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Government of India and World Bank Sign $121.20 Million Agreement to Enhance Agriculture in Rainfed Areas of Uttarakhand

May 30, 2014

NEW DELHI, May 30, 2014 - The government of India, the government of Uttarakhand and the World Bank today signed a $121.20 million credit agreement to support the government of Uttarakhand, a mountain state richly endowed with natural resources, in its efforts to build sustainable watershed treatment models to improve agricultural productivity in rain fed areas of the state. The project was approved by the World Bank Board on March 31, 2014.

The credit agreement for the Uttarakhand Decentralized Watershed Development II Project was signed by Nilaya Mitash, joint secretary, department of economic affairs, ministry of finance, on behalf of the government of India; M H Khan, principal secretary and chief project director, watershed management directorate, on behalf of the Government of Uttarakhand, and Michael Haney, World Bank’s operations advisor in India, on behalf of the World Bank.

Today, 65% of India's agriculture is solely dependent on rainfall. Thus, improving the productivity of the country's rainfed agriculture is a challenge. In Uttarakhand, while the annual rainfall is high, more than 90% of it occurs during the July-September monsoon months, resulting in severe soil erosion and average annual soil loss of 40 tons/ha.  Rapid water runoff from the undulating hills during monsoon months act as a major constraint to improving agriculture in these areas. The degraded lands are owned by poor households, and their land holdings are small and scattered. As a consequence, household incomes are low. This project will use watershed development tools, particularly rainwater conservation and harvesting, to increase crop yields in rainfed areas of Uttarakhand.

“Watershed development is a primary tool of the government of India to increase agricultural productivity and reduce rural poverty. The central focus of this project is to improve the productivity of agriculture in rainfed areas through the use of watershed development tools, particularly rainwater conservation and harvesting and land resource management,” said Nilaya Mitash, joint secretary, department of economic affairs, ministry of finance, government of India.

A major focus of the project will be on catchment area treatment of about 219,000 ha of non-arable land, ranging in elevation from 700 m to 2,700 m above sea level. This is expected to rejuvenate the natural resource base by significantly reducing soil erosion and runoff loss of rainwater, improve ground water recharge, and reduce sediment load in the rivers flowing through Uttarakhand. The project will finance construction of water harvesting structures and small irrigation systems on 40,000 ha of arable land developed at the gram panchayat (local body) level.   

Some of the key components of the project include mobilizing the gram panchayats to develop agriculture and other income generating activities; construct and rehabilitate, among others, check dams, ponds, irrigation channels and tanks, and roof water harvesting structures; develop agribusinesses in high-value crops; and strengthen the institutional capacity to monitor and evaluate the project. 

“This project will help Uttarakhand scale up its efforts to improve the state’s natural resource base by ensuring that it has water for agriculture throughout the year. Improving water availability through watershed treatment will help increase agricultural production and productivity in these rainfed areas, lead to better use of scarce water resources and raise household incomes of farmers,” said Michael Haney, World Bank’s operations advisor in India. 

The Uttarakhand Decentralized Watershed Development II Project (known locally as Gramya-II) will directly benefit 55,600 households in 509 gram panchayats (1,066 villages), covering 260,000 hectares, spread over 82 micro watersheds, in eight mid Himalayan districts (Almora, Bageshwar, Pithoragarh, Dehradun, Pauri, Rudraprayag, Tehri Garhwal, and Uttarkashi) located between 700m and 2700 m above mean sea level.  To be implemented over seven years (2014-2021), the project will build on the earlier Uttarakhand Decentralized Watershed Development Project I (Gramya-I), which treated 234,000 ha in 76 micro watersheds and strengthened the administrative capacity of 468 gram panchayats.

The project will revive 1,530 traditional water sources, which are either dried up or are partially affected. It is expected that at least 1,071 out of 1,530 traditional water sources will be sustainably revived to benefit about 32,130 families in remote hilly terrains. Earlier impact assessments for such interventions have shown that, on an average, each household has reduced the time taken to access domestic water by about 45%. The project will also disseminate new technologies for increasing productivity of cereal, pulse, and oilseed crops in these rainfed areas, and of high-value vegetables in the irrigated areas. It will also build the capacity of gram panchayats for developing and implementing watershed development plans.

“Activities as envisaged under the project will help conserve soil and water, improve biomass production, increase and stabilize rainfed crop yields, as well as increase irrigation coverage and production of high-value crops. We hope this will help consolidate incomes and generate further employment opportunities among the people of the state,” said Edward Bresnyan, senior rural development specialist and the World Bank’s task team leader for the project.

The project will be financed by a credit from the International Development Association (IDA) – the World Bank’s concessionary lending arm – which provides interest-free loans with 25 years to maturity and a grace period of five years.

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