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Abstract
Financing for water projects, especially for irrigation, has been moving towards
collapse in recent years due to declining donor and government funding. Some Indian
states have undertaken innovative institutional reforms by setting up financially
autonomous corporations to mobilise required funds from the domestic bond market. This
analysis of the performance of one such corporation, Karnataka's Krishna Bhagya Jal
Nigam Limited, indicates that although adequate funds were mobilised, and physical
works are on schedule, the new institution did not attempt to enhance overall irrigation
performance and to move towards financial sustainability of the irrigation project. This
paper describes the background of this institution, its achievements, inadequacies and
potential of the innovative efforts made in irrigation financing reforms.