Mumbai: Maharashtra is battling its worst drought in 40 years, with growing fears that even drinking water could become scarce this summer in many cities and villages.

The immediate impact of the drought on the Indian economy is unclear at a time when persistently high food inflation has become a major headache for policy makers in New Delhi, but experts say that the state is not a major source of essential cereals. However, it is a major producer of milk and sugarcane.

The drought will take a toll on the state’s overall development effort, chief minister Prithviraj Chavan said.

“The agriculture growth rate is going to take a hit due to drought and it will also affect funds available for developmental work as a substantial amount is going to be spent on drought-mitigating measures," he said in an interview.

Maharashtra’s plan outlay for fiscal 2013 was around 45,000 crore. The state government has spent around 1,200 crore as of December end on tackling the drought, said a senior official of the relief and rehabilitation department.

“We had asked for assistance of around 3,200 crore but the central government so far agreed to give only 788 crore," he said. “But we are hopeful that in the coming months the central government will provide additional funds."

The drought has also kicked off an overdue debate on how water is used in the parched state.

The most common comparison is with the 1972 drought, which remains etched in public memory in Maharashtra. The human calamity in that dry year led the state government to launch a pioneering food for work programme, which later became the beta version of the Mahatma Gandhi National Rural Employment Guarantee scheme that was inaugurated in 2005.

The 1972 drought led to food shortages and agrarian unemployment while the current dry spell is creating other problems such as shortages of drinking water and cattle fodder, Union agriculture minister Sharad Pawar told members of his Nationalist Congress Party last week, according to media reports.

The Congress-NCP state government has already declared 7,064 out of 25,540 villages in the Pune, Nashik, Aurangabad and Konkan revenue divisions as drought affected. A decision on the remaining two revenue divisions—Amravati and Nagpur—is expected by the end of this week, according to a senior official in chief minister’s secretariat.

A village is declared as drought affected in case its area under cultivation shrinks by more than half after the rains fail.

Residents of these villages are then entitled to benefits such as rescheduling of crop loans, interest waivers, rebates on electricity bills and doing away with college fees for students.

Water scarcity has already become the big worry for the state government.

Chief minister Prithviraj Chavan told his cabinet colleagues during a weekly cabinet meeting last Wednesday that his government has finalized plans to send water trains to the central Marathwada region, which is expected to run out of water by March, according to The Times of India report published on 10 January.

How scarce water is used in the state is becoming a lightning rod for criticism.

“Maharashtra’s policy gives the highest priority to drinking water, followed by agriculture and industry. The government must implement its policy sincerely. Lots of water is still being used by breweries and distilleries in Aurangabad," said H.M. Desarda, agricultural economist and a former member of the state planning commission.

Hindustan Times reported on 9 November that state agriculture minister Radhakrishna Vikhe-Patil had written a letter to Chavan on 8 January, saying that water supply to mineral water and soft drink manufacturing facilities should be suspended and then diverted to homes and farms. Mint could not reach Vikhe-Patil, but his office confirmed that the minister had indeed written the letter, which is likely to come up for discussion in the state cabinet meeting scheduled on Wednesday.

While experts have for long argued that a drought-prone state such as Maharashtra should not encourage sugarcane cultivation because it soaks up a lot of water, not much has been done since state politics are dominated by the powerful sugar lobby.

Yet, there are a few stray examples of local initiatives to use water more carefully.

Popatrao Pawar, sarpanch of Hivare-Bazar village in Ahmadnagar district and executive president of the state government-appointed model village committee, said, “We have to rethink the cropping pattern we follow in the state."

He has led from the front.

“Long back, we decided in our gram sabha (village council) meeting that our village will not opt for water-intensive crops such as sugarcane and bananas. Today, we mostly grow vegetables that fetch better prices in cities such as Pune, Nashik and Mumbai than sugarcane does."

Opposition politicians allege that irrigation budgets have been mismanaged.

“In the last 10 years, the state government has spent 70,000 crore on irrigation projects, yet managed to increase state’s irrigation potential merely by (just) 1%. It is an accepted fact that only 30% of agricultural land in Maharashtra can be brought under irrigation even if we spend all the resources at our command. The time has come to rethink our irrigation policy," said Gopinath Munde, Bharatiya Janata Party leader. “Gujarat also received deficient rainfall this year but the drought situation there is not as bad as in Maharashtra, because during chief minister Narendra Modi’s tenure more than 15,000 check dams were constructed. The Maharashtra government must scrap all major and medium irrigation projects where work has not progressed beyond 25%."

Sarpanch Pawar believes the state government should pursue soil conservation programmes if the water-holding capacity of the soil has to be improved.

Adds Deserda: “Even the worst-affected talukas have not received less than 300 mm of rain, which is three times more than what Israel receives. If we manage to impound even 100 mm on one hectare, then one can ensure one million litres of water are added to groundwater. But we are interested only in big dams because they mean big contracts and big kickbacks."

The worst affected areas in the state are the Aurangabad and Nashik divisions, where half the villages have been declared drought affected. Nearly a third of villages in the Pune division have also been declared drought affected. The worst affected in the Pune division are Satara and Sangli districts, especially the eastern talukas.

Maharashtra accounts for 14.9% of country’s gross domestic product, (GDP), according to the state economic survey for fiscal 2012. However, the share of agriculture in Maharashtra’s gross state domestic product (GSDP) is about 13%, lower than the national share of 18%.