International Journal of Agriculture

Science and Research (IJASR)

ISSN (P): 2250–0057; ISSN (E): 2321–0087
Vol. 11, Issue 1, Jun 2021, 65-72
© TJPRC Pvt. Ltd.

IMPACT ANALYSIS OF PUBLIC INVESTMENT IN RIDF IRRIGATION PROJECTS

EMPLOYING MULTIPLE REGRESSION MODEL IN TAMIL NADU

S. NAGOOR ALI JINNAH1 & M.CHINNADURAI2

1
Research scholar, Department of Agricultural Economics, CARDS*, Tamil Nadu Agricultural University, Coimbatore,
Tamil Nadu, India
2
Professor (Retd.), Department of Agricultural Economics, CARDS*, Tamil Nadu Agricultural University, Coimbatore,
Tamil Nadu, India
*CARDS – Centre for Agriculture and Rural Development Studies
ABSTRACT

The augmentation of irrigation and water management infrastructure is the key to doubling income of the farms in
Tamil Nadu, like a water stressed state. The present study has been taken up in to gather research evidence to encourage
improved and effective public investment in irrigation sector. The primary data on the impact of selected five RIDF
projects in three river basins was analyzes using multiple regression analysis. The resultant model has a good regression
fit with independent variables namely additionality of water days, incremental cropping intensity and incremental crop

Original Article
yield influencing farm income leading to 35 per cent higher income for the farmers in the project areas. Off budget
borrowings by state government, creation of dedicated maintenance fund and effective functioning of water users
association will lead to improved outlays and more effective public investment in irrigation towards securing farmers
prosperity in Tamil Nadu.

KEYWORDS: Impact Analysis, Public Investment, Irrigation Projects & Multiple Regression

Received: Jan 18, 2021; Accepted: Feb 08, 2021; Published: Feb 13, 2021; Paper Id.: IJASRJUN20218

INTRODUCTION

The farmers’ prosperity is one of the avowed objectives of the Government of India (GoI) and Government of
Tamil Nadu (GoTN) and this is a mandate of National Bank for Agricultural and Rural Development (NABARD).
Irrigation infrastructure is a key public investment priority for the GoTN in the water stressed state where 92 per
cent of surface water and 85 per cent of ground water have been already exploited. Among the various funding
options available before GoTN in financing the irrigation infrastructure, the Rural Infrastructure Development Fund
(RIDF) line of funding from NABARD is the most attractive option and the state government has made judicious
use of the funding arrangement for the benefit of farmers. Prioritized public investment in irrigation and water
management projects through conjunctive use of budgetary resources and borrowing from financial institutions like
NABARD is the key to improve farmers’ income. This research study has been taken up in the context of increased
importance attached to irrigation infrastructure and declining pubic investment infrastructure in the sector amidst
the national priority of doubling farmers’ income by 2023 and to have research evidence to encourage improved
and effective public investment in irrigation sector. The major research objective was to analyze the impact of
public investment with specific reference to irrigation under RIDF of NABARD on farmers’ income in Tamil Nadu.

www.tjprc.org editor@tjprc.org
66 S. Nagoor Ali Jinnah & M.Chinnadurai

Rural Infrastructure Development Fund (Ridf) Progress

The GoI announced in the budget of 1995 – 96, the scheme for setting up of RIDF to be operationalized by NABARAD for
ongoing infrastructure projects particularly incomplete irrigation and projects. The RIDF is in the 25 th Year of its existence
and over the years has emerged as the most popular and sought after fund as (i) it has the cheapest cost of funds ( bench
marked to Bank Rate fixed by RBI) currently available at historically low rates of nearly three per cent per annum (p. a.)
(ii) it is available without much lead time and foreign exchange risk and (iii) offers the advantage of proper appraisal and
monitoring by NABARD. The funds are announced by GoI and allocated by RBI from the commercial banks resources,
calculated on the basis of shortfall in priority sector advances stipulated, and NABARD gets the funds at Bank Rate minus
two per cent interest rate and lends it to the State Governments at Bank Rate minus one point five per cent to be repaid in
seven years with one to two years moratorium. Since the annual allocations are limited (currently about Rs. 28,000
Crores), NABARD makes a State wise annual Normative Allocation based on a matrix of indicators spanning physical ,
social and financial parameters.

RIDF, commencing with an initial corpus of Rs. 2,000 crores in Tranche RIDF – I, is currently in its Silver
Jubilee year with annual corpus reaching a level of Rs. 28000 crores during RIDF – XXV in 2019 – 20. The cumulative
allocations has reached the level of Rs.3,48,500 crores, (including loan for Bharat Nirman), with 37 eligible activities.
Irrigation constituted the largest share of 51 per cent in terms of projects (13526 projects sanctioned) and in terms of
funding, the share of irrigation infrastructure ranged from 30 – 37 per cent of the pie.

