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GOVERNMENT OF KARNATAKAFinance Department
REVENUE REFORMS COMMISSION FINAL REPORT
# 371, 8th Main, 2nd Floor, Sadashivanagar, Bangalore 560 080 Tel 080-23617634, Fax 080-23619028
E-Mail – [email protected] Web – nitpu3.kar.nic.in/rrc/
February- 2004
REVENUE REFORMS COMMISSION FINAL REPORT
# 371, 8th Main, 2nd Floor, Sadashivanagar, Bangalore 560 080 Tel 080-23617634, Fax 080-23619028
E-Mail – [email protected] Web – nitpu3.kar.nic.in/rrc/
February- 2004
Chairman mission
Nam • Sr
Ch
• DrM
• Dr
M
• DrM
• Dr
M
• DrM
• Sr
M
• SrM
• S
• S
• S
• S
• S
• S
• S
• S
• S
• S
• S
• S
• S
• S
• S
• S
• S
and Members of the Revenue Reforms ComBangalore
e & Designation
i. M. Veerappa Moily airman
. R.G. Nadadur ember Secretary
. M.Govinda Rao ember
. R.V. Dadibhavi ember
. B.S. Sreekantaradhya ember
. K.A. Kushalapa ember
i. K. Nazeer Hussain ember
i. B.C. Angadi ember
Staff of the Revenue Reforms Commission Bangalore
ri. Ahmed Hasan, OSD to Chairman
ri. H. Seshadri, Special Officer (Irrigation)
ri. M. Muni Reddy, CCF
ri. M. Shivanna, Accounts Superintendent
ri. C.A. Vittal Rao, P.A. to Chairman
ri. J.S. Girisha , P.A. to Chairman
ri. Gregory Robert
mt. T.R. Bharathi
ri. Dinesh K Chitrapur
ri. B. Shankar Reddy
ri. M. Manjunath
ri. D. Shanthakumar
ri. M. Nagaraju
ri. G. Basavalingappa
ri. N. Jayachandra Devadiga
ri. H. Ananda
ri. N. Srinivasa
Chairman and Members of the Revenue Reforms Commission
Bangalore
• Sri. M. Veerappa Moily
Chairman
Members :
• Dr. M. Govinda Rao
• Dr. R.V. Dadibhavi
• Dr. B.S. Sreekantaradhya
• Dr. K.A. Kushalapa
• Sri. K. Nazeer Hussain
• Sri. B.C. Angadi
• Smt. Sobha Nambisan Member Secretary
CONTENTS
Sl. No. Title Page Nos.
1. Preface by the Chairman i viii
2. Minor Irrigation 3 - 51
3. Labour and Employment 55 - 90
4. Crop Husbandry 93 - 116
5. Sericulture and Silk Filatures 119 – 137
6. Cooperative Audit 141 - 152
7. Summary of Recommendations 155 - 168
8. Acknowledgements and References 171 - 173
PREFACE
Sri. S.M. Krishna government constituted the Tax Reforms Commission and
subsequently the Revenue Reforms Commission, under my Chairmanship in the year
2000 and 2002 respectively. The recommendations of Value Added Tax and reforms
in State Excise Duty, Motor Vehicle Tax, Stamps and Registrations have set a trend
not only in Karnataka, but also all over the country. Many other States have also
started implementing the recommendations of the said Commission. The pro-reformer
Chief Minister Sri. S.M. Krishna implemented 80 percent of the recommendations
and consequently the revenue in all the above sectors augmented by leaps and bounds.
The Report of Revenue Reforms Commission was also submitted to the State
government during November 2003 recommending the reforms in Irrigation, Health,
Education and Forest departments.
The economic reforms still have a large unfinished agenda in the country. The
fiscal adjustment is far from complete. The physical infrastructure sector urgently
needs reforms, both in the management and tariff structures, which would enable us to
raise more resources for development of infrastructure. This in turn would enable both
the private and public sector to expand operations. There is a tremendous backlog in
education and health. We must ensure that development is not promoted on the backs
of the poorest people. We must put in place adequate social safety nets to ensure that
too much of a burden is not imposed on the weaker sections as we go along. And
finally, we should create an environment, which encourages sustainable growth and
poverty eradication.
In 1992, the US Internal Revenue Service (IRS) formulated the Business
Vision Plan. The plan set forth how the US tax administration would operate in the
future and analyzed the changes, which would be needed in existing operations to
achieve its future goals. Gap, defined previously, is the difference between the taxes
actually paid and the taxes which should be paid according to the existing laws and
statutes includes taxes not paid due to tax evasion, tax arrears (taxes declared but not
paid), the shortfall in taxes due to tax payer's misunderstanding of the tax laws and
any other form of noncompliance.
i
The Government of Karnataka on 18th April 2000 notified the formation of
Tax Reforms Commission with me as its Chairman and subsequently appointed six
members and a Member Secretary to the Commission. The Commission undertook
an indepth analysis and submitted valuable recommendations to the government,
many of which were accepted. The Commission was therefore faced with a situation
of inadequate tax effort coupled with high tax rates. It was realized by the
Commission that high tax rates contribute to high evasion. It was therefore felt that
radical reform ranging from change in tax structure, tax rates to improvement in tax
administration was the need of the hour.
It was found that the sales tax system in the State was beset with multiple
objectives, among which rate differentiation was found to be done even for many non-
economic reasons including social and religious etc. In addition tax competition in the
shape of low taxes prevailing in Pondicherry and to a lesser extent in Goa, provided
for diversion of trade and reduction of taxes. Further multiple tax rates including five
general tax rates and another six special tax rates on selected items of consumption
and wide ranging exemptions not only for different products but also for different
uses reduced transparency and created difficulty in administration. Multiple levies in
addition to sales tax, levy of turnover tax, entry tax and infrastructure cess created
further difficulties in the matter of administration and assessment, while the consumer
gets loaded with distorted prices.
Lack of information system also has contributed to improper assessment. It
was felt that there is need for proper information system to undertake assessment in
such a complicated tax frame. Databases of tax payers are required to be created in
order to increase transparency and avoid evasion. To begin with at least taxpayers
with more than Rs. 1 crore turnover could be kept under watch by computerized
systems.
ii
The following principles were envisaged by the Commission:
i. A simple tax system, which should have only a few tax rates and very few
exemptions, should be envisaged.
ii. Low marginal tax rate to minimize resource distortions and reduce
incentives for evasion.
iii. To reduce the complexity therefore, the levy of entry tax in addition to
sales tax, turnover tax and infrastructure cess required a rethinking since
the combination of the three taxes and cess results in an infinite number of
tax rates leading to improper assessment of tax. These should be
rationalized by having a single tax system instead of several.
iv. In order to avoid multiplicity of rates the State government should improve
revenue productivity and make a transition to a more rational system
keeping in view the floor rates decided in the State Finance Ministers
Committee.
v. It is important for Karnataka to adopt VAT, since all distortions in the tax
including the cascading effects would be done away with. Further it was
generally accepted that there should be a consumption type of VAT which
allows input tax credit for both raw material and capital goods and that it
should be on the destination based principle. The recommendations gave
state's own road map for the introduction of VAT and the preparations to
be made for a sound inter state VAT to be introduced. Further the ideas on
the introduction of VAT on services along with VAT on goods have also
been envisaged in the recommendations.
Many of the recommendations were accepted and revenue receipts have
started increasing as can be seen from the following:-
2002-03 April 2002 to October 2002 : Rs.3500.00 crore
2003-04 April 2003 to October 2003 : Rs.4200.00 crore
According to the present indicators, the excise revenue is likely to shoot up
19 percent. Karnataka which ended up with a revenue of Rs. 890 crore from excise
revenue as on 31st March 2000 is likely to reach the peak of Rs.2,300 crore by the end
of March 2004.
iii
During 2002-03, the Revenue from stamps and registration between April
2002 to October 2002 were Rs.662.68 crore and during 2003-04 from April 2003 to
October 2003 these were Rs.706.41 Crore, an increase of 7 percent, that too after
reducing the stamp duty for conveyance of immovable property, etc. This should be
considered a positive development since in 1998-99 compared to 1997-98 there was
about –10 percent growth. Further as a result of e-governance procedures
recommended, about 155 sub-registrars offices have been computerized and the
general public has been benefited by the transparency of the new system and also
documents of registration are being released within a day or two instead of a period of
couple of months, which was required earlier due to manual method of registration.
These have largely been accepted by the government, as a result of which
increase in revenues has taken place as given here under:-
Revenues from Motor Vehicles Tax
From April 2002 to October 2002 : Rs.373 Crore
April 2003 - October 2003 : Rs.435.50 Crore
State’s own Tax Revenue Impact will be as follows:
Year Annual revenue
2000-01 Rs 9042.68 crore
2005-06 (a) Rs.18989.63 crore at 2000-01 price level
(b) Rs. 25446.10 crore at 2005-06 price level
Thus the annual state’s own revenue after 5 years will be higher by 210
percent at the price level of the base year 2000-01 and 281 percent at price level of
2005-06 if all the recommendations are implemented.
iv
Revenue Reforms Commission
After the final report of the Tax Reforms Commission was submitted to the
government, the government again referred non-tax issues also for study to the
Commission and the name of the Commission was changed as Revenue Reforms
Commission. I continued to be the Chairman along with six other Members and
Member-Secretary of the Tax Reforms Commission. Among the earlier set of six
members of the Tax Reforms Commission, two members were changed in order to
meet the requirement of non-tax subjects like irrigation and forest. However, it hardly
needs to be mentioned that the procedures of the work of this Commission were as
effective as they were of the earlier Commission, since the same guiding spirit of the
Chairman steered the work of this Commission. Broadly the Commission considered
and recommended regarding :-
a. the manner in which quality of services could be improved so that service
charges may be willingly paid and
b. the scope for enhancement of revenues from certain sectors
The basic philosophy behind the recommendations has been to ensure that in
these sectors arrangements are made by government to provide effective/efficient
services either through government or the private sector, which will naturally tend to
increase revenues. Recommendations regarding participatory approach to development as well as
effective implementation of the functions of various departments through
e-governance methods were made. An estimate is also made of expected revenue
increases from the recommendations in the four major departments. It was felt that the
present revenue Rs.214.66 crore in 2001-02 will increase to 1800 crore if the
recommendations are implemented i.e., an increase of 800 percent at a very
conservative estimate. This estimate split sectorwise will be as under:
v
Statement of Expected Revenue Increases on implementation of the Revenue Reforms
Commission’s Recommendations
Rupees in Crore Subject 2001 – 02 Expected
(Approximately)Education 31.77 Gross
25.03 Net 50.00
Health 59.15 Gross50.98 Net
150.00
Forest 100.00 1500.00Irrigation 23.74
20.56(Major Irri)
100.00
Total Revenue 214.66 1800.00
Present State Revenue : 11 percent Future State Revenue : 25 percent Present State GDP : 2 percent Future State GDP : 5 percent
The discipline of economics is located on the edge of history. It may not be
possible to keep its integrity if it has to come to terms every time with the political
complexes of those in power. We always find wealth, employment and resources in
the country, but they keep hidden in the well entrenched distorted administrative set
up. Our economic life is often all too tidy and messy. Common sense does not
always lead to correct answer to development economics. A strategy that sacrifices
economic growth or consumption in order to create more jobs requires faster, not
slower growth. Faster development will trigger off only when structural reforms take
off.
The latest evidence comes from the World Bank’s Development Research
Group. An empirical study of eighty countries over forty years, entitled “Growth is
good for the poor”, shows that the income of the poor rises one –for- one with overall
growth-that is, the income of the poorest of the population rises at the same time and
at the same rate as everyone else’s. Thus, simple economic growth does more to
alleviate poverty than all the subsidies and poverty programs.
vi
The Commission has dealt with departments of Minor Irrigation, Labour and
Employment, Crop husbandry, Sericulture and Silk Filature and Co-operative Audit,
in this final report.
The Members of the Commission including Member Secretary, who are
highly eminent and knowledgeable, made this Report monumental, rich and
resourceful. We acknowledge the willing co-operation of Sri B.K. Das, Additional
Chief Secretary and Principal Secretary, Finance Department in rendering this Report.
Former Member Secretary Dr. R.G. Nadadur and the present Member Secretary
Ms. Sobha Nambisan have put in their administrative and academic skill of
excellence. The Secretaries of Administrative Departments and heads of departments
of Minor Irrigation, Labour and Employment, Crop husbandry, Sericulture and Silk
Filature and Co-operative Audit extended their willing hand of co-operation to the
ever searching questions.
I should also thank my personal staff and the personnel of the Commission for
their support.
Date : 26th February 2004
Place : Bangalore M Veerappa Moily
vii
viii
REVENUE REFORMS COMMISSION
CHAIRMAN
Sri M. Veerappa Moily
MEMBERS
Dr. M. Govinda Rao
Sri B.C. Angadi
Sri K. Nazeer Hussain
Dr. K.A. Kushalapa
Dr. B.S. Sreekantaradhya
Dr. R.V. Dadibhavi
MEMBER – SECRETARY
Dr. (Smt.) Renuka Viswanathan, IAS
from January 16, 2002 to December 13, 2002
Sri L.V. Nagarajan, IAS
from January 29, 2003 to April 16, 2003
Dr. R.G. Nadadur, IAS
from April 16, 2003 to December 8, 2003
Smt. Sobha Nambisan IAS
from December 8, 2003 to date
CHAPTER I
MINOR IRRIGATION
CHAPTER 1
MINOR IRRIGATION SECTOR
Definition of minor irrigation
1.1 Minor irrigation projects include tanks, anicuts, bandharas, barrages, pickups,
springs, feeders, voddus, vented dams, salt water exclusion dams and lift
irrigation projects.
1.2 Prior to 1970, irrigation projects costing up to Rs. 25 lakhs in the plains and up
to Rs. 30 lakhs in hilly regions were classified as minor irrigation projects.
After 1970, irrigation projects are classified on the basis of the size of the
ayacut. Projects having ayacuts of 2000 hectares and less are classified as
minor irrigation projects.
According to G.O. no. ID 2 IFY 87 of 3/8/92, minor irrigation projects
irrigating areas less than 4 hectares have been placed under the management of
taluk panchayats and those irrigating between 4 hectares and 40 hectares are
managed by zilla panchayats. Those irrigating between 40 hectares and 2000
hectares are under the jurisdiction of the Minor Irrigation department, in the
State sector.
1.3 The net culturable area of Karnataka is 138.92 lakh hectares and the net sown
area is 104.82 lakh hectares, according to the compilation of the department of
Economics & Statistics. Nearly 75 percent of the State’s population lives in
the rural areas and is mainly dependent on agriculture. Rain-fed agriculture is
a gamble, as the rainfall of the South-West monsoon is very scanty in most
parts of the State. Three-fourths of the State’s geographical area lies in the
rain shadow of the South-West monsoon, to the east of the Sahyadri mountain
ranges, with rainfall as low as 38 cm., in the eastern and northern parts of the
State.
3
1.4 The rainfall is also erratic, with the coefficient of variability of rainfall being
more than 30 percent in most parts of the State. According to the Irrigation
Commission 1972, amongst all the Indian States, the largest extent of the
drought-prone area of the country is situated in Karnataka. The situation is
even worse than that of Rajasthan. The drought-affected culturable area in
Karnataka is 82 lakh hectares, which constitutes 60 percent of the entire
culturable area of the State.
Table I
Table showing Statewise percentage of drought prone areas in hectares
Sl.No.
State Geographical Area
Drought Prone Area
% of Drought
Prone area
1 Andhra Pradesh 27504500 12511303 45.49 2 Bihar 17387700 4338450 24.95 3 Gujarat 19602400 12123890 61.85 4 Haryana 4421200 1658785 37.52 5 Jammu & Kashmir 22223600 1599930 7.20 6 Karnataka 19049836 15216333 79.87 7 Madhya Pradesh 44344600 8721952 19.67 8 Maharashtra 30771300 12376705 40.22 9 Orissa 15570700 2286241 14.68 10 Rajasthan 34223900 21895045 63.98 11 Tamil Nadu 13005800 8409114 64.66 12 Uttar Pradesh 29441100 4303310 14.62 13 West Bengal 8875200 2672080 30.11
Source: Ministry of Water Resources, GOI, at website: wrmin.nic.in/development/drought.htm
1.5 In this precarious scenario, the importance of providing irrigation facilities to
as large an area as possible is indisputable.
1.6 The net irrigated area to net sown area in Karnataka for 1996-97 (according to
the land use statistics of the Union Ministry of Agriculture, as quoted in the
Annual Report of the Union Ministry of Water Resources for 2000-2001) is
only 21.91 percent. This is the lowest for all major States except Maharashtra
(which has a figure of only 14.36 percent). Even Rajasthan has a higher figure
of 33.28 percent. More recent figures furnished by the Chief Engineer (Minor
4
Irrigation-South) for 1999-2000, based on data provided by the Directorate of
Economics and Statistics, puts the percentage of net irrigated area to net sown
area in the State at 24.8 percent.
1.7 In view of the modest water resources available to the State and the very
extensive hard core drought affected culturable area of 82 lakh hectares,
Karnataka has to spread its water resources thinly to provide the widest
possible coverage of irrigation benefits. Thus, most of the irrigation projects
of Karnataka provide protective irrigation, mostly of a single light irrigated
crop.
1.8 There are seven river systems in Karnataka. These are Krishna, Cauvery,
Godavari, North Pennar, South Pennar, Palar and the west flowing rivers. The
ultimate irrigation potential in the State, from all sources (surface and ground
water), is about 65 lakh hectares, of which the share of minor irrigation is
26 lakh hectares [13 lakh hectares from surface irrigation and 13 lakh hectares
from ground water resources].
Creation of irrigation potential
The following table indicates the basin wise details of the ultimate irrigation
potential and the potential created up to 1/4/2001 under minor irrigation from surface
waters.
TABLE-II
in hectares River basin Ultimate
irrigation potential
Potential created up to
1/4/2001
Balance potential to be created
Krishna : Under Scheme ‘A’ Under Scheme ‘B’ Total
5,10,9082,96,8008,07,708
4,91,559 04,91,559
19,349
2,96,800 3,16,149
Cauvery 3,83,000 3,51,265 31,735 Godavari 26,350 23,125 3,225 Other basins 79,742 69,000 10,742 Total 12,96,800 9,34,949* 3,61,851
(*) This figure has been revised as 8,40,753 hectares in the Census on Minor Irrigation, 2000-2001. Corresponding basinwise figures have not been made available to the Commission.
