The drought situation in Maharashtra has attracted some amount of political attention, with the Union government announcing a Rs1,207 crore debt relief package in March. This is apart from relief measures announced by the state government. While experts have flayed the mismanagement of the situation by the state government, they continue to demand more aid and efficient allocation of water resources to alleviate the problem.
In the case of Maharashtra, calls for government action should persuade even the staunchest supporters of benign government intervention to do a rethink.
First, as many reports already suggest, rain has not failed the state in any substantial manner for blame to be assigned on the monsoon. Water from the huge, multi-crore irrigation projects has eluded farmers for years. This is despite the allocation of huge amounts of public funds to these projects. In the case of public projects like these, the incentives for recuperating investments are essentially nil. So these projects remain in a standstill for years, while contractors with political influence benefit throughout with the flow of more public funds.
Second, while small farmers are in utter distress, in total contrast, sugar farms and factories owned by politicians even in drought-affected areas manage to receive ample water supply. This falls right on the face of advocates of government welfare who think governments can act in a benign, neutral fashion and improve the welfare of citizens. What they end up with is always very different from their intended plan. But one lesson is never learnt: when governments take charge of allocating resources, politicians acting as self-interested rational agents siphon off these resources for their own personal benefits. This is quite visible in Maharashtra’s arid regions.
The water supply system in India is almost under government control, which effectively means that there is no efficient way for farmers to buy water in an honest manner through the market. In such a system, it is the politically connected who are set to gain, not the farmers.
Does India need to privatize its water systems? Tell us at email@example.com