As per annual report of NABARD 2019–20, the RIDF funding has created /stabilized/modernized an irrigation
command area of 341 Lakh ha (almost 50 per cent of net irrigated area of 680 lakh ha) contributing to the additional value
of production at Rs.57,427 Crores and non recurring employment of Rs.1,401 Crores man days on a cumulative basis as at
the end of March 2019.

Evaluation Study Findings on Ridf Impact

Kumbhare, S.L. and Madhumitha Sen (2008) in their research article evaluated irrigation projects under RIDF and
concluded that the net benefits realized by farmers have been found fairly high in UP, Haryana, Maharashtra and Assam. It
suggested formation of Water Users Associations (WUAs) envisaged under RIDF for effective water distribution and
maintenance.

The impact Evaluation done by Chinnadurai, M. et al. (2015) of Tamil Nadu Agricultural University studied the
ex-post impact of irrigation projects using double difference method selecting 21 irrigation projects spread across 11
districts. The study concluded that there are significant impact of irrigation system to supply adequate water to tail end
areas, shift in cropping pattern and increase in yields and increase in ground water recharge.

The impact evaluation done by Vinod Annigeri et al (2016) of CMDR, Dharwad found an overall impact of
agricultural income at 140 per cent and yield of major crops at 143 per cent. The improvement was also seen in live stock
holdings. The study suggested formation of Water Users Association training in conjunctive use of water, and focus group
association with stakeholders for timely and effective of the project.

The impact evaluation done by IIT, Kharagpur Team, Dr Pulakh Mishra et al (2016) brought out significant
improvement in cropping intensity agricultural production, decline in crop loss, greater crop diversification etc. It recorded
that vegetable production increased by around 60 per cent and sesame by around 25 per cent and the household income

Impact Factor (JCC): 8.3083 NAAS Rating: 4.13

Impact Analysis of Public Investment in Ridf Irrigation Projects Employing Multiple Regression Model in Tamil Nadu 67

from agriculture increased by about 25 after the RIDF project implementation. The study underlined the need for
availability of systematic data, joint supervision of the projections including community and maintenance mechanism.

METHODOLOGY

Under RIDF projects funded to State of Tamil Nadu, five irrigation projects in five districts were selected purposively with
the intention that the projects should cover at least three major river basins in TN viz. Thamirabarani, Vaigai-Gundar and
Cauvery. The other criteria kept in mind while selecting the projects included (i) The projects should have an outlay of
about two crores rupees or above with ayacut stabilization of about 200 acres or more (ii) The projects should cover
various types viz. check dams, anaicuts for water augmentation but also projects which helps as supply channels and those
arresting sea water intrusion (iii the projects should cover both river command and tank command and (iv) the projects
should have completed a range of six years since execution, say two to six years, so that the stabilization impact could be
established it is presented in (Table1)

Within the projects, the farmers whose ayacut lands were stabilized were reckoned as “Beneficiary Farmers” and
farmers in these villages whose lands did not get any additional irrigation benefit with the commissioning project (as their
lands were not covered in the stabilized ayacut) were considered as “control farmers”. In each project 60 beneficiary
farmers and 30 control farmers were interviewed. In addition, information was also collected from Executive Engineers of
PWD – Water Resources Department in Cauvery, Thamirabharani, Gundar-Vaigai river Basins which was supplemented
with interaction with personnel of Public Works Department PWD–WRD and Laskars / Neerkanis who work at grass root
level to validate the views of the farmer respondents.

The data was analyzed using statistical and econometric tools such as Pearson coefficient and multiple linear
regression models.

Table 1: Details of Projects Selected for Study

Year of Cost of
Sl. Stabilized
District River Basin Name of the Project *completion Project
No. Ayacut (ac)
(RIDF Tranche) (in lakhs)
Check dam across Ariyar
Ariyar in 2015
1 Tiruchirappalli river in Ammapettai village 340 306
Cauvery Basin (RIDF XX)
of Trichy district
Anaicut across Nariyar river
Nariyar in 2017
2. Thanjavur on Alivalam village in 473 373
Cauvery basin (RIDF XXI)
Thanjavur district
Formation of Branch
channel to Nedumadurai
2014
3. Madurai Vaigai Basin and Thottiyarpatti tanks in 358 654
(RIDF XX)
Thirupparankundram Taluk
of Madurai district
Check dam in
Thamirabarani Thamirabarani river in 2014
4. Thoothukudi 990 2575
Basin Mukkani Village of (RIDF XXI)
Thoothukudi district
Check dam across Koraiyar
Koraiyaru 2016
5. Pudukottai river at Kulathur Taluk of 284 200
Sub basin (RIDF XII)
Pudukottai district
*year of completion and RIDF Tranche need not correlate in view of phasing and delay in
execution
Source: Reports of Respective Districts