5
1.9 According to the Minor Irrigation Census 2000-2001, a total irrigation
potential of about 8.41 lakh hectares has been created under minor irrigation
using surface waters. An additional potential of 9.10 lakh hectares has been
created from ground water sources, bringing the total creation of irrigation
potential under minor irrigation to 17.51 lakh hectares, as against the ultimate
potential of 26 lakh hectares from surface and ground water sources.
Investment on minor irrigation
1.10 The total investment, up to end of March 2001, on minor irrigation using
surface water, is Rs. 1013.41 crores. The following table gives the cumulative
Planwise investment on minor irrigation (using surface water) and the creation
of irrigation potential:
Table III
CUMULATIVE PLANWISE INVESTMENT ON MINOR IRRIGATION AND CREATION OF IRRIGATION POTENTIAL USING SURFACE WATER
Period Investment Rs. in crores
Potential in ‘ 000 hectares
Pre-Plan Up to 1951 n.a. 455 First 1951-56 4.15 462 Second 1956-61 5.08 479 Third 1961-66 20.87 534 Fourth 1969-74 56.08 696 Fifth 1974-78 93.29 808 Sixth 1980-85 219.95 920 Seventh 1985-90 379.78 959 Eighth 1992-97 695.68 994 Ninth 1997-2002 1013.41 841*
Note:
1. The financial and potential status of minor irrigation schemes under the district sector is available up to end of 1996-97 only.
2. * Progress indicated against Ninth Plan is up to end of March 2001, based on the Census 2000-2001 on Minor Irrigation works.
6
Data on potential created
1.11 There has been considerable discrepancy in the figures of irrigation potential created as furnished by the minor irrigation authorities at different points of time and the department of Economics and Statistics [DES]. The DES figures regarding the potential created are as much as double those of the department of Minor Irrigation. Similar discrepancies in the data occur with regard to utilization of the potential. Despite some efforts no reconciliation has been effected with regard to these two sets of figures.
1.12 In 2000-01 the Census of minor irrigation works carried out by the Government of India disclosed a third set of figures. Since this data was obtained after a detailed survey of individual schemes conducted under the supervision of the minor irrigation authorities and officially communicated by the State government to the Government of India, the Commission has decided to accept the Census figures as the authentic statistics regarding both the creation of potential and utilization.
1.13 The comparative data regarding the potential created so far in minor irrigation and the utilization as furnished by the Minor Irrigation authorities, the department of Economics and Statistics and the Census 2000-01 is given in the Table below :
Table IV
Potential created and utilized during 2000-01under minor irrigation. in hectares
According to Category of M.I. Scheme M.I. Department D.E.S. Census 2000-2001
A Potential created Tanks
6,93,341
-
4,04,281
L.I. Schemes 94,282 - 3,11,767* Others 1,38,022 - 1,24,705
Total: 9,25,645 - 8,40,753 B. Potential Utilised Tanks
3,03,837
2,32,562
L.I. Schemes 3,39,078 2,52,725 Others
Categorywise
break up not furnished 1,21,753 59,652
Total: 3,15,215** 7,48,267 5,44,939 (*) Includes 2,07,726 hectares under private L.I. schemes. (**) Comprises 1,28,898 hectares in the State sector and 1,86,317 hectares in the district sector.
7
1.14 Although the Commission relies on the figures compiled in the Census, it strongly recommends that the reasons for such large variations need to be looked into seriously as this will have a bearing on not only the State’s interests in the disputes regarding the sharing of waters of the Krishna and Cauvery rivers, but also on the Master plans for irrigation projects in these two basins.
1.14 a What is surprising, from the information given by the Census, which is not forthcoming in the statistics furnished by the department of Minor Irrigation, is the large number of private lift irrigation schemes. It is probable that many of them are unauthorized. Even with regard to the authorized schemes, there is no information as to whether the meager annual levy is being collected or not.
1.15 Regarding private minor lift irrigation using surface waters, the Commission recommends the following :
(a) Regularisation of all cases of private lifts where permission has not been obtained from Government for using surface waters, levying a one time penalty of Rs. 100 per acre and continuous payment of the annual levy at the rates recommended in sub-para (b) below.
(b) Increase of the annual levy on private lifts from the present meagre
rate of Rs. 4 per acre (or Rs. 10 per hectare) to at least Rs. 10 per acre (or Rs. 25 per hectare).
(c) Non-payment of the prescribed levy on such users for a successive
period of three or more years should be treated as an offence under the Irrigation Act, attracting deterrent punishment.
(d) Levy on such users should be collected by the Water Resources
department as it deals with the subject of according permission for such private lifts using surface waters.
1.16 All the figures discussed so far pertain to minor irrigation using surface water.
The Planning department does not include figures of minor irrigation potential created from ground water sources since the data provided is considered to be unreliable. Hence the data regarding the creation and utilization of minor irrigation using ground water resources is not discussed in the Report.
8
Utilisation of irrigation potential 1.17 The utilisation of the irrigation potential created has been abysmally poor as
can be seen from Table IV. If the potential created and utilization of minor
irrigation tanks alone are considered and if the potential indicated by the
department of Minor Irrigation is considered to be the original potential
created and the potential indicated by the Census the actual potential now
available, then it is evident that the potential has been reduced by 2.9 lakh
hectares. The actual utilization is approximately 33 percent of the potential
created. The enormous wastage of public resources involved in the
construction of minor irrigation works is due to the following reasons:
1.18. Reasons for loss of potential and poor utilization
a) Inadequacy of yield due to insufficient inflows
b) Loss of storage due to silting of minor tanks as a result of deforestation
and over-cultivation in the catchment
c) Encroachment of water spread areas for cultivation and other purposes
d) Denudation of vegetative cover and absence of soil conservation measures
in the catchment areas
e) Leakages through bund, waste weir and sluices
f) Deteriorating condition of the tanks / head works and canal system due to
poor maintenance and ageing
g) Unsatisfactory distribution of available irrigation water amongst irrigators
h) Poor and inefficient water management practices
i) Want of adequate funds for proper and satisfactory O & M works
j) Damage to lands due to water logging, salinisation and alkalinization.
k) Absence of drainage works
l) Lack of or inadequate conjunctive use of canal and ground water
m) Poor participation by beneficiary farmers
1.19 In a nutshell the reasons for the massive under utilization of the minor
irrigation schemes are due to very poor maintenance of the system, poor and
inefficient water management, denudation of the catchment area leading to
9
soil erosion and silting of the tank and lack of involvement and poor
participation by the water users.
Allocation of funds for Operation and Maintenance
1.20 The Commission has been unable to obtain information from the department
of Minor Irrigation which could help them to present an analysis of (a) the
budget allocations for O&M of minor irrigation works, (b) the expenditure
presently being incurred (indicating separately the salary and works
components) and (c) the minimum requirement for satisfactory O&M of the
system. However the department is of the opinion that the funds made
available at present are not only inadequate but adhoc. It is not possible to
separate the salary and works components in the budget provided. Because of
the total non involvement of the water users in the construction and
maintenance of the schemes, they do not take action to do basic repairs or
minimum maintenance when the funding by the government is erratic or
inadequate. This results in the silting up of the canal system and the tank bed,
leading to encroachment of the tank bed and drastic reduction in the water
holding capacity. Damages to the tank bunds, waste weirs and tank sluices are
not repaired, leading to further damage.
1.21 The Commission had suggested, after a detailed study of existing allocation,
the following scale of allocation of funds for O & M of major and medium
irrigation projects :
Rs. per hectare
1) Fully lined canal system 350 2) Partially lined canal system 400 3) Unlined canal system 450
1.22 The Commission recommends a similar approach for the funding of O & M
for minor irrigation.
10
Management of water
1.23 The irrigation system of the State is designed to provide only protective irrigation, mostly of a simple light irrigated crop. However there is flagrant violation of all rules and the owners of lands in the higher reaches grow water intensive crop such as sugarcane and paddy with the result that tail enders are deprived of water.
1.24 There is also much wastage of water. Not only is conjunctive use not made of
ground and surface water but economic use is not made of water through drip and sprinkler irrigation.
Denudation of catchment areas 1.25 The catchment areas of the tanks are watersheds (generally micro watersheds).
When rain falls, water flows from the ridgeline across the hills and uplands, down to the plains and into the tank. In addition, feeder channels such as brooks and streams carry heavy quantities of water from the upper levels down the slopes and into the tank. However, the feeder channels flowing in the catchments to feed water to the tanks have now been diverted, encroached, clogged, filled with sand and obstructed by vegetative growth. They have thereby been rendered incapable of conveying adequate quantities of water to the tanks. In this manner the water holding capacity of the tanks has been reduced.
1.26 In addition, the slopes of the ridges and hill tops, which were once full of
vegetative growth are now denuded of vegetation, and are barren lands subject to a high degree of soil erosion due to ravages of wind and weather. The lands other than the hills and slopes, that is, the plain cultivable lands in the catchment are unprotected without contour bunds or vegetative bunds and their fertile top soil has been drained down to the feeder channels and tanks. Thus, both the uplands and plain lands are rich sources for the conveyance of silt to the tanks, caused by the velocity of winds and ferocity of rains. The deposition of silt on the floor of the tank has further reduced the water holding capacity of the tank.
11
Lack of involvement of water users
1.27 The persons whose lands are irrigated by the minor irrigation schemes
constructed by the government as well as those who make use of the water in
different ways have not been consulted while constructing the scheme or
managing it. They have made no contribution even to the management of the
scheme after it was constructed. There is no democratic process of
determining the equitable distribution or use of the water. The people
therefore feel that it is a government scheme in which they have no role to
play except get what they can out of it. This makes them reluctant even to pay
the water rates. The reluctance to pay the water rates is largely attributable to
dissatisfaction with the inefficient and negligent management of the system,
resulting in poor availability of water. In turn, the poor collection of water
rate results in less investment in maintenance.
Irrigation water rates
1.28 A pre-requisite for fixing any water rate is that the water supply to each farmer
should not only be adequate but also dependable and timely. It has been
opined by experts that the irrigation water rates should be (a) on crop basis, (b)
within the paying capacity of the farmer, irrespective of the capital investment,
(c) differentiated with regard to the category of irrigation projects. 1.29. Different authorities have suggested different criteria for fixing irrigation
charges. These are indicated briefly below:
(a) Irrigation Commission, 1972
The water rate should range between five to twelve per cent of the gross
income of the farmer, the upper limit being twelve per cent. It should be
within the paying capacity of the farmer and should aim at full utilisation of
the available supply
(b) Vaidyanathan Committee 1992
The level of cost recovery to be aimed at, in the first phase, should at least
cover the O&M costs and one per cent interest on capital employed.
12
(c) National Commission for Integrated Water Resources Development
Plan 1999
The water rate should cover the operation and maintenance cost plus one per
cent of the agricultural income.
(d) 10th Finance Commission
Irrigation water rate receipts should not only cover the operation and
maintenance cost but should also cover one per cent per annum of the capital
investment.
1.30 The latest set of rates notified on 13th July, 2000, may be seen in Table V.
TABLE V
STRUCTURE OF WATER RATES @ Rs. per acre I. Normal rate: Flow Irrigation - sugarcane 400 -paddy 100 -cotton, wheat, groundnut, garden crops, sunflower 60 -jowar, ragi and other semi-dry crops 35 -manurial crops 17 For water users’ associations Rs. 12 per 1000 cum. Lift irrigation -sugarcane and paddy thrice the normal rates for flow irrigation. -other crops twice the normal rate for flow irrigation. II. Penal rates: -violation of cropping pattern five times normal rate -unauthorised irrigation fifteen times normal rate III. Non-agricultural uses: -domestic purposes Rs. 375 per mcft. -industrial use: * from natural sources Rs. 1800 per mcft. * from irrigation works Rs. 3200 per mcft. (*50 percent of the rate if water is returned to the source unpolluted)
13
1.31 The practice so far has been to fix water rates on the basis of crops. The
evolution of crop-based water rates fixed by the Government of Karnataka and
the percentage increase from 1976 to date are furnished in Table VI.
Table VI EVOLUTION OF WATER RATES
Water rate in rupees per acre
Crop
in 1978 in 2000
Increase in Rs.
(as a %) Sugarcane 300 400 100 (33) Paddy 35 100 65 (186) Semidry 20 35 15 (75) Wheat 30 60 30 (100) Groundnut 20 60 40 (200) Sun flower - 60 - - Cotton 50 60 10 (20) Garden - 60 - - Manurial 9 15 6 (67)
1.32 Table VII gives details of the water rates for minor irrigation prevailing in
some of the States.
Table VII
Name of State Water rate for minor irrigation
( Rs. per hectare ) Andhra Pradesh 250
Punjab 87.50 to 175
Tamil Nadu 150 to 175
Maharashtra 119 to 297
Note: In Punjab, the rate varies with the crops. The rates are very low and are proposed to
be revised over the next few years. In Tamil Nadu, the rates are different for wet
crops and dry crops. The new rates have come into effect in July 2003 and are
proposed to be revised at regular intervals. In Maharashtra, the rates are for canal
flow water. They have been in force from July 2003. The rates vary with the crops.
The rate of Rs. 119 is for advance watering (in kharif season for rabi crops) and the
rate of Rs. 297 is for crops such as sugarcane, banana, and fruits.
14
1.33. During visits to the States of Punjab and Haryana, members of the Commission observed that the Irrigation Department is responsible for ensuring the quantity of water supplied at the head of each lateral/water course, to the Water Users Societies (WUS). The WUSs, on their part, are responsible for the equitable distribution of water to each of the farmers/members of WUSs.
Demand, collection and balance of minor irrigation water rates 1.34 According to the Irrigation Act the water rate demand is determined after a
joint inspection of the farmer’s land by the representatives of the Minor Irrigation and Revenue departments. However this does not usually happen and the water rate demand is often raised on the basis of hearsay or by merely updating the previous year’s figures while sitting in the office. The water rate demand is raised by the department of Minor Irrigation every year. The demand is then communicated to the Revenue department. The Revenue department collects the water rate from farmers along with other dues such as the land revenue. The Revenue department does not however communicate to the department of Minor Irrigation how much water rate is collected. The water rates demands as per the Water Resources department and the demand, collection and balance figures, according to the Revenue department, for the years 1996-97 to 2000-01 are furnished in Table VIII below:
Table VIII Rs. in crores
Demand as per WR Dept. As per Revenue Department Year Maj & Med Irrigation
Minor Irrigation Total Demand Collection Balance
Normal Rates 1996-97 8.73 1.39 10.12 37.77 14.07 23.70 1997-98 8.81 1.41 10.22 32.70 10.82 21.88 1998-99 8.93 1.48 10.41 36.23 16.15 20.08 1999-2000 8.80 1.29 10.09 40.74 10.84 29.90 2000-01 17.93 2.11 20.04 31.08 13.03 18.05
Penal Rates 1996-97 45.11 1.82 46.93 232.91 0.15 232.761997-98 51.52 2.28 53.80 251.23 0 251.231998-99 51.82 2.26 54.08 259.60 0.45 259.151999-2000 56.07 1.81 57.88 246.48 0.23 246.252000-01 82.63 5.08 87.71 248.20 0.20 248.00
15
1.35 The demand of the Revenue department includes that of major, medium and minor irrigation projects since categorywise figures are not available with the Revenue department. It also includes the arrears of previous years. Because of this there are substantial differences in the demand figures furnished by the two departments.
1.35a Table VIII shows how poor has been the collection of water rate by the
Revenue department. In fact, no water rate is demanded or collected for most of the minor irrigation tanks since there has been no collection of water rates for tanks in the district sector for the last few years because of the misreading of a government order.
1.36 One of the reasons given by the Revenue department for the poor collection is that there is invariably delay on the part of the department of Minor Irrigation or the department of Water Resources in communicating the demand, resulting in accumulation of arrears. The Water Resources department, on its part, denies this.
1.37 In the department of Water Resources, including the Minor Irrigation sector, once the demand statements are finalized, there does not appear to be any compilation of this important data (of area irrigated and demand raised) at the highest (Chief Engineers’ or the Secretariat) level for monitoring as well as for ready reference whenever required. It is necessary that such data be compiled and computerized for easy monitoring.
Feasibility assessment while sanctioning new minor irrigation projects
1.38 There is no ceiling on the cost per hectare of land in the ayacut while considering the sanction of a new minor irrigation scheme. The cost benefit ratio is however fairly roughly computed. The project can be sanctioned if the ratio is 1:1 although there are no hard and fast rules. The problem of course is that the benefits are nowhere near what are envisaged while sanctioning the project, because, as already seen, the utilization of potential, as expressed in hectares, is a very small percentage of the potential created. Even the potential created shrinks because of silting and encroachments both in the tank bed and in the field channels.
16
1.39 On the other hand, the costs are often much higher than those calculated
because of escalation of costs due to delay in executing the project. The main
reason for delay is the non provision of adequate funds for completing the
project in the stipulated time. The available funds are spread thinly over a
large number of projects, leading to time over runs and escalated costs.
1.40 At present for investment clearance only the engineering infrastructure works
of reservoir and canal network have been and are being considered to the
exclusion of the development works in the irrigation command area.
However without the field channels and command area development water
will not reach the fields of farmers.
1.41 All this makes a mockery of the exercise of assessing the cost benefit rates
while sanctioning new minor irrigation schemes.
1.42 The Commission recommends the following:
1. While taking up the construction of a minor irrigation project, thorough field and geo-technical investigations have to be carried out and plans and estimates drawn up according due consideration to not merely the irrigation system but also to the command area development and at the same time keeping in view the benefit cost ratio aspect. All this should be completed within a period of one year.
2. The construction of a project should be completed within a period of one
year to avoid cost and time over run and consequent delay in realising the intended benefits.
3. There should be continuous review of the progress of each component of work under execution to ensure that the physical and financial progress are in pace with the awarded contract.
4. There should be a mid-term appraisal of the likely cost of the project as
well as the benefit cost ratio.
17
5. After a project is completed in all respects and is functioning satisfactorily for a few years, there should be a post-facto evaluation, to be carried out by an independent and reputable agency.
6. No new schemes should be taken up in the district until the old schemes
are completed in all respects, including the development works in the command area. This should be made a statutory requirement by amending the Irrigation Act.
1.43 To sum up, the minor irrigation sector presents a rather disturbing scenario.
Reliable data is not available for ground water works. Even for minor
irrigation using surface water, there is considerably discrepancy in the data
collected from different sources with regard to both potential created and
utilized. Moreover, no data is available with regard to the district sector for
most years. However, by any estimate, the actual utilization is only a fracture
of the potential created at great public cost. The recovery of water rates is so
poor that it can cover not even a small part of the cost of maintenance of the
system.
