supplies and extension services for agricultural intensification and diversification, horticulture, veterinary services and development of fisheries associated with the irrigation and drainage assets being modernized; and (v) the coordination of project implementation activities.
The proposed project is in line with the World Bank's Country Strategy for India focusing on sustainable growth and poverty reduction, and will substantially reform the water sector and irrigation sub-sector to maximize productivity of water in a people-centered, integrated river basin approach to improve rural and urban livelihoods.
For more information on World Bank activities in India, please visit: http://www.worldbank.org/in