www.tjprc.org editor@tjprc.org
68 S. Nagoor Ali Jinnah & M.Chinnadurai

RESULTS AND DISCUSSIONS

Benefits from Projects and Operational Issues

As much as 76 per cent of beneficiary group interviewed were in the 31-50 years age group and almost 40 per cent of the
beneficiaries were illiterate and 35% had primary education with only 13 per cent population as graduates. The 65 per cent
of beneficiary families had a family size of more than four. A predominant category of farmers benefitted belonged to
small and medium category in terms of size of landholding (81 per cent) with less than four ha of land holding. Majority of
the farmers grew paddy (69 per cent) and pulses (22 per cent) followed by groundnut.

The major benefits experienced by the beneficiaries included the following: (i) assured supply water increased
from 45 – 60 days up to 170 days depending on the project, stabilizing the ayacut (ii) there was good ground water
recharge of wells(iii) this has encouraged them to go in for at least two cropping seasons from one earlier in case of many
farm households(iv)these was a marked increase in the yield of crops (v) in projects taken up near estuary area
(Thoothukudi district), good quality water was assured arresting sea water intrusion resulting in higher yield and farm
income. Interaction with beneficiaries and implementing officials revealed many operational issues involving lack of
maintenance fund, inadequate staff at grass root level, non-functioning of water users associations, considerable delay in
financial sanction of projects, variance in additionality of water days due to uncertain rainfall etc.

OVERALL IMPACT OF THE FIVE PROJECTS SELECTED

It may be seen from the results of the five projects, that there has been good stabilization of ayacut due to additionality in
water days which enabled them to increase the cropping intensity from 30 per cent to 120 per cent with average ICI as 66
per cent. They also reported higher yield and incomes ranging from 18 per cent to 52 per cent and 18 to 62 per cent
respectively. The summary position of the variables before and after the project is as follows, which is pictures in the form
of a radar graph.

The overall aggregate of all 5 projects (data of 300 sample farmers) indicated that there was significant
improvement in additionality of irrigation water days and cropping intensity. The overall variance in X and Y variables for
all 5 Projects selected is presented in Table 2.2.

Table 2.1: Variance in X and Y Variables for all 5 Projects

S.No Variables Before After
1. Farm Income 100 135
2. Cropping Intensity 100 166
3. Crop Yield 100 128
4. Water Days 80 167

Impact Factor (JCC): 8.3083 NAAS Rating: 4.13

Impact Analysis of Public Investment in Ridf Irrigation Projects Employing Multiple Regression Model in Tamil Nadu 69

Figure 1: Overall Impact of Five Projects

Table 2.2: Variance in X and Y Variables for all 5 Projects

Range Average
S.No Variables in Per cent
(Per Cent) (Per cent)
1. Additionality in Water Days (AWD) (days) 70-100 days 87 days
2. Incremental Cropping Intensity (ICI) 30 -120 66
3. Incremental Cropping Yield (ICY) 18 – 52 28
4. Incremental Farm Income (IFI) 18 - 62 35

A Graphical Representation of the variance is presented in Chart 1

*The first segment (S.No.1-60) relates to Madurai District, (S.No.61-120) relates to Thoothukudi district,
(S.No.121-180) relates to Trichy district, (S.No.181-240) relates to Thanjavur district, (S.No.241-300) relates to
Pudukottai district.

www.tjprc.org editor@tjprc.org
70 S. Nagoor Ali Jinnah & M.Chinnadurai

While the variance in availability of additionality was largely determined by the factors of location of the farm
(e.g. tail end) and ownership of wells, the cropping intensity varied largely on account of, apart from additionality of water,
on factors such as financial position, fulltime or absentee farming etc. As regards the incremental crop yield, apart from
additionality of water days, factors such as water management and package of practices adopted by individual farmers
contributed to the variance. In respect of Thoothukudi project, Since Thamirabharani is a perennial river, the impact of the
check dam on Cropping Intensity was not as much as other projects in view of already stabilized ayacut due to the
perenniality of the river as well as the fact that some annual/perennial crops such as Banana, Areca nut was also grown and
therefore Thoothukudi project stands out as compared to other district segments. Similarly in Check dam in Pudukottai the
incremental farm income was relatively lower on account of relative volatility in additionality of water as compared to
other check dams.