1.44 The Commission, after discussions with the Director, Watershed
Development, the Executive Director of Jala Samvardhana Yojana Sangha
(JSYS), the Secretary and other officers of the Minor Irrigation department
and the Secretary, Rural Development and Panchayat Raj, came to the
conclusion that the most important reason for the poor utilization of minor
irrigation works is the almost total lack of involvement of the water users in
the management of the schemes. The remedy therefore is in setting in place a
system whereby the minor irrigation works are managed, in a democratic
manner, by the persons using them. The Commission recommends that this
may be done in the following manner : 1. Minor Lift Irrigation Schemes (LIS)
1.45 As per the Census 2000-2001, there are 69,423 lift irrigation scheme using
surface waters, with a total ayacut of 3,11,767 hectares. Of these, 462 LIS with
a total ayacut of 94,282 hectares are in the State sector, under the control of
18
the Minor Irrigation department. The remaining 68,961 lift irrigation schemes,
with a total ayacut of 2,17,485 hectares are reported to be private lift irrigation
schemes, not all of which have the permission of the government, as required
under the Irrigation Act.
It is reported by the Minor Irrigation department [MI department] that nearly
60 percent of the LIS in the department are sick and that even the remaining
are not functioning to their full capacity, for reasons such as non-availability
of adequate water from the source, reduction in the capacity of the intake
structure due to silting and improper maintenance, rusty pipes and aging
mechanical equipment and dilapidated distribution systems.
Considering the condition of the existing government owned lift irrigation
schemes as mentioned above and the mounting arrears of unpaid energy
charges, the Commission recommends encouraging, wherever possible, the
formation of societies of beneficiaries to operate and maintain entirely on
their own, such of the State sector LIS which are in a reasonably
satisfactory condition of operation.
Those lift irrigation schemes for which societies are not formed, if any, in
the State sector, should be transferred to the control of the concerned major
irrigation zones, for operation and maintenance.
2. M.I. Schemes other than Tanks and LIS
1.46 With regard to minor irrigation schemes, other than tanks and lift irrigation
schemes, the Commission recommends the following:
1. Barrages across major streams / rivers including those under
construction, presently under the control of the Minor Irrigation
department, should be handed over to the control of the respective major
irrigation zones in the department of Water Resources.
19
2. All the remaining categories of minor irrigation schemes such as
anicuts, pickups and bandharas including those under construction,
should be handed over to the respective Z.P.Engineering Divisions under
the control of the Chief Engineer, Rural Development Engineering
Department (RDED), in the Rural Development and Panchayat Raj
department [RD&PR].
3. Minor Irrigation (MI) Tanks
1.47. There is already a direction from government that all MI tanks in the
command areas of major irrigation projects, including those under
construction, should be transferred to the administrative control of the
respective Chief Engineers of Major Irrigation. The Commission recommends
that transfer of all such tanks to the major zones be completed immediately,
if not already done.
1.48 The Commission further recommends that action be taken, in the manner
described in this Report, to transfer all the remaining functional tanks to the
control of the Chief Engineer, RDED, under the RD & PR department.
1.49 Tanks are the most important source for minor irrigation using surface water.
They are invaluable assets created to provide water to meet multifarious needs
such as drinking water, cultivation, fish rearing, livestock breeding, etc., in
rural areas. Very poor maintenance and repair, coupled with neglect of both
the catchment and command areas, have resulted in reduction in the potential
created and loss of valuable public assets. According to the MI Department,
as on 31/3/2000, the number of tanks both under the State and ZP sectors were
36,686, with a combined irrigation potential of 6.93 lakh hectares. This was
probably the irrigation potential created when the tanks were first constructed.
In the year 2000-01, the MI Census was carried out according to which only
25,267 tanks were found to exist, with irrigation potential of 4.04 lakh
hectares. The utilization of these tanks, according to the Census, was only
2.32 lakh hectares. This lays bare the following facts:
20
a) (36686 – 25267) or 11419 tanks are in a state of total disrepair, are
incapable of storing water and hence are non-functional.
b) The irrigation potential created has gone down by (6.93 – 4.04 ) or 2.89 lakh
hectares.
c) The potential utilized is reduced by (6.93 – 2.32) or 4.61 lakh hectares.
1.50 The Commission has noted that the reason for the heavy loss of irrigation
potential as well as its inadequate utilization has been the maintenance of
tanks by government and the zilla panchayats without public participation or
the involvement of tank users’ groups. Besides this, the government has failed
to recognise the inter-dependency of tank systems, i.e., inter-dependency
between up-stream and down-stream tank systems in a cascade as well as the
inter-dependency between the catchment area and the command area with
respect to a single tank. In view of this the Commission recommends for
people’s participation in the construction and maintenance of M.I. tanks. Tank Panchayat Regulation 1911
1.51a. The problem of enlisting the assistance of the community in the maintenance
of tanks is not of recent origin. This is evident from the Tank Panchayat
Regulation 1911.
Normal maintenance of a tank involves the following:
a) Periodical removal of silt from the tank bed and canals
b) Periodical earth work to the bund wherever damages have occurred
c) Periodical repairs to the tank sluice and waste weir
d) Keeping the catchment area free from encroachment and checking silt
coming into the tank
21
Formerly, the maintenance of a tank or channel was primarily the
responsibility of the village community of which the beneficiaries were an
important part. However, with the passage of time, destruction by floods, wars
and visitation by famines, the Princely State of Mysore (now Karnataka) had
to meet the expenses of the British army. Since land was always the main
source of revenue, all efforts were made by the government to restore and
repair the irrigation works not only to increase food production but also as a
source of revenue. However, over a period of time, this led to the realization
that undue importance was being given to government’s responsibility in the
upkeep of tanks, altogether ignoring the farmers’ liability although
maintenance of tanks involved ordinary earthwork and repairs connected with
the tanks and their subsidiary components. Having realized that it was
impossible for the government to undertake repair and maintenance of
thousands of tanks in the State, it was considered necessary to hand over to the
villagers such tanks as were either already in a state of efficient repair or had
been restored to the required standard. Certain rules were promulgated in this
regard in 1873 AD, prescribing therein the various duties and responsibilities
of the concerned, from the Deputy Commissioners down to the village Patels.
In spite of this, it was observed that the maintenance work was neglected
mainly due to disappearance of the community spirit of the villagers and the
slackness of the concerned village officers.
It was decided that the remedy was to enlist the co-operation of the villagers
by giving them a voice in the measures necessary for maintenance of their
tanks, with powers to execute the works and control over funds that might be
set apart for the purpose. Accordingly, the Tank Panchayat Regulation Act
1911 was enacted, facilitating constitution of village level Tank Panchayats
(TPs), with the following provisions:
22
a) TPs for any village if not less than two-thirds of the ryots holding not less
than half the area of wet lands under the tank so desire
b) TPs to comprise the Patel as Chairman, the Shanbog and three or more
members elected by the ryots. One fourth of the elected members to be
from those ryots who are not holding wet or garden lands
c) Term of office of elected members of the TPs to be three years
d) TPs to control funds comprising (i) collection from ryots who do not do
assigned duties or desire to commute labour into money payment, (ii)
proceeds from sale of fish (in the tank)/trees/grazing rights in tank
bed/cutting or removing grass on the tank bund, etc., (iii) rent/share of
produce from temporary cultivation in tank bed, (iv) grant from
government, from irrigation cess and (v) any other grant/loan from
government to the TPs
e) Power to regulate issue of water from the tank, considering water available
in the tank and the area to be cultivated with sugarcane/wet crop.
Though 127 such TPs were existing by 1934-35, only seven worked actively
and few were reported to have collected funds. These TPs failed to perform
and became defunct due to one or more reasons like (i) lack of co-operation
among the ryots, (ii) lack of enthusiasm in the Patel / Shanbog to enforce the
customary obligations, (iii) the Patel / Village Head was reduced to a mere
titular head, (iv) the Patel was no longer residing in the village, (v)
development of social or economic groups / factions in the village, (vi) land
holders migrating to urban centers. All these developments and the failure of
subsequent measures led to the government ultimately taking over the entire
management of the minor irrigation tanks and inclusion of a necessary clause
in the Mysore Irrigation Act 1932, during 1952.
23
Community Participation
1.52 The need to secure people’s participation in minor irrigation tanks from the
construction stage itself is borne out by the project appraisal report of the
World Bank aided Community Based Tank Management Project [CBTMP]
under the JSYS released in March 2002. In the said appraisal report, it is stated
that the unsustainability of the World Bank financed Karnataka Tank
Irrigation Projects (1981-89) was mainly due to the lack of involvement of
tank users in the project. The main project component of this consisted of
construction of 120 to 160 MI tanks, which was revised to 78. Finally 34
tanks were completed to irrigate a command of 25,000 hectares. The
increased cost, initial delays, etc., reduced the rate of return from 20 percent at
the appraisal stage to 4 percent on completion. Minimal farmer (and village)
involvement in planning and implementation of the project contributed to the
failure of the project. This was the crucial lesson which emerged from the
project. After the project was completed, the limited farmer interest that did
exist declined with the result that many tanks are now in a state of disrepair.
Keeping these hard realities in view, the Government of Karnataka (GOK) has
issued a State Water Policy which emphasises community participation in
water management. GOK has also approved a vision statement describing the
State‘s long-term strategy for the development of MI tanks. The State
government is committed to ‘community based’ and ‘demand driven’
approaches for tank development and initiating a process of transfer of
management of all minor irrigation tanks to village level user groups (vide the
appraisal report for Karnataka CBTMP - March 2002).
1.53 In fact, legal enactments for the formation of Water Users Societies (WUS),
which are empowered to (a) improve the irrigation infrastructure (b) receive
and distribute water (c) collect water rates have already been passed. The Jala
Samvardhane Yojane financed by the World Bank, commenced from
31/08/2002 and will end by 31/01/2009. This project will cover 2000 tanks
with an ayacut of 72,000 hectares. The project aims to demonstrate the
viability of a community-based approach to tank improvement and
management, by entrusting the main responsibility of tank development to
24
village level user groups. If successful, the project would provide a useful
model for adopting this pragmatic approach Statewide.
1.54 However, in view of the dismal scenario in respect of the upkeep of minor
irrigation tanks, the Commission considers that it is not desirable to await the
outcome of the JSYS project before taking action to involve in an organized
manner tank users in the maintenance of tank systems.
1.55 At present, out of 36,686 MI tanks, 33,364 tanks with an ayacut area of less
than 40 hectares are with the zilla panchayats and the taluk panchayats. Only
3,322 tanks are under the control of the department of Minor Irrigation. These
are the major tanks, with an ayacut of 3. 91 lakh hectares.
The Commission is of the opinion that in order to improve the maintenance
and make optimum use of these valuable assets, all the tanks, including the
larger ones, should be under the control and supervision of the persons
actually benefiting from them. In order to do so it will not be sufficient to
hand them over to the zilla panchayats or the taluk panchayats. The ongoing
debate is whether the tanks should be managed by tank user groups (which
would include not only the people using the water for the purpose of irrigation
but those who use it to grow fish, for drinking water purposes for themselves
or their cattle and to wash clothes) or by the gram panchayat. According to
JSYS, which is a World Bank assisted project, the beneficiaries or stake
holders for an irrigation tank comprise of all the people in the village in the
boundaries of which the tank and its ayacut falls since they are all in one way
or another affected by the tank. In the JSYS after a period of social awareness
raising and conscientisation with the help of NGOs (this has taken about two
years in the initial period but may take less time hereafter) the grama sabha
(that is, the community of all the adults in the village – this will include a man
and a woman from every family) selects its representatives to form the
executive committee for the management of the tank. For major decisions,
however, such as whether any water should be released at all for irrigation in
years when the water level is very low, the executive committee has to seek
the orders of the gram sabha. All interests are represented on the executive
25
committee and not only those of the owners of irrigated lands. Although
under the World Bank assisted scheme, substantial assistance is given to each
tank under the Integrated Tank Development Plan (ITDP), it is mandatory that
10 percent of the total amount should be contributed by the village
community. The Appendix gives information with regard to 68 tanks taken
up in the first and second phase of the JSYS (the project covers 2000 tanks)
with details of total cost of the project and the community contribution. The
community contribution has been forthcoming in all these cases, since it is
only thereafter that the JSYS releases money for the project. Obviously the
stake holders will take an interest in the proper execution of the project and
play an active role since they have contributed to the cost of the project.
This concept, that the best way to ensure proper use of a public asset, is to
hand it over to user groups, has been accorded formal acceptance through
enactments in various States. Andhra Pradesh, for instance, has taken several
major steps towards economic reform in the irrigation sector. The State has
10292 water users associations and 174 distributory committees. The Andhra
Pradesh Farmers Management of Irrigation Systems Act, 1997 creates ‘Water
Users Association’ (WUA) in all irrigation projects in the State, gives water
rights to the WUAs, provides them functional and administrative autonomy,
enables them to resolve conflicts themselves and enables improvement of the
irrigation systems by the WUAs based on resources raised by the WUAs
themselves.
There have been arguments in favour of handing over minor irrigation tanks to
the gram panchayats instead of waterusers associations. The argument is that
the panchayat is the elected body at the “grass root” level and it is not a
healthy trend to create new bodies and associations which bypass the
panchayat. This also sows the seeds of potential conflict between the
panchayat and the waterusers associations. As a public asset the tank should
belong to the gram panchayat and not to a private group of individuals. It is
also possible that the waterusers associations will fall apart and disappear once
the external funding stops in a project such as the JSYS. At the same time
the JSYS and NGOs argue that the panchayat consists of six or seven villages
26
whereas the tank and its ayacut may fall within the boundaries of just one or
two villages. If decisions regarding the tank are taken by the panchayat it
would mean that persons who are not stakeholders would be taking the
decisions. It is also possible that the revenue from the tank will be used for
other purposes by the panchayat.
The Commission, after detailed discussions, has come to the conclusion that a
via media is possible. The gram sabha should elect the persons who will
represent different interest groups. These persons, along with the panchayat
members who live in and represent the villages within the ayacut of the tank,
will form a sub committee of the panchayat (GPS) which should manage the
affairs of the tank. The panchayat subcommittee will be constituted under
Section 61 (A) of the Karnataka Panchayat Act 1993. Women, who are an
important interest group, either as persons who work on the land, whether or
not they own it, or as persons who depend on the tank in different ways,
should constitute at least 33 percent of the composition of the subcommittee.
The owners of lands at the tail end of the irrigation channels should also be
represented in the subcommittee.
The panchayat subcommittee should attend to work relating to maintenance
and repair of tanks as well as distribution of water. Water rates should be
levied and collected by the panchayat subcommittee. The water rates should
meet some portion at least of the annual O & M charges and should be
approximately 25 percent of the water rates for major and medium irrigation
schemes.
It is quite possible that the panchayat will succeed in collecting the water rates
where the village accountant failed. Poor service is one of the main reasons
for poor collection of water rates. If the farmers are certain that the money
collected will be utilized to improve services, they will be willing to pay the
charges.
27
The Commission therefore recommends that the panchayat subcommittee be
permitted to utilize 90 percent of the water rate collected for the maintenance
and improvement of the tank and remit 10 percent to government.
Similarly, fishing rights may also be given to the panchayat subcommittee and
the revenue from this should also be utilized towards the maintenance of the
tank.
Government funds for maintenance should also be routed through the
subcommittee.
The accounts of the subcommittee should be audited every year and there
should be total transparency in its functioning. When important decisions
have to be taken the subcommittee should revert to the gram sabha.
The services of NGOs as well as experts in various fields such as in
agriculture or in the economic use of water should be utilized by the panchayat
subcommittee.
In the case of large tanks where the ayacut is spread over the area of several
panchayats, a federation of panchayat subcommittee should be formed. Such
cases may not be many. Even in the case of tanks with ayacuts of 1000
hectares and above, not more than four or five panchayats will be involved.
Although there is some difficulty of co-ordination in such cases, it is not
insuperable.
Recommendation
1.56 The Commission recommends that all minor irrigation tanks, including
those with ayacuts of between 40 and 2000 hectares which are presently in
the State sector, should be handed over to gram panchayat subcommittees
constituted under Section 61 (A) of the Karnataka Panchayat Raj Act, 1993.
The subcommittees will be responsible for maintenance and repair of the
tanks. Government funds which are budgeted for O & M should be given to
28
the subcommittees. They will levy and collect water rates which they should
use for the improvement of the tank. Technical assistance should be given to
the subcommittees by the engineers of the Irrigation department. The
Irrigation Act should be amended accordingly.
1.57 Administrative reorganization is required to give technical support to the GPS
in repairing and maintenance of the tanks.
Administrative Reorganisation
1.58 At present tanks and other minor irrigation works with ayacuts up to 4
hectares are being maintained by taluk panchayat samithies and those between
4 hectares to 40 hectares are being maintained by the zilla panchayats. The
Minor Irrigation department is responsible for the maintenance of all MI
works with ayacuts of between 40 and 2000 hectares. In the zilla panchayat set
up there are one or two executive engineers at the district level (there are 38
executive engineers in the zilla panchayats with two each in Bangalore Rural,
Belguam, Bellary, Gulbarga, Hassan, Kolar, Mandya, Mysore, Shimoga,
Tumkur and Uttar Kannada districts and one in each of the remaining districts)
and one assistant executive engineer for each taluk. These executive engineers
and asst. executive engineers of the zilla panchayat are in overall charge of
the maintenance of the minor irrigation works, roads, buildings and drinking
water supply in their respective jurisdictions. For the entire State there is a
chief engineer Rural Development Engineering Department (RDED) who is in
overall charge of the minor irrigation works as well as works related to roads
and buildings of all the zilla panchayats. The chief engineer, Minor Irrigation
(South), Bangalore and the chief engineer, Minor Irrigation (North), Bijapur
are responsible for the maintenance of minor irrigation works in the State
sector, that is for works with ayacuts of between 40 and 2000 hectares in their
respective jurisdictions. These two chief engineers are supported by 4
jurisdictional superintending engineers, 16 executive engineers and 46
assistant executive engineers.
29
1.59 Despite such high level supervision through three chief engineers’ zones to
take care of the maintenance of minor irrigation works, there has been
unsatisfactory maintenance of tanks and heavy reduction in the irrigation
potential.
Recommendation
1.60 Complete administrative reorganization is required to ensure better
supervision of minor irrigation works. This is also required because it is
proposed to transfer all minor irrigation tanks, bandharas, anicuts and pickups
to the gram panchayat samithis.
The Commission recommends as follows :
With the transfer of all minor irrigation schemes either to the Major and
Medium Irrigation zones or to the gram panchayats, the department of Minor
Irrigation should be abolished.
