Abstract
India is spending billions of rupees a year for increasing her irrigation potential. For selecting irrigation projects, a proper method of appraising costs and benefits expected from each project is very useful. The current method employed by the Irrigation Commission is dangerously simpleminded and may lead to the selection of the wrong projects. An alternate model for assessing irrigation projects is developed that takes into account realistic elasticities of demand and supply for the commodities produced in the irrigated area, and the concepts of consumers' and producers' surplus. An illustrative example shows the wide differences in estimated benefits from an irrigation project from using the Irrigation Commission's and the proposed methods. Suggestions for improving the current method are provided.
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