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economics of on-farm development - Institute for Social and ...

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investment has acquired aut<strong>on</strong>omy <str<strong>on</strong>g>of</str<strong>on</strong>g> its own so that it can c<strong>on</strong>tinue to grow<br />

without the stimulus <str<strong>on</strong>g>of</str<strong>on</strong>g> public investment J .<br />

Yet another argument in respect <str<strong>on</strong>g>of</str<strong>on</strong>g> the debate is that, since the benefits <str<strong>on</strong>g>of</str<strong>on</strong>g><br />

canal irrigati<strong>on</strong> are spread over a l<strong>on</strong>g period, the complementarity would persist,<br />

as l<strong>on</strong>g as the stream <str<strong>on</strong>g>of</str<strong>on</strong>g> benefits c<strong>on</strong>tinues. In such cases, the reducti<strong>on</strong> in public<br />

investment may not be coincided with a reducti<strong>on</strong> in <strong>farm</strong> level sec<strong>on</strong>dary<br />

investments by the <strong>farm</strong>ers. In fact, Dhawan (1998) reports a high degree <str<strong>on</strong>g>of</str<strong>on</strong>g><br />

associati<strong>on</strong> between canal irrigati<strong>on</strong> <strong>and</strong> private capital <strong>for</strong>mati<strong>on</strong> as revealed by<br />

the high correlati<strong>on</strong> coefficient (r= 0.65), followed by the elasticity <str<strong>on</strong>g>of</str<strong>on</strong>g> private<br />

fixed capital <strong>for</strong>mati<strong>on</strong> in canal irrigated areas to the extent <str<strong>on</strong>g>of</str<strong>on</strong>g> 0.25.<br />

Thus, a brief review <str<strong>on</strong>g>of</str<strong>on</strong>g> important studies <strong>on</strong> the impact <str<strong>on</strong>g>of</str<strong>on</strong>g> irrigati<strong>on</strong> <strong>on</strong><br />

<strong>farm</strong> output <strong>and</strong> incomc as well as the complementarity between public<br />

investment in canal irrigati<strong>on</strong> <strong>and</strong> private <strong>farm</strong> level investments show that canal<br />

irrigati<strong>on</strong> has been an important source <str<strong>on</strong>g>of</str<strong>on</strong>g> growth to India's rural ec<strong>on</strong>omy in<br />

terms <str<strong>on</strong>g>of</str<strong>on</strong>g> its linkage effects. However, canal irrigati<strong>on</strong> in India has not been<br />

without any problems, which has even put the future course <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>development</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />

irrigati<strong>on</strong> systems at stake.<br />

2.2 Studies <strong>on</strong> organisati<strong>on</strong>al aspects <strong>and</strong> operati<strong>on</strong>al c<strong>on</strong>straints in<br />

irrigati<strong>on</strong> <strong>development</strong> in India:<br />

Irrigati<strong>on</strong> <strong>development</strong> in India is c<strong>on</strong>strained by many problems. The challenges<br />

<str<strong>on</strong>g>of</str<strong>on</strong>g> growing water scarcity are exacerbated by increasing costs <str<strong>on</strong>g>of</str<strong>on</strong>g> new water<br />

J Whi Ie Dhawan (1996) <strong>and</strong> Rao ( 1997) indicated a positive relati<strong>on</strong>ship between power/<br />

rural electrificati<strong>on</strong> as well as gross capital <strong>for</strong>mati<strong>on</strong> in agriculture (GCFA), Ch<strong>and</strong>'s<br />

(2000) analysis fails to capture the inducement effect (Gulati <strong>and</strong> Bathla. 2001).<br />

41

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