At the same time the zilla panchayat engineering divisions need to be
strengthened and a separate minor irrigation sector created within it. This can
be done by transferring the 46 sub divisions of the Minor Irrigation department
to the zilla panchayat sub divisions. The 46 assistant executive engineers will
supervise works pertaining only to minor irrigation in the district sector, since
this requires specialized knowledge. They will, if necessary, be assisted by
some assistant executive engineers in the zilla panchayat sub divisions, who
should specialize in minor irrigation. Some of the superintendent engineers
and one chief engineer from the department of Minor Irrigation should be
transferred to the department of Rural Development and Panchayat Raj to
supervise, monitor and give technical assistance for the constructions, repair
and maintenance of minor irrigation works.
30
The administrative set up should be as follows :
4000 hectares of contiguous irrigated land should have one irrigation sub-
division in the zilla panchayat.
Every 20000 hectares of irrigated land should have one irrigation division.
There should be one superintending engineer for every 5 divisions.
There should be one chief engineer (minor irrigation) in the department of
Rural Development and Panchayat Raj to look after only minor irrigation
works (this will be in addition to the present chief engineer RD & PR).
There should be a technical design and research cell in each superintending
engineer’s office as well as in the office of the chief engineer (minor
irrigation) RD & PR.
In other words there should be a separate establishment for minor irrigation
in the RD & PR department to supervise minor irrigation works in the
district sector.
Minor irrigation through the use of ground water is at present being dealt by
the department of Mines and Geology. This subject should be handed over to
the department of Rural Development and Panchayat Raj. The entire work
relating to minor irrigation, whether of surface or ground water, should be
dealt with by the minor irrigation engineers of the department of Rural
Development and Panchayat Raj.
As already described in the report, there is much confusion in the data
regarding minor irrigation which is collected by different agencies. The
Commission recommends that all data regarding minor irrigation should be
collected, updated and consolidated only by the minor irrigation sub
divisions and divisions of the RD & PR. The chief engineer (minor
irrigation) RD & PR should have the consolidated information relating to
both surface water and ground water minor irrigation for the entire State.
31
Taluk level and District level facilitation teams
1.61 Since heavy responsibilities are sought to be vested with the GPS / Panchayats
as mentioned above, the Commission considers it necessary that there should
be guidance provided to them through a taluk level facilitation team consisting
of engineers (AEE of the ZP Engineering Division, working in the taluk) and
experts from the Agricultural, Horticultural, Animal Husbandry, Forest and
Fisheries departments who are already working as taluk level representatives
of those departments. A representative to be nominated by an NGO
recognized at the district level for providing guidance and motivation should
also be a member of the taluk level facilitation team.
1.62 To oversee and assist the working of the GPS / Panchayats and the taluk level
facilitation teams, there should be a district level facilitation team to be
chaired by the CEO, ZP and comprising of district officers of the departments
of Agriculture, Horticulture, Fisheries and Forest along with the Executive
Engineers of the ZP Divisions and an NGO.
1.63 The taluk level facilitation team should assist the GPS to formulate one time
restoration plans and subsequently the annual action plans for maintenance of
minor irrigation works. The progress of the work should be monitored by the
facilitation teams at taluk and district levels on monthly and quarterly basis
respectively.
Release of funds
1.64 Once the tanks are handed over to the concerned GPS, basic repairs have to be
carried out with financial assistance from government as described hereafter.
After the basic repairs are carried out, the GPS will be responsible for annual
repairs and maintenance. The corpus of funds for closing this will consist of :
1. Retention of 90 percent of water rates collected.
2. The contribution made in cash and kind by the gram sabha of the village panchayat which is served by the tank
3. The O & M fund to be released by the zilla panchayat directly to the GPS.
4. Other funds such as earnings of the GPS from fisheries.
32
1.65 Note : This GPS should have its own bank account and it should be operated
under the signature of one member of the subcommittee and the secretary of
the gram panchayat who should be concurrently designated as member
secretary of the subcommittee. If the ayacut falls in the jurisdiction of more
than one gram panchayat, the subcommittee will consists of members from all
those panchayats as in the case of watershed subcommittees of similar type
mentioned earlier.
Legal issues
1.66 The State has already taken legal action to empower the tank users group to
take care of maintenance of tanks and to collect water rates, including
retention of 90 percent of the water rate collected for expenditure towards
maintenance.
The Commission recommends that this law should be further amended to
transfer the power of WUS to the GPS / consortium of gram panchayats in
case of MI tank ayacut areas. Similarly, there should be amendments of the
Karnataka Panchayat Raj Act 1993 to provide for powers to be given to the
GPS / consortium of gram panchayats to undertake all the activities sought to
be entrusted as per recommendations given in this report and also to control
the corpus of funds which they will be raising.
Basic repairs to be first carried out
1.67 GPS cannot be expected to begin the task of maintaining and repairing the
tanks in the extremely bad state in which they are now. So the first thing to be
done should be to identify the 11419 tanks which are non functional and
determine from among them those which it is not economically feasible to
repair and those which can be revived and restored by affecting some basic
repairs. This will have to be done by the engineers of the zilla panchayat.
Besides this, the basic repairs required to be done in the case of other tanks,
which are in use but where the potential and utilization have been reduced,
should also be identified. The repairs which may be required are described
below :
33
Tank structure rehabilitation
1.68 The tank structure consists of tank bund, waste weir and sluices.
a) Tank Bund The tank bunds are often damaged and eroded. According to
the Appraisal Report of the Karnataka Community Based Tank Management
Project March 2002 (CBTMP), in some cases the top width of the bund is
reduced to one metre. Seepage through the tank bund and vegetative growth
on it are also common problems. The remedial measures suggested are bund
cross-section, rehabilitation and improvement (increase of top width of the
bund to at least 2.5 metres). The vegetative growth has to be removed and the
bunds repaired.
b) Tank Sluices In some places, tank sluices are inoperable or are damaged,
with lack of water controlling arrangement, excessive seepage or blockage due
to siltation. These need to be repaired and provision of control devices made.
c) Waste weir Major damages in the waste weirs are noticed, which are
causing scouring and foundation failures. The damage to the waste weir wall
needs immediate repairs.
d) Canals Canals should be resectioned and redesigned and fully lined so as
to prevent transmission losses.
f) Tank bed The tank beds are silted up and their holding capacity has been
reduced. In some places cultivation has been taken up on the tank bed.
Encroachments will have to be removed.
Recommendations
The GPS be given one time assistance by the government for the restoration
of the tank structure by repair and restoration of tank bund, sluices and
waste weir and main canal. A rough estimate is that these basic repairs will
require approximately Rs.15,000 per hectare. This will require a huge one
time investment of approximately Rs.600 crores.
34
Desilting of tanks
1.69 Restoration of tanks through desilting cannot be taken up as part of the basic
repairs as it is too expensive. It can be done as a separate project provided
careful calculations are done to examine whether it is cost effective. Capacity
survey should be done for each tank. The yield should also be determined by
deciding whether desilting is required. One of the models for desiltation is
briefly described below.
1.70 Silted capacities of minor tanks can be restored through the ‘AMRIT’
(A Model for Rejuvenation of Irrigation Tanks) Model, which is a new
concept suggested by Sri. B.C.Angadi, Retd. Special Secretary to Government
of Karnataka, Public Works and Electricity Department.
1.71 This concept involves (a) excavating a small fraction (about 15 percent) of the
accumulated silt (b) raising the full tank level (FTL) by a small height
(between 0.30 mtr. and 0.50 mtr. in most cases) depending on the capacity lost
due to silting (c) using the excavated silt for filling up the land on the
periphery of the tank i.e., between the existing and new FTLs in order to avoid
additional submergence and also to raise the tank bund and its waste weir.
1.72 The advantages of this concept are reported to be manifold, important among
them being as follows:
i) Fresh submersion of agricultural lands will be avoided ii) The cost will be only about a sixth of the cost of totally desilting the
tanks iii) Justifies the investment criteria, the benefit : cost ratio being more than
1.3 iv) Provides fresh irrigation potential in the shortest gestation period v) Prevents a good portion of the existing tank bed from submersion
thereby releasing it for cultivation
35
1.73 All tanks will not benefit from the ‘AMRIT’ model. The World Bank aided Karnataka CBTMP March 2002 (under the Jala Samvardhane Yojane) Appraisal Report has cautioned against taking up desilting without a careful study and without ensuring watershed treatment of the catchment area.
“Desiltation of tanks without integrating the treatment of catchment areas would not be sustainable, as the degraded catchment area would continue to erode and refill the tank with silt.
Desiltation is expensive and needs to be done sparingly and in accordance with the expected benefits. Investments on other components of tank maintenance may be more efficient for additional capture and use of water.
There should be complete community involvement in the management of desiltation, otherwise this will not succeed.”
Command Area
1.74 Improvement of the distribution system in the command area of the tank, on farm development to ensure smooth flow of water and prevention of water logging and the economic use of water in the command area by use of sprinklers and drip irrigation systems are other measures to be taken up to improve the utilization of the irrigation potential created and to increase the ayacut. However, except for repair and desilting of the canals, these do not fall under the definition of ‘basic repairs’ and are to be carried out by the GPS with the funds they have collected through water rates and other revenues and the funds given to them by the zilla panchayats for O & M.
1.75 The tank system consists of –
a) catchment area which includes foreshore area and the natural feeder channels conveying water from the catchment to the tank
b) tank structure which includes the tank bund, the waste weir and
sluices and the tank bed (reservoir)
c) command area, including main canal and field channels
36
1.76 In the long run no improvement of the tank structure or the distribution system
will be effective unless care is taken to prevent erosion in the catchment area
which will result in silting of the feeder channels, the distribution canals as
well as the tank used itself. Denudation of the catchment area and consequent
soil erosion are the prime causes for the loss of irrigation potential.
Funding
1.77 As already indicated, the amount required for basic repairs to the minor
irrigation tanks will be approximately Rs. 600 crores. The basic repairs should
be completed within two years.
The amount required for capacity restoration through desilting should be
estimated after a careful assessment of which tanks will benefit from this
process and to what extent the desilting should be carried out.
New tanks will also have to be constructed. It is desirable to construct many
small tanks with ayacuts of between 20 and 40 ayacuts rather than a few large
tanks.
The State government should make a strong case to the Central government
for at least 50 percent financial assistance to complete basic repairs and
restoration of minor irrigation tanks as well as to make new tanks in the
drought prone areas of the State. The fact that Karnataka has a larger
drought affected area than any other State is an irrefutable argument.
The Commission however reiterates that incurring expenditure on
restoration of tanks or on new tanks is a waste of public money if adequate
funds are not provided every year for the maintenance of the tanks.
1.78 Catchment area treatment
a) Watershed technology is required to be applied to the barren slopes of the
catchment area. Grass may be grown as a first crop since it will bind the soil.
The hilltops, slopes and common lands can be covered by vegetative growth
37
of forest and horticultural species such as tamarind, mango and pogamia
(honge). Once the trees are ready tree pattas can be given to landless labourers
and marginal farmers to enjoy the benefits of the usufruct from government
and common lands. Needless to say, private lands will benefit the landowners
by such vegetative growth.
b) In a similar manner it is necessary to remove encroachments from the
feeder channels, strengthen their banks and grow trees along their banks. The
feeder channels should be intercepted at various points by constructing check-
dams, nala bunds, gully plugs and vegetative checks to prevent soil flow to the
tanks and conserve some water in situ (for extending moisture in adjoining
lands) and to allow excess water in the rainy season to flow without silt or a
much reduced silt to the tanks. These activities will provide employment
opportunities to landless labourers and marginal farmers residing in the
catchment of the tank command. The de-weeding and de-silting of the feeder
channels should be carried out simultaneously. The silt can be spread over in
the cultivators’ fields in the catchment area.
c) The foreshore areas of the tanks which lie in the catchment should be
protected by planting of trees in addition to contour bunding treatment. If
foreshores of tanks on the tank beds are encroached for cultivation, such
encroachments should be removed.
d) Construction of small water harvesting structures such as low cost farm
ponds, sunken ponds, mini percolation tanks and recharging of dried up open
wells by collection of surplus rain water as sources of water storage in the
cultivators’ fields can also be carried out as per existing practices of the
Watershed Department. All such treatments in these watersheds, besides
creating employment opportunities, will conserve soil and water in the
catchment and reduce soil flow to the tank to minimal levels.
38
Organisational arrangement for catchment area treatment
1.79 People’s involvement and participation is essential for effective watershed
development. However different models are used in different watershed
projects. In the Sujala World Bank project the implementation is through area
groups and self help groups. However, according to Hariyali guidelines of the
Ministry of Rural Development, Government of India (GOI), the gram
panchayats are to be made responsible for the implementation of the projects
at field level. In such a situation, the people’s group will have only an
informal relationship to the executive body, namely the gram panchayat.
Subsequent modifications of the Hariyali guidelines have suggested gram
panchayat subcommittees (GPS) as the executive body. The GPS will include
representatives of the area groups and self help groups besides the gram
panchayat members of that area.
Recommendations
1.80 The Commission recommends formation of watershed Gram Panchayath
Subcommittee (GPSs) under Section 61(A) of the Karnataka Panchayat Raj
Act 1993, with the co-option of representatives of people’s groups such as
area groups and self help groups. The whole gram sabha, which is a PRI,
shall be the general body and the GPS to be constituted as recommended
above shall be the executive committee of the gram sabha and self help groups
with assistance, training and monitoring provided by NGOs.
1.81 Watershed development teams at the district and taluk level, consisting of
officers from the Agriculture, Horticulture, Forest and Animal Husbandry
departments will assist the GPS in formulating and implementing the plans for
the watershed development of the catchment area.
39
Tanks in series
1.82 In some parts of the State, there are tanks in series, that is, tanks from higher
levels down to the lower levels, extending over a distance of several
kilometers from each other. In such cases, the catchment areas of the tanks
will also lie in series. That is, catchments of individual tanks will be micro
watersheds which, along with catchments of other tanks in the series, as a
whole, will tend to form a macro watershed. In that event, all the catchments
will have to be treated as micro watersheds, including the irrigated and un-
irrigated lands of the tanks in upper as well as lower reaches. Thus, all the
micro watershed will be treated and this will lead to the treatment of the entire
watershed.
Release of funds
1.83 These GPSs should have their own bank account, which can be operated under
the signature of two members of the subcommittees, one of them being the
Panchayat Secretary. The records, files, maintenance of accounts, etc., will be
processed and maintained by the Secretary of the subcommittee. Similarly, for
the GPS / consortium of panchayats in case the watershed area extends to
more than one panchayat, the funds will be released to the subcommittee of
the consortium of the panchayats and the secretary of the panchayat in whose
jurisdiction the major portion of the watershed falls, will be the secretary of
the consortium of GPSs.
40
‘e governance’
1.84 The Chief Engineer’s office, the offices of the Executive Engineers of each
Division and the offices of the Assistant Executive Engineers of each Sub-
Division should maintain, on their respective computers, the profiles of all the
existing minor irrigation schemes.
Information profiles to be maintained for various types of schemes are
indicated below, categorywise:
I. Minor Irrigation Tank
1. Name of the tank
2. Location a) Name of the village b) Taluk c) District
3. Name of the stream
4. Sub-basin
5. River basin
6. Catchment area, in sq. km.
a) Independent b) Intercepted
7. Average annual yield, in Mcum
8. Full Tank Level, in mtrs
9. Water spread area, in hectares
10. Storage capacity, in Mcum a) Live storage b) Dead storage
11. Utilisation, in Mcum
12. Annual evaporation loss, in Mcum
13. Bund a) Length, in mtrs b) Maximum height, in mtrs c) Top width, in mtrs d) Free board, in mtrs
41
14. Waste weir details
a) Type b) Length, in mtrs c) Spillage, in mtrs d) Maximum flood discharge, in cumecs
15. Registered ayacut, in hect
16. Cropping pattern, in hect a) Garden b) Wet c) Semidry d) Total
17. Canals
a) Left Bank Canal i) Length, in kms ii) Ayacut, in hectares
b) Right Bank Canal i) Length, in kms ii) Ayacut, in hectares
18. Year of construction
19. Cost, in Rs. lakhs Note: Each tank’s profile should be accompanied by a digitized map of the catchment, tank structure and command area, showing all the essential features of each of the above components.
II. Minor Lift Irrigation Scheme
1. Name of the scheme
2. Location a) Name of the village b) Taluk c) District
3. Name of the stream
4. Sub-basin
5. River basin
6. Storage capacity of intake, in Mcum
7. Utilisation, in Mcum
8. Lift involved, in mtrs
9. Lifting devise details
42
Type of pump* Make H.P. Lift, in mtrs. Discharging Capacity, in
cumecs
(*) Electrical / Deisel
10. Registered ayacut, in hect
11. Cropping pattern, in hect
a) Garden b) Wet c) Semidry d) Total
12. Canals
a) Left Bank Canal i) Length, in kms (ii) Ayacut, in hectares
b) Right Bank Canal i) Length, in kms (ii) Ayacut, in hectares 13. Year of construction
14. Cost, in Rs. lakhs
Note: Scheme profile should be accompanied by a digitized map showing the location of the scheme, command and all the essential features of each of the above components.
III. Other Minor Irrigation Works
1. Name of the scheme
2. Type (Bandhara / Anicut / Pickup / etc.)
a) Length, in mtrs b) Maximum height, in mtrs
3. Location a) Name of the village b) Taluk c) District
4. Name of the stream
5. Sub-basin
43
6. River basin
7. Catchment area, in sq. km.
a) Independent b) Intercepted
8. Average annual yield, in Mcum
, 9. Utilisation, in Mcum
10. Registered ayacut, in hect
11. Cropping pattern, in hect a) Garden b) Wet c) Semidry d) Total
12. Canals
a) Left Bank Canal (i) Length, in kms (ii) Ayacut, in hectares
b) Right Bank Canal (i) Length, in kms (ii) Ayacut, in hectares 13. Year of construction
14. Cost, in Rs. lakhs Name of the work
Note: Each scheme’s profile should be accompanied by a digitized map of the catchment, scheme structure and command area, showing all the essential features of each of the above components.
44
Monitoring and Review of Progress of Catchment Area Treatment 1.85 As has already been mentioned in this Report, a comprehensive plan of
treatment for the entire catchment area by the application of watershed
technology shall have to be formulated by the GPSs under guidance from the
Taluk Watershed Development Team (WDT) and the District Watershed
Development Team with final approval by the ZP. A project profile of the
above referred comprehensive plan indicating, in quantitative terms, the
various treatment inputs for the whole duration of the project will be available.
