New Delhi: The government plans to raise Rs86,000 crore ($12.6 billion) in overseas loans to fund irrigation projects after two consecutive years of deficient rains cut crop output in Asia’s third-biggest economy.
State-owned National Bank for Agriculture and Rural Development may helm the borrowing plan that is expected to help add as much as 1.3 crore hectares (32.1 million acres) of irrigated farmland, Shashi Shekhar, the top bureaucrat in India’s water-resources ministry, said in an interview.
“We want to use the next 10 years to drought proof the country,” he said. “Agriculture must become resilient to climate change.”
The government may approach the World Bank, Asian Development Bank and state-owned overseas banks for loans with tenures of as much as 25 years, Shekhar said. Ten states that are part of the plan and the federal government will equally share repayments.
India is concerned about water availability after the strongest El Ninoin almost two decades led to unusual weather and hurt crops from Ecuador to Indonesia. Rains, the main source of irrigation for India’s 26.3 crore farmers, were 14% below the 50-year average from an initial forecast of 7% lower. Agriculture contributes about 15% to India’s gross domestic product and is the nation’s biggest employer.
About 45% of 14.16 crore hectares of farmland in India is irrigated. The country has 18% of the world’s population and 4% of the globe’s water resources, according to the government. Bloomberg
