In a significant policy shift aimed at balancing industrial expansion with agricultural interests, the Odisha government has decided to permit diversion of irrigated and to-be-irrigated agricultural land for industrial purposes under a new compensatory framework that mandates the creation of alternative irrigation potential for the affected areas.
The Department of Water Resources (WR) has issued fresh guidelines laying down the conditions under which irrigated command areas may be acquired or directly purchased by industries. While emphasising that both agriculture and industrialisation are essential for employment generation and economic growth, the department, in a notification, said it has so far been cautious in preventing industries from being set up in irrigated agricultural command areas.
However, it acknowledged that in certain situations, industries may not be able to completely avoid such land, especially when contiguous land parcels are required for large projects or where companies have already procured land and made investments.
To address such situations, the state government has introduced a mechanism akin to compensatory afforestation, under which industries will have to compensate for the loss of irrigation by funding the creation of new irrigation capacity.
Although irrigated land or land proposed to be irrigated through already designed canal systems should not be used for industrial purposes, according to the newly framed guidelines, if diversion becomes unavoidable due to contiguity requirements or prior investments by industries, the project proponent will have to bear the full cost of compensatory irrigation by creating new irrigation potential equal to twice the ayacut area lost.
“If an existing canal system is obstructed by an industrial project, depriving downstream farmers of irrigation, the industry will have to restore water supply either by diverting the canal alignment or through pumping arrangements. The entire expenditure, including land acquisition for diversion works and pumping infrastructure, will be borne by the industry concerned,” stated the WR department notification.
In cases where downstream irrigation cannot be restored through diversion or pumping, the industry will have to compensate by creating irrigation potential equivalent to twice the downstream ayacut area affected, it said.
According to the guidelines, reviewed by Business Standard, compensatory irrigation should preferably be created within the same irrigation project area through canal extension or pumped irrigation systems. If that is not feasible, the cost of creating the required ayacut through lift irrigation projects executed by the Odisha Lift Irrigation Corporation will be borne by the industry concerned, preferably within the same block or district.
“If not possible there, such irrigation facilities may be developed in a neighbouring district. For determining compensation, the latest government cost norms for the creation of ayacut will be used. Since irrigation projects generally take around three years to complete, an additional 25 per cent over the estimated cost will be charged to offset future escalation,” the notification stated.
The irrigation authorities will identify suitable areas for compensatory irrigation, determine the mode of execution, undertake surveys and investigations, prepare DPRs and estimate the total cost. This will include expenditure on source development, distribution systems, supervision, tools and plants, quality control and other ancillary works, after which the 25 per cent escalation component will be added.
Apart from compensating for irrigation loss, industries will also have to bear the actual expenditure incurred on irrigation systems that may need to be fully or partially abandoned because of the project, including the cost of land and structures.
Before the government considers any proposal for diversion of the irrigation command area, the industry must submit an agreement or affidavit through its authorised signatory undertaking to pay any additional cost arising during the actual execution of compensatory irrigation works. The industries will also have to contribute to the Water Conservation Fund in accordance with existing norms, the notification added.
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