This project plan will have to be programmed for implementation for each
year and also for each month of every year. This plan will be available on
computer at the taluk and district level. A monthly progress report will have
to be prescribed, in which physical targets for works to be completed each
month should be indicated in the target columns. The monthly progress
report form for each tank’s catchment area, indicating all the targets, should be
printed well in advance in a format which is computer-worthy. The GPSs only
need to fill up the columns apportioned for reporting progress against
respective targets, and send these forms duly filled up within a week after the
close of the month to the Taluk WDT where the progress should be reviewed.
The consolidated progress report should be transmitted to the zilla panchayat
computer where they will be reviewed in detail each quarter. These outputs
should thereafter be sent to the Commissioner, Watershed Department.
Monitoring and review of restoration and maintenance of MI tanks
1.86 A similar exercise of monitoring the repairs and maintenance works carried
out by the GPS for minor irrigation tanks at the taluk and district level is
necessary. Besides this, training programmes not only in carrying out repair
works and economic use of water but also in such matters as conflict
resolution should be given to the members of the GPS.
45
Main Recommendations of the Commission
1. Utilisation of potential under minor irrigation: An indepth study is to be carried out to identify the reasons for the abysmally poor utilization of the potential created and initiation of immediate action to improve the utilisation to acceptable levels. 2. The Commission recommends that all minor irrigation tanks, including those with ayacuts of between 40 and 2000 hectares which are presently in the State sector, should be handed over to gram panchayat subcommittees constituted under Section 61 (A) of the Karnataka Panchayat Raj Act, 1993.
3. Complete administrative reorganization is required to ensure better
supervision of minor irrigation. The department of Minor Irrigation should
be abolished and most of the engineers of the department transferred to the
zilla panchayat divisions and sub-divisions.
4. The gram panchayat subcommittees should be given one time assistance by
the government for the restoration of the tank structure by repair and
restoration of tank bund, sluices, waste weir and main canal. A rough
estimate is that these basic repairs will require approximately Rs. 15, 000 per
hectare. This will require a huge one time investment of approximately Rs.
600 crores.
5. Restoration of tanks should be taken up only after capacity survey,
determination of yield and assessment of costs and benefits.
6. The water rates for minor irrigation should be 25 percent of the rates for
medium and major irrigation.
7. The State government should make a strong case to the Central
government for at least 50 percent financial assistance to complete basic
repairs and restoration of minor irrigation tanks as well as to construct new
tanks in the drought prone areas of the State. The Commission however
46
reiterates that incurring expenditure on restoration of tanks or on new tanks
is a waste of public money if adequate funds are not provided every year for
the maintenance of the tanks.
8. Watershed development is an integral part of the development and
maintenance of minor irrigation.
9. People’s involvement and participation is essential for effective watershed
development.
10. The Commission recommends formation of watershed Gram Panchayat
Subcommittees (GPSs) under Section 61 (A) of the Karnataka Panchayat Raj
Act 1993, with the co-option of representatives of people’s groups such as
area groups and self help groups.
11. The Irrigation Act should be amended to transfer the power of water
users’ societies to the gram panchayat subcommittees / consortium of gram
panchayats in case of minor irrigation tank ayacut areas. Similarly, there
should be amendments of Karnataka Panchayat Raj Act 1993 to provide for
powers to be given to gram panchayat subcommittees / consortium of gram
panchayats to undertake all the activities to be entrusted as per
recommendations given in this report.
12. Close monitoring with the help of computers is essential with regard to the
works to be carried out by the gram panchayat subcommittees in the case of
both minor irrigation tanks and watershed development.
13.While constructing new tanks, thorough field and geo-technical
investigations have to be carried out and plans and estimates drawn up
according due consideration to not merely the irrigation system but also to
the command area development. All this should be completed within a period
of one year. The construction of a project should be completed within a
period of one year to avoid cost and time over run and consequent delay in
realising the intended benefits.
47
48
14. Private minor lift irrigation using surface waters:
a) Regularization of all cases of private lifts where permission has not been
obtained from government for using surface waters, levying a one time
penalty of Rs. 100 per acre and continuous payment of the annual levy at the
rates recommended in sub-para (b) below.
b) Increase the annual levy on private lifts from the present meager rate of
Rs. 4 per acre (or Rs. 10 per hectare) to at least Rs. 10 per acre ( or Rs. 25 per
hectare).
c) Non-payment of the prescribed levy on such users for a successive period of
three or more years should be treated as an offence under the Irrigation Act,
attracting deterrent punishment.
d) Levy on such users should be collected by the Water Resources department
as it deals with the subject of according permission for such private lifts
using surface waters.
CHAPTER II
LABOUR AND EMPLOYMENT
CHAPTER 2
LABOUR AND EMPLOYMENT
2.1 The terms of reference given to the Commission were to study fees under various
labour laws and make recommendations for enhancement of these revenues. The
receipts under the head of accounts Labour and Employment covers three
departments, department of Labour, department of Factories and Boilers and the
department of Employment and Training. In the first two, Labour department and
department of Factories and Boilers, some revenues are received by way of fee
etc. but in respect of department of Employment and Training the receipts are
largely for the training activities as fees for ITI courses run by the department.
However the training component of the department of Employment and Training
has already been discussed and recommendations made under the chapter
pertaining to Education in the First Report of the Revenue Reforms Commission.
The fee receipts of the departments of Labour and Factories and Boilers are not
substantial. However the contribution of these three departments to the State’s
economy is substantial. The maintenance of peace and harmony in the industrial
sector, the creation of an accident free and non polluting atmosphere in industry
and lastly the securing of jobs to the unemployed are not insignificant
contributions to the State Domestic Product which in turn lead to higher potential
for tax collection. In view of this the Report discusses the quality of service
rendered by these departments and recommendations are made for the
improvement of these services. Suggestions are also made with regard to
increasing the revenues by way of fees.
55
EMPLOYMENT
2.2 The details regarding the total population and working population according to
the population Census of 2001 are given below:
Table
Particulars India in crores
As % of total
population
Karnataka In crores
As % of total
population Total population
a) Main workers
b) Marginal workers
c) Total workers
102.52
31.32
8.93
40.25
30.50
8.70
39.3
5.27
1.94
0.42
2.36
36.80
8.00
44.80
2.3 Thus while at the all India level the participation of people in the workforce was
39.3 percent, in Karnataka it was 44. 8 percent. The percentage of main workers
was 36.8 percent in Karnataka while at the all India level it was only 30.6 percent.
2.4 Unemployment rates in Karnataka are also lower than at the all India level as can
be seen from the following:
Table I
Unemployment rates Karnataka and All India
(Current daily status basis)
(Percentage to labour force)
Year 1987-88 1993-94 1999-2000
Karnataka 5.06 4.89 4.61
India 6.09 6.03 7.32
Source: Report of the Taskforce on Employment Opportunities, Planning Commission
Government of India, July-2001
56
2.5 There is however no reason for complacency. If the live register of the
employment exchange is any indication there are 18.5 lakh people seeking jobs.
Besides this, as per the Census of 2001 there are 42 lakh people in Karnataka who
were doing marginal work. Employment in the organized sector has also not
shown any notable improvement.
Employment in organized sector
Year Public Sector Private Sector Total
March 1997 10.84 7.32 18.16
March 1998 10.86 7.57 18.43
March 1999 10.92 7.57 18.49
March 2000 11.14 7.57 18.64
March 2001 11.13 7.67 18.80
March 2002 10.90 7.66 18.56
2.6 It is seen that employment in the organised sector has marginally risen over the
five year period by about 2 percent from 18.16 lakhs in March 1997 to 18.56
lakhs in March 2002. The organised sector represents about 8 percent of the total
workforce of the State.
2.7 There is therefore need to evolve strategies for employment and self employment
in the changed environment.
Strategies and Policies for Employment Generation
1. Agriculture
2.8 The most important consideration in agriculture has been to increase productivity.
Employment was an incidental objective. However, if along with agricultural
production, appropriate linkages are forged with processing, distribution, trade,
financial and commercial activities, we have a very large potential both for
57
creating the demand for workers and for improving the terms and quality of work
particularly with reference to incomes and wages. In fact in Punjab when Pepsi
established its units, not only did the farmers growing tomatoes start securing a
better income, but employment was created in transport, storage, marketing and in
financing these activities.
2.9 Agro processing is a huge global industry today. In order to give impetus to this
sector, the State budget of 2003-04 announced establishment of Food Karnataka
Limited, as a special purpose vehicle which will build partnerships between
farmers and the private sector. As a consequence of this contract farming has
received an impetus. Getting farmers and modern industries together in this
manner will generate jobs and improve incomes. Therefore linking farmers to
big business via Food Karnataka Limited is a very progressive step.
2.10 The Commission recommends that the inter linkage between farmers and agro
food industry and big business on contract basis should be expanded
qualitatively and quantitatively throughout the State, so that the dormant
employment and income generating potential of this sector could be fully
tapped. It is also recommended that all regulations and bottlenecks which come
in the way of such linkage between the farm and industry be removed.
2.11 The Tenth Five Year Plan accords importance to the regeneration of degraded
forest and watershed development which are highly labour intensive activities. In
Karnataka there is a programme for comprehensive development of dry lands on
watershed basis. This takes care of degraded forests, wasteland and dry lands.
The Secretary to Government, Forest department has proposed for the treatment
of reserve forest areas of degraded of 12.80 lakh under the watershed technology.
One of the many benefits which watershed development in any arid area provides
is reduction of the migration of labour, which will be minimized due to creation
of local employment opportunities. The department of Watershed Development
has already covered 29.10 lakh hectares under watershed development. This
58
leaves a balance of 65.88 lakh hectares remaining to be developed, or 78.69 lakh
hectares, if degraded forests are included. The department of Watershed
Development has formulated a profile of “Comprehensive Development of Dry
Land on Watershed basis in Karnataka” for the lands at a cost of Rs.5970 crores.
This can be completed in the next 10 years, in which case the cost per annum will
be Rs.597 crores, of which Rs. 287 crores are received annually under various
schemes of the government of India in the Ministry of Rural Development and the
Ministry of Agriculture and Cooperation. The remaining amount of Rs.310 crores
should be requested from government of India as a special assistance.
Alternatively the State government should budget for this amount.
Sl.no. Item Rs. crores per annum
1. Availability from existing schemes from Government of India (Ministry of Rural Development and Ministry of Agriculture and Cooperation)
120
2. Additionality that can be mobilized by the State from
1. SGRY allocation 2. Jal Rakshana Scheme 3. Allocation from other
departments 4. Sub Total (1+2+3)
82 40 45
167
3. Special assistance that should be demanded from Government of India under: Additional food grains for Jal Rakshana, additional allocation of SGRY and other schemes
310
Total (1+2 (4)+3) 597
2.12 Thus a provision of Rs. 597 crores should be made annually which in ten years
will be equal to Rs. 5970 crores which is the amount required to fully bring
drought proofing to the State through watershed treatment.
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2.13 The Commission strongly recommends that comprehensive development of Karnataka’s dry land treatment by watershed technology needs to be supported fully and suggests that the proposal of full coverage should be considered on top priority. In addition to the manifold benefits of watershed development, it will also generate employment and increase the income of the poorest families.
2.14 The other areas in which there is considerable scope for employment is the full exploitation of the irrigation potential created by major, medium and minor irrigation works.
2.15 The Commission has already recommended separately for the full exploitation of the potential under major, medium and minor irrigation projects and reiterates that these recommendations should be accepted in toto in the interest of employment and higher income and wage which will accrue in greater measure to the people of Karnataka.
Animal Husbandry
2.16 In south Karnataka the Karnataka Milk Federation (KMF) has made considerable impact and has created employment opportunity and increased the income of the poor in rural areas. The KMF should now extend its activities in north Karnataka with the same degree of intensity. Processing units should be established to process the excess milk produced.
2.17 There is considerable untapped potential for sheep rearing in the State. This sector has also the potential to generate considerable increase in employment, if the quality and quantity of wool and mutton produced is increased by cross breeding with exotic rams.
2.18 The Commission recommends that the Animal Husbandry sector which has considerable employment generation potential should be encouraged in greater measure. KMF activities should be extended to north Karnataka with the same intensity as it is done in the south and milk processing units producing export quality products should be established in areas of excess production of milk.
60
Non-farm activities
2.19 Small and medium industries and the service sector generate employment. The
service sector is the fastest growing sector in the economy.
2.20 The main problem faced by low income groups is the difficulty in obtaining
credit for small business activities. A study on micro finance conducted by Price
Waterhouse Coopers, a firm of chartered accountants, reveals among other things
the following:-
a. 63 percent of the total credit availed by the rural poor is used for
consumption purposes.
b. Only 37 percent of credit availed by the rural poor is for productive use.
c. The overall share of organized sector (banks etc.) in credit flow to the
rural poor is around 16 percent.
2.21 This non-availability of credit from the organized sector such as commercial
banks, and developmental banks limits the credit flow to the unorganized sector
and accordingly limits the productivity improvements in this sector.
(Source: Planning Commission (2002) Report of special group on targeting ten million employment opportunities per year)
The above study speaks of the rural poor but the condition of the urban poor is not
different.
2.22 A major problem in all developing countries is that the formal banking system is
ill suited to meeting the credit needs of the informal sector. Another important
mechanism through which banks can meet credit needs of the informal sector is
through the Self Help Groups (SHGs) which provide micro credit for informal
sector activities. The recovery rates of SHGs are very high (over 90 percent)
reflecting the impact of peer pressure on recovery. Impact studies of micro credit
extended by SHGs show very positive outcomes in terms of loans reaching the
poor and in improving their income levels. (Vide Micro Finance for Rural People.
An Impact Evaluation NABARD Mumbai 2000). An important aspect of the
61
programme is that it envisages a process whereby families can begin informal
sector activities through micro credit extended by SHGs, but can in due course,
access larger amount of loans directly from banks. Thus this is an important
mechanism for expanding credit to the informal sector. 2.23 The Commission recommends innovative methods of expanding cottage
industries, artisan units and small service centers in rural and urban areas by
organizing self help groups, who will be financed under various programmes of
government administered by various development corporations as well as by
banks directly. At the same time the Commission recommends that consumption
credit needs of self employed in the weaker sections be met through the working
out of appropriate insurance products for consumption needs like expenses on
health, education, death and marriage. Government should also arrange for
skill development according to changing market trends.
Tourism
2.24 Karnataka has a very rich potential in this sector. What is required is to create the
required infrastructure to make this sector a vibrant part of Karnataka’s economy.
Large and Medium Enterprises
2.25 Karnataka is leading in the sector of information technology. Manufacturing
industries are also prospering in the country in both the domestic and export
markets. What is required in Karnataka is to improve the infrastructure with
regard to power and water. For instance in the Hubli Dharwad region, although
considerable land has been earmarked for industry since a long time the terrible
situation with regard to drinking water in the twin cities has discouraged the
establishment of industries. The development of Karwar port along with the
establishment of the Hubli Karwar railway line will open up the whole of north
Karnataka as well as adjoining areas of Andhra Pradesh to the high seas for export
of products.
62
2.26 In respect of large medium industries the Commission recommends that Karnataka should look beyond IT sector. Now that India is picking up in the manufacturing industry, efforts should be made to establish manufacturing industries in the State. In order that wide spread development takes place the infrastructure needs such as drinking water transport and power need to be taken care of in the already identified growth centers. The development of Karwar port along with the Hubli-Karwar railway line will greatly help in the expansion of industries in northern Karnataka as well as in adjoining areas of Andhra Pradesh.
Co-ordination for generation of employment
2.27 Several regulatory measures and policies of government adversely affect the attraction of investment and hence development and employment. For example McKinsey’s Report of Economic Performance of India has come out with the finding that there are three main barriers to faster growth in India. These are multiplicity of regulations governing product mark etc. (ie. regulations that affect either price or output in a sector), distortion in land markets and widespread government ownership of businesses. The Report has estimated that these factors inhibit GDP growth by around 4 percent. The Report further states that in contrast to popular belief the labour laws and poor transport infrastructure constrain India’s performance by less than 0.5 percent of GDP a year. Removing the main barriers to growth would make India’s economy grow as fast of China at 10 percent a year (vide Appendix for extracts of McKinsey’s Report of Economic Performance of India- McKinsey’ Global Institute in collaboration with McKinsey’s India’s office- August 2001). Thus there is need to evolve institutional mechanisms to remove policies and regulations which adversely affect growth and also to identify job opportunities which are being created and to link these with training in the required skills.
2.28 It is recommended that a high power committee be set up under the chairmanship
of Secretary to government, Labour department and with representatives from CII, FICCI, NASCOM, etc. which will identify measures and areas to improve employment opportunities and enhancement of skills.
63
Appendix
McKinsey’s Report on Economic Performance of India- McKinsey Global
Institute in collaboration with McKinsey’s India office (August 2001)
A decade ago, India and China had roughly the same GDP per capita. But at US $
440, India’ current GDP per capita is now only half that of China. Further India’s
GDP is growing at a mere six percent compared to China’s ten percent. India’s
working age population, however, is expanding ever faster. Unless GDP grows at
closer to ten percent a year, India could face unemployment as high as 16 percent
by 2010.
Our work revealed that there are three main barriers to faster growth. The
multiplicity of regulations governing product mark etc. (ie regulations that affect
either price or output in a sector), distortions in land markets; and wide spread
government ownership of businesses. We estimated that together, these inhibit
GDP growth by around four percent a year. In contrast we found that the factors
more generally believed to retard growth- inflexible. Labour laws and poor
transport infrastructure while important, constrain India’s economic performance
by less than 0.5 percent of GDP a year. Therefore it would be a mistake to focus
growth policies exclusively on these familiar problems. To raise India’s growth
trajectory a broader reform agenda is required.
Removing the main barriers to growth would enable India’s economy to grow as
fast as China’s at 10 percent a year. Annual growth in labour productivity would
double 8 percent. Some 75 million new jobs would be created, sufficient not only
to ward off the crisis in employment, but also to reabsorb any workers that might
be displaced by productivity improvements. Higher productivity means faster
growth with less investment.
64
Many policy makers and commentators believe it would take investment
equivalent to more than 35 percent of GDP, an unattainable amount, to achieve a
10 percent GDP growth rate in India. Our analyses, however, suggest that, at
higher levels of labour and capital productivity, India can achieve this rate of
GDP growth with investment equivalent to only 30 percent of GDP a year for a
decade, less than China invested between 1988 and 1998. Although still a
challenge, this rate is certainly achievable, since removing the barriers that hinder
productivity will unleash extra funds for investment equivalent to the consequent
drop in public deficit and increase the FDI. These sources by themselves would be
sufficient to increase investment from its current level of 24.5 percent of GDP to
30.2 percent.
