Improving water resource management in India's agriculture: Search for effective institutional arrangements and policy frameworks

• Indian Institute of Management, India
• University of South Australia, Australia
• Deakin University, Australia

Water resource management is critically important in India because of the growing demand for food and because the incomes and employment of 60-70 per cent of Indians depend on agriculture. Irrigation is a key feature of India's agricultural strategy, but it is not being used to its potential. In fact, the excessive and indiscriminate use of water has often resulted in substantial harm to the soil and reduced productivity. Unfortunately, water resource management in India is suffering. Surface water management requires heavy investment including meeting technical needs and environmental concerns. Groundwater management must reduce excessive pumping and address inadequate recharge of the watertable. There are simple, well-known technical and economic solutions to the problems, but institutional arrangements are complex and in need of support.
There is an urgent need to develop better and more socially acceptable institutional arrangements. This project identified institutions and policies that would promote the efficient and sustainable management of water resources in India. In the past 15 years, Australian water managers have accumulated a wealth of information on water institutions and legal reforms. As in India, Australian water management institutions must deal with several levels of government as well as different types of water use and water users. The lessons learned from the Australian experience were tested for applicability in the Indian situation.

The project is identifying institutions and policies that will promote the efficient and sustainable management of water resources in India.

The research team will examine the Indian water management crisis using economic theory, water policy law research and the lessons of Australian water reform. In particular, researchers will use 'new institutional economics' methods to find solutions that are socially acceptable, efficient, equitable and sustainable, rather than solutions that are based only on price. The research will focus on two main types of water supply initiatives (check-dams, which are small temporary dams constructed across a low-lying area or drainage ditch, and groundwater supplies such as wells) and two main types of user groups (irrigation cooperatives and associations of small farm water users). Studies will be carried out mainly in Gujurat, Maharashtra and Andhra Pradesh states.

Researchers will develop case studies, collect primary data, evaluate the history of experience, examine the legal framework, and set up focus group discussions with farmers using participatory rural appraisal methods. They will systematically analyse the information using statistical and modelling approaches and will disseminate the results through meetings, workshops, seminars, working papers and publications.

This project has tackled important problems in water policy for Australia and India in a systematic way. As early as the preliminary workshop in Beechworth in 2003, a logical basis for considering the features of successful irrigation institutions was developed, emphasising clear objectives, good (internal) interaction, flexibility to adapt, appropriateness of scale (particularly spatial and administrative) and compliance ability (with respect to internal and external controls).
In many parts of both countries, extraction of water from regulated and unregulated waterways and groundwater is greater than sustainable yield. That outcome should not be judged an unfortunate accident or result of unavoidable circumstances but has more to do with serious deficiencies in institutions and administration. The project has successfully incorporated insights from recent developments in institutional economics and explored the conditions under which improvements in administration can occur.
The major contribution of the project has been through detailed surveys of institutional arrangements in the Indian States of Gujarat, Maharashtra and Andhra Pradesh. Water scarcity is a characteristic of all these states. Different mixes of water institutions exist - for example, groundwater institutions and check dams are more prevalent in Gujarat and canal and river-lift cooperatives in Maharashtra State. Altogether 440 households were sampled including members and officials in the institutions with coverage of head end, middle and tail end irrigators (for canal irrigation).
The results of the surveys broadly confirm the predictions of New Institutional Economics with clarity of objectives, good interaction and adaptability explaining success and failure of institutions. Performance of institutions varied between institution type and state but not according to surface or groundwater.
The overall outcome from the project is productive research collaboration. Important research findings that could assist resolution of dilemmas facing policy makers in irrigation management in India and Australia include:
there needs to be devolution of power in irrigation management
where people have had responsibility for their own affairs, there has been some success provided there is sufficient integration with the body above
there are regional differences within India suggesting that a 'one shoe fits all' approach would not work
in some situations, there has been a lack of capacity to handle irrigation management suggesting a need for government intervention.
Broadly, the dilemma faced by policymakers in both countries is ongoing water scarcity in terms of the demands placed on it. Demand for water is running ahead of sustainable yield. For India, shortage of water is related mainly to demand for water for irrigation. In Australia, there is a new source of demand for water from those interested in (non-consumptive) environmental attributes of rivers and streams. In both cases, current institutional arrangements have failed so far to deliver a satisfactory solution. Neither group of researchers has direct access to the policy-making process, suggesting that implementation of research findings rely on the intellectual strength of their arguments and quality of communication to a wider audience rather than insider influence.