Pricing of Irrigation Waters in India

S P Sangal In recent times some doubts have been raised about retaining internal rate of return (IRR) as the sole test for acceptability of minor irrigation projects for bank financing in India. However, there is an urgent need to lay greater emphasis on cost of producing unit quantity of water at the water point and charging economic water rates. Any financial scrutiny should also examine the percentage of net income per crop which can support the cost of purchasing water for its maturity. High capital cost schemes are unable to support even the water cost, let alone leave any surplus. Thus analysis of income based supportable irrigation water rates per crop is a must for project acceptability by financial institutions.