India will enjoy job-creating growth.
Productivity growth and increased investment will create more than seventy five
million new jobs outside agriculture in the next ten years compared to twenty one
million projected as a result of current policies. But while most of the
productivity, gains and thirty two million new jobs will, indeed appear in the
modern sectors, forty three million new jobs will be created in the transitional
sectors, making the move to town worth while for the low paid and under
employed agricultural workers. Agricultural wages will therefore rise. Although
there will be job losses in government dominated sectors like steel, retail banking
and power these will be more than offset by new jobs in transitional and modern
sectors such as food processing retail trade, construction, apparel and software.
More workers with more disposable income will stimulate more demand for
goods and services. Greater demand will create opportunities for further
investment, in turn creating more jobs.
65
Threat from redtape/ harassment:
Excessive red tape and regulatory harassment increase costs through the time and
other investments needed in negotiating complex procedures, limiting the
incentives of firms to optimize operations. This threat should be liquidated and
ultimately eliminated through processes like e-governance, transparency and
accountability.
Then India will be a very different country in ten years time if these reforms are
undertaken. With a GDP of around US $ 1100 billion, individual Indians will be
more than twice as rich, and probably live in the fastest growing economy in the
world. But of all this is no pipe dream but an achievable goal – if India’s
government and its people act decisively and quickly.
66
Department of Factories and Boilers
2.29 The main function of the department is the enforcement of legislation pertaining
to safety and health and environment in the registered factories and registered
boilers. Efficient functioning of the department will ensure control of industrial
accidents occupation based diseases and minimize property loss. This will help in
achieving higher productivity in addition to prevention of environmental
degradation. All these components are directly related and have an influence on
the national economy.
2.30 The objective of the department could briefly be described as
(i) Maintenance of an environment in factories where workmen’s safety and
health are taken care off
(ii) Particular care is taken of safety systems in hazardous processes, to
eliminate accidents and risk to health of workmen and to the neighbourhood.
(iii) To ensure standard design, manufacture, operation and maintenance of
boilers in accordance with regulations in force.
(iv) To take steps towards social security such as ensuring timely payment of
earned wages and securing of maternity benefits to workers in registered
factories
(v) To collect information including statistics required for policy formulation
and fixing of indices like consumer price index.
(vi) To impart training in safety and creation of awareness of environment that
will take care of workmen’s health.
67
Administration
Head Office
2.31 The Chief Inspector of Factories and Boilers who is also designated as Director of
Factories and Boilers, is the Administrative head of the department. There are
two Joint Chief Inspectors of Factories and one Joint Chief Inspector of Boilers
with a headquarter’s assistant assisting him in the head-quarters. Three Deputy
Chief Inspector of Factories, two Deputy Chief Inspector of Boilers, one medical
inspector of factories, one occupational health specialist, one senior inspector of
boilers (Boiler Testing and Training Cell), one senior Inspector of Factories
(Women and Child Labour) and one Inspector of Factories (Non Technical) are
directly working under the administrative control of the Chief Inspector of
Factories and Boilers.
Regional and Divisional Offices
2.32 The Inspectorate of Factories operates in eight regions and the Inspectorate of
Boilers operates in two administrative regions in the State. Three offices of the
Deputy Chief Inspector of Factories and two offices of the Deputy Chief Inspector
of Boilers are located in Bangalore, while one office of the Deputy Chief
Inspector of Factories each is located at Mysore, Mangalore, Hubli, Belgaum and
Gulbarga. 31 divisional offices in the factory wing and nine divisional offices in
the boiler wing are located across the State with offices at Bangalore, Kolar,
Doddaballapur and Mysore, Mangalore, Udupi, Shimaoga, Hubli, Gadag,
Belgaum, Gokak, Bijapur, Gulbarga, Raichur, Bellary, Davangere and Tumkur.
2.33 The Chief Inspector of Factories and Boilers has delegated some of his powers to
the regional and the divisional officers for effective administrative control and
efficient enforcement of legislations. The two Deputy Chief Inspector of Boilers
are vested with original jurisdiction for administration of the legislations.
68
2.34 Legislations enforced by the department:
The Factories Act, 1948;
1. The Karnataka Factories Rules 1969
The Payment of Wages Act 1936;
1. The Karnataka Payment of Wages Rule 1963
The Maternity Benefit Act, 1961
The Karnataka Maternity Benefit Rules, 1963
The Child Labour (Prohibition and Regulation) Act 1986;
The Environment (Protection) Act, 1986 and rules made there under
The Control of Industrial Major Accidents Hazards Rules 1994.
The Chemical Accident (Emergency Planning Preparedness and Response) Rules
1996;
The Indian Boilers Act, 1923;
1. The Karnataka Boiler Rules 1982
2. The Karnataka Economizer Rules 1959
3. The Karnataka Boilers Attendants Rules, 1962
4. The Karnataka Boiler Operation Engineers Rules, 1959
Major functions of the Inspectorate of Factories
2.35 These are as follows :
1. To register the factories coming under the purview of the Act and approve
their locations, building, place and layout, keeping in view the requirement of
lighting, space, ventilation, and activities around factories and the habitation.
2. To spread knowledge by extension activities such as knowledge of relevant
laws, guiding principles in safety policy, on site emergency plans, and
assessment of measures established for monitoring work environment.
69
3. To oversee the safety, health and welfare of workers employed in registered
factories and ensure timely payment of earned wages by the management to
the workers.
4. To recognize competent persons to carry out tests and examinations wherever
required.
5. To prescribe the methods to be adopted for compulsory disclosure of
information about hazardous processes.
6. To assist the district administration in preparation and implementation of
onsite emergency plans and also disaster management control plans.
7. To investigate accidents and enquire into complaints from trade unions.
8. To bring under the purview of the Act the unregistered factories.
Major Functions of the Inspectorate of Boilers
1. To register all the boilers / economizers steam lines coming under the purview
of the Act.
2. To approve the design and drawing of boilers/ economizers/ steam lines/
mountings and fittings as per approved drawings.
3. To periodically inspect and issue certificate of fitness to run such boilers/
economizers/ streamlines/ annually or bi annually.
4. To suggest repairs/ alteration for such boilers/ economizers/ steam lines
which are not fit for safe working/ operations, and also to supervise such
70
repairs being undertaken by the owner of the boiler/ economizer/ steam line
through authorized repairers after getting approval from the department.
5. To conduct welder’s examination as per Indian Boilers Act 1950 and issue
certificate.
6. To enforce Boiler Operation Engineers Rules and Boiler Attendant Rules and
to conduct Boiler Operation Engineers and Attendants examinations and also
to impart training to boiler attendants and operation engineer to run boilers
safely and efficiently.
7. To conduct stage inspection during the manufacture of boilers / economizers /
steam lines / mountings / fittings.
Coverage
2.36 The factories, which come under the purview of the Act, are those, which employ
a) 10 workers with power
b) 20 workers without power and
c) those which are notified by the government under the Act irrespective of
Horsepower or strength of workers
2.37 In Karnataka there are approximately 9500 registered factories and 2500
registered boilers in which about 10 lakh workmen are directly employed. This
large community is required to be protected from industrial accidents and
occupational diseases. The department of Factories and Boilers is responsible for
the enforcement of various legislations so as to ensure the achievement of the
objectives of the department.
71
Supporting activities
2.38 In order to carryout the functions effectively, certain supporting activities are also
institutionalized. These are
A. Karnataka State Safety Institute
2.39 The objective of the Institute is to conduct training programmes in different
modules catering to the needs of employees at the shop floor level as well as at
the supervisory levels.
2.40 In 2001-02 the target of the programmes to be conducted was 64 as against which
only 30 programmes could be conducted. Training was imparted to 1500
employees at the rate of about 50 workers per programme. This number is very
small when we consider that there are 10 lakh workmen to be trained. The
institute will be able to conduct more programmes if they can prepare modules of
their programmes with the help of their departmental officers and in consultation
with experts in the concerned field. The conduct of the programmes can be
entrusted to engineering colleges, on the basis of the modules evolved by the
department. This will generate some revenue to both the department and the
college since the factories should pay for the training imparted. This will also be
a test of the value of the training since the factories will be willing to pay only if
the training is practical and useful.
2.41 The Commission recommends that the State's Safety Institute may confine its
work to formulating course material with the help of departmental officers,
experts and industry managers for different modules and arranging
programmes utilizing engineering colleges in the districts. The Commission
also recommends that the course material prepared for different modules
should be made utilitarian to the industry so that the managements will be
interested in sending their employees for training by paying the course fee,
which should be adequate to meet the cost of conducting programmes as well as
preparing the course material.
72
B. Activities of Pressure Vessels and Plant Safety Monitoring Cell
2.42 This cell is created to oversee the safe working of pressure vessels, lifting tackles,
hoists and related equipment and machinery used in registered factories. The
department makes its schedule of visits and targets regarding inspections are
given to regional and field officers.
2.43 The cell recognizes competent persons to test pressure vessels, lifts, hoists,
presses etc., by issuing competency certificates. During the year 2002-03 the cell
has issued sixty two competency certificates to forty two individuals and twenty
organizations. A special workshop has also been conducted for these persons to
create awareness and to advise them on the subject. These competent persons
carry out examinations and tests wherever required.
C. Central Safety Monitoring Cell
2.44 This cell was established on the backdrop of the Bhopal tragedy to monitor the
safety aspects in hazardous and highly hazardous industries. The objective is to
prevent major accidents and disasters that are likely to occur in an industry.
2.45 The Central Safety Monitoring Cell needs to continuously update its knowledge
with regard to modern manufacturing processes. The Commission
recommends the conducting of workshops jointly by the department and the
Indian Institute of Science or other expert body each year on various modules
of knowledge needed to run this cell efficiently. The cell should also be enabled
to access the latest information available in the field by providing it access to
relevant scientific journals.
D. Activities of Boiler Testing, Training and Examination Cell
2.46 The rate of manufacturing boilers, economizers, mounting, fittings and other
pressure parts has considerably increased. To ensure safe design, to conduct
73
training and examination to suitable persons who are engaged in boiler
manufacturing operation and to conduct examinations for welders who are
required in the manufacture of boilers, a separate boiler testing training and
examination cell has been constituted. This cell is giving training to boiler
attendants, welders and boiler operation engineers.
2.47 The cell also advises manufacturers in adopting international standards in design,
material and manufacturing technology.
2.48 The Commission considers that all this fund of knowledge on boilers as well as on
safety technology could be made a specialized optional subject in BE Mechanical
course in the Technical University. Such BE Mechanical students after
completion of their course could be placed by the department of Factories and
Boilers as apprentices with factories for a year. They can thereafter be given
competency certificates, which will help them to get employment.
2.49 The Commission recommends an optional on boiler manufacture and
management as well as factory safety technology as a paper in BE Mechanical
course.
E. Industrial Hygiene Laboratory- Health Survey of Workers Working in Hazardous Industries
2.50 There is an Industrial Hygiene Laboratory in the department. This laboratory is
having sophisticated instruments which are very useful in health survey of
workers working in hazardous units. The medical inspector of factories who
undertakes these surveys and checks has visited many factories and reviewed
whether the health checkups of workers engaged in hazardous manufacturing
processes have been conducted according to the law and whether records have
been maintained. During the period 2003- 2004 a massive special health camp
has been conducted to observe the National Safety Day on 4th March 2003. 600
workers have been benefited by this camp. The laboratory proposes to maintain a
database regarding health of workers in hazardous process units.
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Inspection process
2.51 As already mentioned the State has 9500 factories and 2500 boilers registered
with the department. The industry employs around ten lakh workmen. The present
strength of the departmental officers excluding the director is sixty six amongst
whom fifty two are field officers. Twenty two posts are kept vacant due to
various government policies. The present strength does not enable the department
to adhere to the norm of inspecting one hundred and fifty units per officer per
year as suggested by First Labour Commission and the Central Boilers Board
respectively. In view of excessive workload the department is able to cover only
40 percent of the units. The units are selected for inspection at random. Self-
certification / certification by recognized competent persons is also accepted.
Hazardous factories, which are 800 in number, and major hazardous accident
units, which number 70, are inspected twice a year.
Contents of Inspection Reports
2.52 The inspecting officers are enjoined upon to inspect and send an inspection report
to factories for rectification of defects noticed. There is no prescribed inspection
proforma.
2.53 The Commission recommends that inspection report proforma should be
prepared in which information to be secured on all the key components of a
factory are indicated. The compliance of observations made by the inspecting
officer should be watched for implementation.
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Mobility of Inspecting Officers
2.54 It was represented that in the department the entry level officer is a Class ‘B’
gazetted officer with a technical degree as qualification; the next higher grade is
Class ‘A’. These officers undertake inspections of factories, some of which are
highly capital-intensive units. In the absence of departmental conveyance these
officers, when they go for inspection, have to depend upon public conveyance.
The department has requested the government on several occasions to provide
vehicles to at least the senior class ‘A’ grade officers. The Commission has
considered this plea and recognizes the need.
2.55 The Commission recommends that all Class I officers of the department should
be permitted to purchase vehicles on bank loan, for which some interest subsidy
may be given by government as also reimbursement of petrol expenses at a
reasonable level.
Inspection Kit
2.56 The inspecting officers of the department are undertaking inspections without
using essential tools and equipments, since these are not available with them.
However qualified and experienced an engineer might be, undertaking inspections
of machinery without the necessary tools and equipment will not be productive.
In view of this therefore the Chief Inspector of Factories and Boilers was
requested to prepare a list of tools and equipments required by inspecting officers
at various levels. The same is indicated below.
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Kit required by inspecting officers
Sl.no. Name of equipment/ instrument
Applicability Advantage
1. Sound level meter To measure the noise level in industry and work environment monitoring
Provides prevailing noise levels at any workplace, as the instrument will be portable. Provides instantaneous understanding and helps in taking corrective measures
2. Lux meter To measure the light intensity in the work environment
Provides availability of light at work place and helps in taking corrective measures.
3. Humidity and temperature meter
To measure the humidity and temperature at workplace
Provides understanding and helps in taking corrective measures
4. Earth ground resistance tester kit
To measure the current resistance and amperage in the workplace
Helps in protecting the workers being exposed to electrical hazards. And this understanding helps taking of corrective measures
5. Ph test strips To measure the ph value of water
Helps in identifying the acidity and alkalinity of water/ liquid. Helps in suggesting corrective measures to overcome scaling and corrosion problem.
6. Portable combustion gas analyzer
To measure the contents of the flue gases of a boiler and furnace
Helps in detecting the contents of the flue gas and thereby in detecting whether the proper combustion is taking place in the boiler/ furnace.
7. Programmable thickness guage
To measure the thickness of a shell of any boiler, pressure vessel, storage vessel and any other equipment in which the thickness of the metal is a critical component.
Helps in identifying the thickness of vessels at the time of manufacturing before commissioning and after usage. Helps in taking corrective measures
77
8. Flaw detectors To identify the flaw in the metal used in any pressure vessels, storage vessels and reaction vessels which are highly critical when they are in process.
Identifies the flaws, provides instantaneous understanding and helps taking corrective measures. Helps in prevention of accidents.
9. Screw guage ISI Standard
To measure the thickness of any small critical components used in various processes.
Identifies the ware and tear of any component. Helps in visual and direct physical examination of the component to measure the inner diameter and outer diameter including the thickness.
10. Digital Camera make (Sony)
To photograph any workplace, work environment, equipment, method of work etc.
Helps in obtaining the photographs of the workplace, scene of accident in an industry, prevailing work conditions etc.
11. Handy video camera – make Sony
To videograph any process which is critical in nature, workplace, work environment, the place of accident and the surrounding of an industry
Helps in understanding the workplace, the process and work environment (fumy, dusty etc.) It also helps to review of critical analysis of the problems and take corrective measures
12. A Hammer- ISI standard
In industries to test for soundness of a material particularly used for a boiler, economizer and related equipment
Helps in physical identification of the soundness of the material vis- a vis corrosion metal erosion etc. and taking of corrective measures
13. Torch- ISI Standard
To conduct visual inspections in confined spaces
Helps in conducting better visual inspections of confined spaces with poor lighting.
14. Safety goggles –ISI standard
To conduct inspections in hazardous workplaces
Helps in protecting officers against any harmful substances likely to cause injury to the eyes.
15. Hand gloves- ISI standard
To conduct inspections in hazardous workplaces
Helps in protecting officers against any harmful substances likely to cause injury to the hands.
16. Ear plugs- ISI standard
To conduct inspections in high noise places
Helps in protecting an officer in harmful effects of noise whenever he visits noise level zones for inspection.
78
17. Respirators- ISI standard
To conduct inspections in hazardous workplaces
Helps in protecting an officer against any harmful substances likely to cause bodily injuries.
18. Vernier Callipers –ISI standard
To measure the critical dimensions of a components of various equipments and instruments.
Identifies the ware and tear of any component. Helps in visual and direct physical examination of components, to measures the inner diameter and outer diameter including the thickness.
19. Helmet-ISI standard
To wear it during the course of inspection
To protect against any falling objects likely to cause head injury.
20. Apron-ISI To wear it during the course of inspection of hazardous areas where in acid, alkaline and other harmful substances are likely to be present, entry to any confined space including a boiler.
Prevents any bodily injury likely to be caused to the inspecting officer under hazardous area of inspection. Prevent cloth soiling.
Sl.no. Level of office Particulars of items with serial
numbers from the above tabulated list plus extra items
No. of sets
required
Total cost
Rs. lakhs 1. Head office Sl.nos. 1,2,4,6,7,8,10,11, plus
gas detectors and dead weight pressure gauge tester plus ultrasonic thickness gauge
1 8.59
2. Regional offices (Factory wing)
Items against all serial nos. except serial nos. 6, 7 and 8 plus gas detector plus ultrasonic thickness gauge
8 16.34
3. Regional offices (Boiler wing)
Items against serial nos. 5, 9, 10, 11, 13, 18, 19 plus ball peen hammer plus ultrasonic thickness gauge
2 2.40
4. Divisional level (Factories)
Items against serial nos. 1 to 5, 9, 10, 12 to 20 plus gas detector plus ultrasonic thickness gauge
31 46.27
5. Divisional level (Boilers)
Items against serial nos. 5, 9, 10, 13, 18, 19, plus ball peen hammer plus ultrasonic thickness gauge
11 6.62
Total cost 80.22
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The inspection kits required to give credibility to the inspectors of the department
and make the inspections effective cost only Rs.80.22 lakhs.
2.57 The Commission takes serious note of the fact that such essential items of
inspection kit have not been provided to the inspecting officers, thereby forcing
them to carry out inspections without tools. This effects the credibility of the
inspections. The Commission recommends that the department should
purchase all the inspection tools and equipment required by inspecting officers
at all levels as indicated in this report very expeditiously.