CORRELATION AND MULTIPLE REGRESSION ANALYSIS

It was postulated that all the 3 X variables viz. AWD (additionality in water days), Incremental Cropping Intensity (ICI),
Incremental Crop Yield (ICY) contributed to the incremental farm income (IFI). The Pearson correlation explaining the
relationship among X variable and Y variables in all the 5 Projects in aggregate (300 Sample farmers) has been worked out
using CORREL function of MS Excel and the results for the project is presented in table 3 as follows:

Table: 3: Correlation Analysis

S.No IFI ICI ICY AWD
1. 1
2. 0.792 1
3. 0.580 0.474 1
4. 0.402 0.486 -0.041 1

It may be observed that all three X variables ICI (0.792), ICY (0.580), AWD (0.402) had a positive correlation
with y variable, i.e., farm income.

Keeping the foregoing discussions, a Multiple Regression function was fitted using MS Excel Analytical tool
pack with the following variables.

 Y= farmers income (dependent variable)

 X1 = additionality in assured water days (days) (independent variable)

 X2 = incremental cropping intensity (%) (independent variable)

 X3 = incremental crop yield (%) (independent variable)

The results indicated a good fit of Multiple Regression and the findings of the regression model are presented in
Table 4.

Impact Factor (JCC): 8.3083 NAAS Rating: 4.13

Impact Analysis of Public Investment in Ridf Irrigation Projects Employing Multiple Regression Model in Tamil Nadu 71

Table 4: Summary Findings of the Regression Analysis – Overall Impact of Selected 5 Projects
Variables Coefficient values t-Value p-Value
Intercept -20.20 - -
X1 0.26 10.35 1.24E-21
X2 0.76 15.67 1.01E-40
X3 0.18 2.92 0.00
R2 0.62 - -
Adjusted R2 0.62 - -
VIF 2.64 - -
F-Value 165.07 - 0.00
Model Equation: Y = -20.203 + 0.267 X1* + 0.769 X2* + 0.187 X3*
Where, * Significant at 1 per cent level

It can be observed from the table that all the three independent variables have significant influence on the
dependent variable. All three X Variables (X1—Incremental Cropping Intensity in per cent), (X2 – Incremental Crop Yield
in per cent) and (X3—Additionality in Water Days in terms of No. of days) are positively associated with Y, the dependent
variable, i.e., Incremental Farm Income. Therefore, with 1 unit change in X2, Y changes by 0.76 units. Similarly, with 1
unit change in X1, Y changes by 0.26 units. Further, with one unit change in X3, Y changes by 0.18 units. The Variance
Inflation Factor (VIF), a measure of multi-collinearity at 2.64, is found to be in the tolerance limit. Collectively these three
variables explain about 62 per cent of the variation in the dependent variable. The F-statistic is found significant at one
percent level, which suggests that there exists a strong association between the dependent variables and the independent
variable. Thus, the model is found satisfactory.

CONCLUSIONS

The results of the study on impact of RIDF-NABARD irrigation projects in selected districts of Tamil Nadu using multiple
regression model evidences significant 35 per cent of increases farmers’ incomes. The model indicated that independent
variables namely additionality of water days (67 per cent), incremental cropping intensity (66 per cent) and incremental
crop yield (28 per cent) had significantly influenced the farmers’ incomes positively. Creation of project maintenance fund,
effective functioning of water users associations and decision support system based optimization and off budget
borrowings by the state government will help improve outlays and effectiveness of public investment in irrigation
infrastructure towards securing farmers prosperity in Tamil Nadu.

REFERENCES

1. Dhawan B D, Dalta H S (1992). Impact of irrigation on multiple cropping” Economic and Political weekly, 28, 15 – 18.

2. Gulati, Ashok & Seema Bathla (2001). Capital Formation in Indian Agriculture: Re-visiting the Debate. Economic and
Political Weekl, 36, 20-24.

3. Karunakaran K R & Palanisamy K (1998). An Analysis of Impact of Irrigation on Cropping Intensity in Tamil Nadu.
Economic Review, 33, 199-210.

4. National Bank for Agricultural and Rural Development, Annual Reports.1995-96 to 2019-20.

5. Oguniyi Adebayo, Omonona Bolarin, Abioye Oyewale, Olagunju Kehinde (2018). Impact of Irrigation Technology use on crop
yield, crop income and household food security in Nigeria. Agriculture and Food, 3, 154-171.

6. Thirumagal, P. G., & SURESH, S. (2019). PAYOFF AND THE IMPACT OF VARIOUS INVESTMENT ATTRIBUTES ON

www.tjprc.org editor@tjprc.org
72 S. Nagoor Ali Jinnah & M.Chinnadurai

FREQUENCY OF INVESTMENT IN STOCK INDEX FUTURES. International Journal of Mechanical and Production
Engineering Research and Development (IJMPERD) Vol, 8, 8-15.

7. Pahuja, P. Empirical Study on Investor Behavior and Decision Making Towards Investment Avenues.

8. Vijayakumar, S. Multimedia Infrastructure and Practical Application: Is There A Correlation?.

Impact Factor (JCC): 8.3083 NAAS Rating: 4.13