Establishment of work environment monitoring center and testing laboratory
2.58 The department has proposed that this laboratory should be established since it
will help the departmental officers to gain technical knowledge inputs as well as
provide basic infrastructural facilities needed for the effective implementation of
law. In the absence of such a laboratory the measurements, testing and
examination of any equipment are being totally done by a third party, mostly
private entrepreneurs. The department is therefore constrained to take cognizance
of these documents given by private parties and issue necessary guidance and
orders without having any facilities for reference in the department. It is also
reported that sometimes the quality and reliability of the documents issued by the
private parties may fail to stand the test of law. This laboratory has also been
proposed as “ Industrial occupational safety, health and environment centre’ in
the Tenth Five Year Plan at a cost of Rs. 135 lakhs. The present proposal has
stated that the cost would be Rs. 200 lakhs.
2.59 Since it is a Tenth Five Year Plan scheme of the department the Commission
recommends that government may examine the merits of the proposal for
establishment of a work environment center and testing laboratory.
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1. Inadequate knowledge input
2.60 The officers in both factory and boiler wings are required to deliver specialized
knowledge to improve the safety skills of the factories and boilers they inspect.
2.61 Therefore the Commission recommends that the inspection officers be assisted
to continually upgrade their skills through workshops, training programmes
and library facilities.
E-governance
2.62 The department considers that the adoption of e-governance will enable it to be
more effective, efficient and responsive. At the same time the department
considers that e-governance would save time and cost in the discharge of its
duties. The cost of computerization proposed is as under:
Table
Computer requirements
Sl. No. Details of office No required No. in position Shortfall (No.)
1. Head office 15 5 10
2. Regional level offices 10 5 5
3. Divisional level offices 42 6 36
Total 67 16 51
Note: all these computers should be networked
2.63 The cost of computerization as estimated by the Director of Factories and Boilers
is as given below:
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Table
Cost of Computerisation
Sl. no. Items Cost Rs. lakhs
1. Cost of 51 computers with accessories
30.00
2. Software development 25.00
3. Area networking 10.00
4. Recurring / maintenance 1.00
Total cost 66.00
2.64 The provision of computers will help the department to create a useful database,
standardized procedures and monitor inspections and the remedial action taken
after the inspection.
Database for the industrial hygiene laboratory
2.65 The above mentioned laboratory proposes to have a database of health workers
working in hazardous process units. This can easily be developed by prescribing
forms in which the health checkup reports of each worker will be contained. The
periodicity of receipt of these forms from each such hazardous unit, should be the
same as the prescribed periodicity for the health checkups of the workers. Each
time the checkup is carried out a copy of this form indicating for each worker the
health status for all the parameters prescribed in the form should be sent to the
divisional office concerned where it should be scanned into the computer. This
will enable the department to ensure that the units take adequate action to improve
the health of the labour force.
2.66 The Commission recommends the acceptance of the proposal of e-governance
as suggested by the department with the condition that suitable systems should
be evolved which will enable the department to function effectively.
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Revenue matters
2.67 The tariff of fee payable for licence and annual renewal of the same by factory
and boiler units was fixed in 1993 and was revised by 100 percent in the year
1999 (ie after a period of six years). It is therefore four years after the last
revision. It is recommended that the tariff across the board may be increased by
50 percent. The additional revenue should be utilized to provide inspection kits to
the inspecting officers. This increment in tariff is considered essential since all the
inspecting officers will have to be provided with inspection kits required for
carrying out inspections properly, help in the mobility of the inspecting officers,
and provide funds for the purchase of computers.
2.68 According to budget document the receipts budgeted for the year 2003-04 from
the factories and boilers along with other details are given here under:
Statement I
Increase noticed by upward revision of tariff
Rs. lakhs
Revenue head of account Budget estimate 2003-04
Anticipated now by the department
Addition by revision of
tariff by 50%
Annual receipt after revision of
tariff 0230-00-103-0-00
-fee for inspection of steam boilers
100 64 32 96
0230-00-104-0-00
-fee realized under Factories Act
300 305 152.50 457.50
Total 400 369 184.50 553.50
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2.69 Besides this, by levying fees on some new sources such as site emergency plan
approval of hazardous and other than major hazardous units, endorsement of
material certificates of pressure parts, calibration of testing machines, giving of
technical knowledge in the design of boilers, economizers, feed water heaters,
steam accumulators, de-aerators, flexibility analysis of steamlines etc, an
additional Rs. 7.85 lakhs is expected to accrue. Thus in all Rs. 184 + 7.85 =
191.85 lakhs will be the additional accrual of funds.
2.70 Such an annual increase will in one year recover the cost of investment on the
purchase of inspection kits of Rs. 80.22 lakhs and investment on e-governance of
Rs. 66 lakhs. Even the marginal cost of increasing the mobility of inspecting
officers by providing some interest subsidy for purchase of cars for undertaking
inspections in self driven cars will easily be recovered in the first year itself.
2.71 The Commission recommends that the inspection fee across the board be raised
by 50 percent for all items for which fee is charged.
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Labour
2.72 The main objective of the Labour Department is to promote harmonious
relationship between employees and employers in industry, trade, plantations etc,
keeping in view the legitimate interest of workers. The prevention of strikes,
lockouts, work stoppages and the settlement of industrial disputes through
effective intervention and conciliation are important functions of the department.
Extending the benefits of various labour enactments to the workers, fixing the
minimum wages for various occupations under advice from the Minimum Wages
Advisory Board and committees, and ensuring their implementation are also
important functions. In order to achieve these objectives several Central and
State laws and the International Labour Orginisation’s recommendations and
conventions notified by the Government of India are implemented. This also leads
to bringing about improvement in socio-economic conditions of workers.
2.73 Unfortunately, the practice of child labour still persists in our economy, which in
the context of the rights of the child, including the child’s right to education,
needs immediate remedial legal and administrative measures.
2.74 India has the largest number of persons working in the informal sector, which
provides livelihood to about 90 percent of the population. Though the contribution
of this sector to the economy is enormous, a large proportion of the workforce in
rural and urban informal sectors is illiterate, vulnerable, isolated and poor. In
addition, accessibility of the informal sector to welfare benefits such as health
care, old age pension, maternity benefits and insurance has been poor or non
existent. Hence the task to design social security tools to meet the challenge of the
present predicament of unorganized labour is a major problem.
2.75 The only way the poor and unorganized can benefit from increases in the State’s
wealth is by greater participation of these sections in the activities which lead to
growth. The impact of increased wage and income to the unorganized sector is
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perceptible in growth centers like the metropolis of Bangalore, or areas
surrounding industrial projects.
2.76 A pragmatic solution to the social security problems of the unorganized sector
would be to assist them in taking insurance policies for health, education,
unemployment, etc. The premium could be paid through the post offices which
are in any case now seeking additional sources of revenue.
2.77 The Commission therefore recommends that the Labour department should
negotiate with insurance companies and the postal department for taking up
multi benefit insurance policies for the unorganized sector which will provide
along with life insurance some essential benefits such as health care, accident
relief, education fund, housing loan and temporary unemployment dole for
which the premium could be paid at the nearest post office. The premium could
be as low as Rs. 50 per month (with options to subscribe higher premium,) in
order that a wide segment of the unorganized sector both from rural and urban
areas is covered.
Revenues
2.78 The Labour department administers laws, which aim at the welfare of the
workers. This is not essentially a revenue earning department, but in the process
of implementation of the laws some revenues from fees accrue to the department.
These revenues vary from year to year because the Karnataka Shops and
Commercial Establishment Act 1961 empowers the department to collect the fees
once in five years. Therefore different establishments will have different years in
which they have to make payment of their fees. In the years 2001-02 the revenue
from fees was Rs. 59.53 lakhs, in the year 1998-99 it was Rs. 178.34 lakhs while
in other years from 1996-97 to 2001-02 it has fluctuated between these two
figures. The Department of Labour has informed the Commission that revenue
accrual from the department could be taken to be approximately Rs. 1 crore on an
average per annum.
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2.79 At present the fee is charged to the establishment on the basis of slabs (ranges) of
employees strength within which the establishment of the employer falls i.e., the
employers are classified as having up to five workers, between six to twenty five
workers, etc. This gives a scope to the employer to suppress the strength of
employees in the information given to the department. For example, the Motor
Transport Workers Act 1961 the establishment which employs five persons is
charged Rs. 100 per annum. But if the employees strength is six to twenty five the
fees is Rs. 200 per annum. Therefore the department has recommended that the
employee slab system for levying fees under various Acts should be replaced by a
formula in which a certain minimum fee is collected along with certain amount
multiplied by the number of employees in the establishment. The department’s
proposals to increase revenues in respect of certain important revenue yielding
Acts are given Actwise hereunder:
1. Motor Transport Act 1961
2.80 The fee is prescribed under this Act on the basis of the number of workers
employed according to the slabs range of workers in which it falls. There are ten
slabs of worker’s strength starting from up to 5 workers with Rs. 100 as fee for
the establishment and ending with employees’ strength of 1500 and above for
which Rs. 5500 is charged annually. The department recommends that instead of
having ten slab systems, a formulae may be adopted. The formula suggested is
Rs. 200 + 20n where ‘n’ is the number of workers. In order to avoid evasion there
is a further suggestion that there should be lesser fees at higher ranges.
2. The Trade Unions Act 1926
2.81 The fee which is Rs. 10/- is paid only once at the time of registration. This has
encouraged the registration of many non-serious rival trade unions. The
department is of the opinion that there is need to have a slab based on the total
number of workers in the establishment and the nature of the industry. The slab is
given hereunder
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Unorganised Sector Rs. 500
Organised sector up to 500 workers (Rs. 1000 + 5n) *
Organised sector 500 and above (Rs. 1000 + 10n) *
* Where ‘n’ is the number of workers in the establishment
3. The Plantation Labour Act 1951
2.82 There are eight slabs with regard to the number of employees. The first slab is up
to 4 employees for which the present fee is nil. In the slab of 5 to 10 employees
the fee is Rs. 150 and in the last slab of 151 and above employees the fee is Rs.
3000. The department has recommended that a formula : Rs. 150 + 20 n may be
fixed.
4. Karnataka Shops and Commercial Establishment Act 1961
2.83 There are six slabs of with regard to the number of employees in which the
establishments are to be classified as per the present dispensation. The
recommendation is that for Bangalore city the formula should be Rs. 250 + 250 n
and for other cities 150 + 200 n, where ‘n’ is the number of employees. It needs
to be noted that the Act is not applicable to rural areas.
5. The Contract Labour (Regulation and Abolition) Act 1970
2.84 There are six slabs prescribing different fee for each slab. The recommendation
of the department is that a simple formula viz 200 + 20 n may be applied where
‘n’ is the number of employees.
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6. Inter State Migrant Workmen (Regulation of Employment and Condition of Service) Act 1979
2.85 As there is hardly any registration in Karnataka the rate system need not change.
7. The Beedi and Cigar (Conditions of Employment) Act 1996
2.86 There are seven slabs prescribing different rates ranging from Rs. 30 to Rs. 3000.
The rationalized formula suggested is 50 + 20 n for units using power and
machinery and 30 + 10 n for units not using power and machinery where ‘n’ is the
number of workers.
2.87 The department was requested to give the impact of the application of such a
formula in comparison with the present receipts. The department has provided
information in respect of two Acts, which are tabulated below:
Items Motor Transport Workers Act 1961
The Karnataka Shops and Commercial Establishment
Act 1961 Declared number of workers
0.30 lakhs 4.36 lakhs
Expected number of workers
1.50 lakhs 7.00 lakhs
Revenue realized Rs. 1.36 lakhs Rs. 495.24 lakhs * Additional revenue expected as per declared number of workers if formula applied.
Rs. 30.00 lakhs Rs. 1090 lakhs *
Expected as per estimated number of employees if formula is applied
Rs. 150 lakhs Rs. 1750 lakhs *
Additionality over and above present revenue (Basis of declared number of workers)
Rs. 28.64 lakhs Rs. 594.76 lakhs *
Additionality over and above present revenue (Basis of estimated number of workers)
Rs. 148.64 lakhs Rs. 1254.76 lakhs *
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90
* This is for a block period of five years 1997-2002 since this fee is collected
once in five years from each payee. But the strength of workers is for the year
2002, whereas in respect of Motor Transport Workers Act it is for the year 2002.
Note: The department has worked out the above table as an illustrative model of
the additional revenue that can accrue if the present system is replaced by the
formula model.
2.88 The Commission recommends that instead of having a slab system for
assessment of fee payable by each establishment, the system proposed by the
department in which assessment is made on the basis of a formula be accepted.
The additional revenue generated should be given to the department of Women
and Child Development to run residential ‘bridge’ courses for child labourers
so as to enable them to join normal schools thereafter.
CHAPTER III
CROP HUSBANDRY
CHAPTER 3
CROP HUSBANDRY
I. Agriculture Farms
Introduction
3.1 Agriculture continues to be the single largest occupation in the country despite the
fact that each succeeding census shows an increase in urbanization. Agriculture
gives livelihood support to about two thirds of the country's population and
contributes 24.2 percent to the gross domestic product. Besides providing the
most basic of all requirements, food grains, it accounts for nearly 15 percent of
the total export earnings and provides raw material for many diverse industries.
Improvement in this sector continues to be the most important contributory factor
to economic growth and prosperity. In Karnataka, according to the 2001 census,
131 lakhs of men and women, or 55 percent of the work force are engaged in
agriculture.
3.2 One of the country’s greatest successes since Independence has been the
achievement of food security through increased agricultural production. A number
of measures, such as expansion of net sown area, heavy investment in irrigation,
development of rural infrastructure, land reforms and minimum support prices
have contributed to the increase in agricultural production. However the single
most important factor which ushered in the Green Revolution has undoubtedly
been the use of high yielding hybrid seeds, along with agricultural inputs such as
fertilizers and pesticides and improved crop production technologies. In
Karnataka also, agricultural production has increased, reaching an all time high in
2000-01 with the production of 109.60 lakh tones of food grains.
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3.3 However, it is a matter of concern that during the 1990s the growth of agriculture
decelerated as compared to the 1980s.The overall growth rate of crop production
declined from 3.72 percent per annum to 2.29 percent per annum and productivity
from 2.99 percent per annum to 1.21 percent. The deceleration in the growth rate
of production of food grains was particularly steep.
3.4 In Karnataka also there was a steep decrease in agricultural production during the
year 2002-03 when there was drought, emphasizing once again the dependence of
Indian agriculture on the vagaries of the monsoon.
3.5 Besides this, the per unit area productivity of our crop commodities is much lower
than those of other major crop producing countries. For instance the yield of
paddy, in kilograms per hectare, in India is 2929 and wheat is 2583 whereas it is
6321 and 3969 respectively in China. With continued neglect of natural resources
like land and water, non maintenance of assets built at great public cost such as
tank and lift irrigation schemes and unsustainable practices like excessive use of
water together with unbalanced use of fertilizers, it is possible that the growth rate
of agricultural production will decrease still further if correctional steps are not
taken soon.
3.6 One important factor in the increase of agricultural production is the use of good
seeds. Except in the case of hybrid crops, most farmers still follow the time
honoured practice of keeping aside goods seeds at the time of each harvest to use
during the next sowing season. However, the productivity can be increased by
about 20 percent by use of certified or quality seeds which are generated from
scientifically produced breeder seeds and raised under controlled conditions. In
the case of hybrid crops the seeds sown are invariably certified seeds. In the case
of other crops the usage is much less.
3.7 In the 1950s and 1960s, as part of the efforts of government to increase
agricultural production, a large number of government agricultural seed farms
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were established where government officials were directly involved in the process
of producing foundation seeds. The foundation seeds were raised from breeder
seeds which were produced by scientists of the Agriculture Universities and
government research stations. The foundation seeds raised on the government
farms were then given to government organizations such as seeds corporations to
raise certified seeds which these corporations and agencies then sold to the
farmers. In the absence of private seed companies it was necessary, at that time,
for government to initiate such measures and to engage directly in the production
of certified or quality seeds.
3.8 In Karnataka there are forty nine seed farms established by the government, of
which thirty six are in the State sector under the control of the department of
Agriculture and thirteen are with the zilla panchayats. In addition to these seed
farms there are fourteen agricultural school farms, two agricultural farms in
Kudige and Bagalkot, three farms which are designated as Rural Development
Training Centre Farms, four Agricultural Development Centres and one Indo
Japanese Agricultural Training and Education Centre in Mandya. However after
the rationalization of training centers, only one center in each district is now
functioning as a District Agricultural Training Centre. The forty nine seed farms
however are still being utilized for the purpose of raising foundation seeds from
breeder seeds, which are supplied by the two Universities of Agriculture Sciences
in Bangalore and Dharwad.
Terms of reference
3.9 The terms of reference given to the Commission are with regard to increasing
the revenues from agricultural and horticultural farms.
3.10 As per Government of India seed replacement norms, Karnataka requires annually
approximately 7 lakh quintals of certified / quality seeds of various agricultural
crops. These certified seeds are to be raised from foundation seeds of which the
quantity required is approximately 16,000 quintals (excluding groundnut seeds).
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The foundation seeds raised in the government seed farms are given to the
Karnataka State Seeds Corporation, the National Seeds Corporation, the
Karnataka Oil Federation and a number of private seed companies for the
production of certified seeds. The seed companies indent for breeder seeds
through the Seeds Association and the State department of Agriculture to the
Government of India eighteen months in advance of requirement. The breeder
seeds are supplied by the University of Agricultural Sciences and other
government institutions. There is sometimes a deficit of 30 – 40 percent in the
supply of breeder seeds. The Agriculture department uses the breeder seeds
supplied by the University of Agriculture Sciences in the Government seed farms
to raise foundation seeds which are then given to the Karnataka State Seeds
Corporation, the National Seeds Corporation, the Karnataka Oil Federation, and
private seed companies for raising certified seeds. These agencies are also
responsible for the marketing of the certified seeds.
3.11 The government has established the Karnataka Seed Certification Agency which
certifies the seeds produced by government and private agencies. However,
certification is not mandatory. Certified seeds are slightly more expensive than
non-certified seeds.
3.12 Almost all the government agricultural farms in Karnataka were established in the
first two decades after Independence. This was a time when the development of
agriculture was entirely in the hands of the government and it was necessary for
the department of Agriculture to establish their own farms in order to ensure that
seeds of good quality were available to farmers. The total area of the seed farms
in Karnataka is 952.67 hectares, of which only 170 hectares are irrigated. Most of
the seed production is limited to the irrigated area. Approximately 132 hectares
are occupied by roads and buildings. Other government farms which are used
primarily for training occupy approximately 275 hectares.
The details of the government seed farms and other farms are given in Annexure 1
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3.13 With the passage of time the role of the government in agricultural production has
altered considerably. Not only have farmers become more knowledgeable and
enterprising but their requirements are being met to a much greater extent by
private agencies then by the government department. Thus while only 25 percent
of the seeds utilized for various crops every year are certified seeds, only 25
percent of these seeds are supplied by the Agriculture department through the
government seed farms. 75 percent of the certified seeds are therefore supplied by
private seed companies. There are more then 150 registered seed companies in the
State and an equal number of unregistered companies. Most of them raise the
certified seeds by entering into contract with farmers to raise the seeds.
3.14 The share of the government in supplying certified seeds is not only small, but it
is dwindling. The details of the quantity of certified seeds produced from
departmental farms in the years from 1998 –99 to 2002-03 can be seen in
Annexure 2. As against 9449 quintals of certified seeds produced by the
departmental farms in 1998-99, the quantity produced in 2002-2003 was only
4080 quintals.
3.15 The fact is that it is no longer necessary for the government to be involved in the
production of certified seeds when there are sufficient number of private agencies
doing this task. On the other hand, continuation of these farms even at a minimal
level of operation would mean continuously increasing expenditure, since the
salaries of the government staff working on the farms can only increase. The
degradation of the land as well as decrease in the water table demand increased
expenditure if at least some of the area is to remain under cultivation. At the same
time the farms are becoming increasingly inefficient with vacancies of the staff
remaining unfilled and the increasing reluctance on the part of the government to
incur expenditure on the farms.
3.16 The farms were set up with the sole objective of producing foundation and
certified seeds and there was never any intention that they should be self
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sustaining .The activities in the farms depended entirely on the availability of
grants from the government. The programmes were not based on any perspective
or long term plans. When there were less grants than required, the maintenance of
infrastructure like the building, was given up and they deteriorated. Once
neglected, it required more money to repair and maintain them. Besides, as the
climate became drier, borewells and streams yielded less water. There are several
instances of farms which had copious water at the time of establishment now
facing acute water problems. Large tracts of farm land have remained
uncultivated.
3.17 The statement at Annexure 3 shows the expenditure incurred on the farms and
the income derived from them for the three years 1999-2000 to 2001-2002. It
may be seen that all the farms are incurring heavy losses. Not only is the income
less than 25 percent of the expenditure, but the income is steadily declining
whereas the expenditure is increasing even with no increase in the scale of
development activities.
3.18 During 2001-02 the state sector farms have incurred an expenditure of
Rs.155.42 lakhs as against their income of Rs. 46.78 lakhs and the district sector
(ZP) farms have incurred an expenditure of Rs. 50.64 lakhs as against their
income of Rs. 11.51 lakhs.
3.19 The members of the Commission visited two agricultural farms in order to gain
first hand information.
3.20 (1) Kudige farm: This farm was established in 1942 in 190 hectares but
developed as a complex which includes an agriculture farm for production of
foundation seeds, a horticultural farm, a rural training center, an animal husbandry
wing with piggery, poultry and hybrid cows and a sericulture farm which is not
operative. Some part of the land has been given to other departments to establish a
sports centre of the department of Youth Services and some government schools.
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The farm area is not fenced, with the result that portions of the farm are
encroached and cattle from adjoining villages graze on the land. A lift irrigation
scheme has been provided for the cultivation of paddy as the rainfall has
decreased considerably over the years. There is practically no activity in the
horticulture farm except for the production of about six thousand cuttings or grafts
from fruit trees. The paddy cultivation is also not profitable. Large areas are lying
vacant and most of the fruit yielding trees are old, requiring replacement. It is a
potentially viable farm where with a little investment, several agro-based
activities could be taken up. Training in farming practices is conducted regularly
though many sanctioned posts are not filled up. The training programmes depend
on annual grants.
3.21 (2) Ratnapura farm: The farm was established in 1958 in 12.70 hectares in order to produce foundation seeds of ragi. Paddy is grown in 7.20 hectares of low lying irrigated land. With the failure of rainfall and inadequacy of water facilities, the farm is almost abandoned. A watchman and a cart man look after the property. The godown, office and staff quarters are in disuse. A few tamarind trees fetch revenue of about Rs. 7000/- annually against the annual expenditure on the farm of Rs. 3.00 lakhs.
3.22 The agricultural seed farms of the government occupy nearly 1000 hectares and
much money and effort have been invested in them for the last forty years.
However government has now begun to consider these farms as more of a liability
and a burden than an asset. Not only is the income from the farms steadily
decreasing but an increasing amount of expenditure is required to retain the farms
at their present level of development. Another problem is that of encroachment
since most of the farms are not fenced. The government is therefore
contemplating steps to divest itself of the farms. A proposal to establish a farm
agency which could borrow money in order to increase the investment in the land
and put it to optimum use was shelved because of reluctance to incur any more
expenditure on the farms. Two of the farms have been transferred to the
University of Agriculture Sciences, Dharwad, for the production of breeder seeds.
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Recently the Bylekoppa farm, with two hundred acres of good black cotton soil,
with irrigation facilities and situated by the side of the high way, was handed to
the Forest department for raising social forestry. Government is also taking action
to lease twelve farms to unemployed agriculture graduates.
3.23 It is true that it is no longer necessary for government to involve itself in the
production of certified seeds. There was a need for this at one time but the farms
have outlived the purpose for which they were conceived with the advent of
private agencies into the field. It is not necessary for government to duplicate
efforts in the private sector at a much higher cost. Government departments have
also poor managerial skills in production activities. Besides this, it is a waste of
human resources to deploy staff in these farms instead of concentrating efforts on
improvement of extension services. With liberalization and the coming of the
market economy, government is deliberately withdrawing from many sectors
which was at one time exclusively the purview of the government. In the case of
agriculture, even the regulatory role of certifying seeds is no longer exclusively
the duty of government since the new Seed Policy permits seed companies to
certify their seeds themselves. It is expected that market forces will help private
seed companies producing good seeds to flourish while the rest will be forced out
of the market.
3.24 In addition to the production of certified seeds, some private companies are also
involved in research and in the production of breeder seeds.
3.25 At the same time there is certainly need to increase the supply of seeds of good
quality raised under controlled scientific methods. This will substantially increase
agricultural production and improve productivity. As already indicated, only
about 25 percent of the seeds used by our farmers are certified or quality seeds.
Discussions were held by the Commission with the representatives of the Seeds
Association and individual seed companies in order to gauge the scope for further
expansion of the production of certified seeds. The seed companies revealed that
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they would be able to expand their activities and increase substantially the
production of good seeds if they had the use of tracts of land instead of depending
almost entirely on contract farmers as they are doing at present. There is thus a
demand for land from private seed companies while at the same time government
has more than 1000 hectares of land which they would like to dispose off.
3.26 The Commission is vehemently of the opinion that it is not desirable to lease
government farms to individuals as is now being proposed. It will be difficult to
identify the persons to whom this benefit is to be given. It will also be impossible
to ensure that these unemployed agriculture graduates will use the lands for
agricultural operations. It will be very difficult to get back the land in case the
leases do not abide by the conditions under which it was given.
3.27 The government agriculture farms should not be considered to be liabilities. They
are valuable government assets and should be treated as such. They should not be
used to benefit individuals but to help the community of farmers. There is also no
reason to thrust them on other departments merely because the department of
Agriculture finds it difficult to protect or preserve them.
University Farms
3.28 There are two Universities of Agriculture Sciences in Karnataka which carry out
research and teaching activities. The University of Agriculture Sciences,
Bangalore has twenty three research stations spread over six agro-climate zones
of the fifteen southern districts covering an area of 2820 hectares. However less
than 100 hectares in six research stations are used to produce breeder seeds.
During 2003-04 a target has been set to produce 60000 kgs. of breeder seeds in
10 crops. A few research stations such as Konehally (Tumkur district) and
Nagamangala (Mandya district) are not viable due to lack of irrigation facilities
and non filling up of technical posts. The University has proposed to transfer
these two farms to the University of Animal Sciences research stations.
101
3.29 Since the production of breeder seeds is only one of the several activities of the
research stations of the University, it is difficult to compute separately the income
and expenditure involved in the process of production of breeder seeds. However
during the year 2002- 03 an amount of Rs. 1190.51 lakhs has been spent towards
salary and Rs. 134.63 lakhs towards production of seeds / crops in twenty three
research stations. The revenue receipts for the year were Rs. 140.90 lakhs. The
receipts for the year 2003-04 are expected to be Rs. 167.98 lakhs against a
budgeted amount of Rs. 1204.55 lakhs for salary and Rs. 141.85 lakhs for
production of seeds / crops.
3.30 The University of Agriculture Sciences, Dharwad has nine farms in the districts of
Bijapur, Bagalkot, Belgaum, Gulburga, Uttar Kannada and Dharwad occupying
an area of 463 hectares. 1338 quintals of breeder seeds were produced in these
farms during the year 2002-03. An expenditure of Rs. 85 lakhs was incurred
towards salary and Rs. 145 lakhs towards development costs.
3.31 The details of the farms of the Universities of Agriculture Sciences are given in
Annexures 4 and 5
3.32 In the case of these farms a very small portion of the land is used for raising
breeder seeds. However the Universities are of the opinion that the remaining land
is required for training and research since each agriculture college affiliated to the
University is given some hectares of land for practical work and demonstration. It
is a fact that the Universities also feel the constraint of funds because of which
they are unable to make optimal use of the land in the University farms. Under the
circumstances the Universities may examine whether there is scope for private
participation in the utilization of the land in the University farms.
102
The recommendation of the Commission is as follows:
Recommendation
The Agriculture department has graded the farms into categories B, C, D and E
in terms of reducing viability. Only two farms are graded as ‘B’, seven as ‘C’
and the rest of the forty are ‘E’. The Agriculture department should study the
farms in detail and determine whether they would like to retain any with the
department. This may not be more than one in each agro –climatic zone.
The remaining farms should be given on 15 years' lease to private seed
companies on the basis of open tenders. Only those companies which are
registered with the government as seed companies will be eligible to participate
in the tender. The tender document should indicate details of each farm such as
the area, type of soil, irrigation facilities, buildings etc. The lowest amount
acceptable for tender should be specified in the tender document. The lease
deed should be a carefully drafted legal document which should specify the
conditions of the lease. One of the conditions should be that the land should be
utilized only for seed production and research activities. Another condition
should be that the company should make maximum use of the irrigation
potential in the land and also make economic use of water through the use of
sprinkler and drip irrigation techniques.
Those farms for which there are no takers at all and which are totally unviable
may be handed over to the Forest department for raising social forestry.
103
II. Horticulture Farms
3.33 Horticulture has in recent years become a more profitable activity in Karnataka
than agriculture. Farmers are now keeping aside good land for horticulture and
cash crops. There is considerable technical advancement in horticulture and the
returns are extremely encouraging. For example, a quarter hectare of floriculture
can generate an income of Rs. 7500 a day.
3.34 The department of Horticulture was established in the 1970s at a time when there
was very little knowledge about horticulture or much extension work by the
department. Dr. Mari Gowda, the legendary director of Horticulture, decided that
the best way to popularize the growing of vegetables and fruits would be for the
government to establish a large number of horticulture farms. In those days there
was plenty of wasteland available and he was able to easily persuade the Deputy
Commissioners of the districts to donate government land or wasteland to the
department. In most of the cases there was no budgetary allocation but this did
not deter him from establishing the farms. His vision was that by growing fruit
trees everywhere in the State on these farms, the growing and eating of fruits
would be popularized. He did not even believe in fencing the farms since his
philosophy was that there was no harm done if poor people entered the farms and
ate the fruits. Dr. Mari Gowda’s efforts resulted in the establishment of no less
than 415 horticulture farms and nurseries spread all over the State, of which 244
farms are under the direct control of the Horticulture department (State sector)
and 171 are under the zilla panchayats (district sector). It is to be noted that
Karnataka is one of the few States in the country – perhaps the only State – which
has government horticulture farms.
3.35 Because of the efforts of Dr. Mari Gowda and the department of Horticulture,
horticulture activities have now spread throughout the State and horticulture has
become big business. The government horticulture farms have helped in the
popularization of horticulture by supplying planting material and vegetable seeds.
104
The farms are also used for demonstration and training, as well as for collection
and preservation of germ plasm and for research.
3.36 However of late most of the farms have not been in a good shape and their
importance is diminishing. Most of them are incurring considerable financial loss.
According to the department of Horticulture, out of 415 farms, only 193 are
making a profit. However it is to be noted that even in the case of the farms
which are considered to be making a profit, the amount of income over
expenditure is marginal. Moreover, while computing these statistics, the
expenditure incurred on salaries has not been considered. If the expenditure on
salaries is also taken into account then all the farms will have to be considered to
be working under loss.
3.37 Annexure 6 gives the details of the expenditure and income on horticulture farms
during 2002-03. It may be seen that the total expenditure on development
activities during the year was Rs.524.76 lakhs and on salaries Rs. 1589.93 lakhs
whereas the income was only Rs. 741.91 lakhs.
3.38 The problem is that the farms not only need continuous maintenance but
additional expenditure is required to replace old fruit trees as well as to improve
irrigation facilities and soil conservation. Without this the farms deteriorate and
the income decreases. According to the department an amount of at least
Rs.62,500 has to be spent annually on every hectare in order to exploit the full
potential of the land. As against this, the government is budgeting an average
Rs. 2500 to 5000 per hectare on horticulture farms. In addition, the staff salaries
keep increasing. This increases the expenditure on the farms without necessarily
improving the maintenance or profitability.
3.39 The members of the Commission visited the Kudige horticulture farm in Kodagu
district and the Yelachanahally horticulture farm near Yelwal (Mysore district)
105
3.40 The Kudige horticulture farm occupies an area of 4 hectares and is part of an
agriculture farm complex of 200 hectares. It is not fenced. There are a few old
trees of sapota, coconut, mango and guava which fetch some revenue. The farm
supplies grafted fruit seedlings on indent. It is under the zilla panchayat and the
buildings are in a dilapidated condition requiring repairs and maintenance. The
annual allotment of budget to the farm has been reduced. The farm is irrigated by
means of borewells. The farm is located some distance from the town making it
difficult to market the produce. The staff comprise of a horticulture assistant,
head gardener, gardener and three regular daily wage labourers. The expenditure
on the staff is considerably in excess of the income derived from the farm. About
6000 grafts are being produced annually which are supplied to the Social Welfare
department for supply to persons belonging to the scheduled castes and scheduled
tribes under various government schemes.
3.41 The Yelachanahally horticulture farm is near Yelwal (Mysore district). It was
established in 1971. The area of the farm is about 190 hectares. This farm is also
not fenced. The annual expenditure incurred on the farm is approximately Rs.
14.5 lakhs as against the income of Rs. 8.00 lakhs. The farm has 150 hectares of
old cashew trees which have very poor yield. There are also a few coconut
grooves and some sapota and mango trees. The farm supplies 35000 mango
grafts to the public and to the Social Welfare department. A tank and a stream
which earlier provided water to the farm have dried up due to the long drought.
The yield of the water in the two borewells is also much reduced. There are 12
permanent daily wage labourers on the farm.
3.42 Just as in the case of the agriculture farms, the government has begun to consider
the horticulture farms as more of liabilities than as assets. They have begun to
discuss ways of disposing off the horticulture farms as they are unwilling to invest
more money on them. Leasing the farms to unemployed graduates has been
mooted in the case of the horticulture farms also. The Commission is of the
opinion that the horticulture farms should be considered as valuable assets and
106
107
that they should not be disposed off without due care. It is not desirable to lease
them to individuals since this will result in land grabbing.
3.43 The department of Horticulture is interested in retaining some of the farms which
they would like to convert into biotechnologies centers, model floriculture
centers, seed production units and centers for preservation of valuable germ
plasm.
Recommendation
The department of Horticulture should study the matter carefully and decide
which of the farms they need to retain.
The government should provide enough funds for these limited number of
farms so that they may realize fully the purpose for which they were set up. The
farms could be permitted to retain a part of the income generated by them so as
to encourage them to become self sufficient. The remaining farms should be
leased to horticulture companies on the basis of open tender on a national basis
for the setting up of horticulture based businesses. This will not only bring
investment into the State, but it will help our farmers by training them in the
use of improved technology in the growing of fruits and vegetables and by
purchasing the crops from them. The lease should be given for a maximum
period of 15 years. The department may determine the lowest tender which is
acceptable for each farm. It is suggested that many of the farms which are
making nominal profits may also be given on lease.
In addition to leasing the farms on the basis of open tender, the department may
also decide to enter into joint ventures with private companies in improving
certain farms. The land could be the government’s share in the enterprise and
the profits could be shared on an agreed basis.
Uncultivable area
Area under roads and buildings
Wet Dry Garden Total1 2 3 4 5 6 7 8 9 10 11 12
1 Chikkanahalli Sira Tumkur 1965 25.59 6.51 4.36 3.30 14.17 0.95 10.472 Nelamakanahalli Chickballapur Kolar 1973 28.60 20.40 20.40 6.20 2.003 Burudagunte Chintamani Kolar 1958 24.00 4.00 12.80 16.80 4.80 2.404 Bylakuppe Periyapatna Mysore 1961 84.25 10.00 48.00 58.00 18.00 8.255 Nugu H.D. Kote Mysore 1958 14.52 5.40 2.40 7.80 3.20 3.526 Haradanahalli C. Nagara C.Nagara 1954 11.06 2.00 7.80 9.80 1.267 Shivalli Mandya Mandya 1965 8.80 8.00 8.00 0.808 Lingadahalli Tarikere Chickmagalur 1958 40.20 35.40 35.40 4.809 Koteswara Kundapur Udupi 1963 11.02 6.53 0.80 7.33 3.69
10 Belthangadi Belthangadi D.Kannada 1958 9.91 2.30 2.66 4.96 0.95 4.0011 Hallikere Bhadravathi Shimoga 1958 21.92 14.00 1.60 15.60 6.3212 Kutrahalli Shikaripura Shimoga 1962 14.49 3.20 7.60 10.80 1.20 2.4913 Gunderi Holalkere Chitradurga 1958 27.22 2.40 14.40 6.00 22.80 1.20 3.2214 Hombai Gadag Gadag 1964 20.97 20.00 20.00 0.9715 Rattihalli Hirekerur Haveri 1962 18.34 2.00 13.60 15.60 2.7416 Havanagi Hangal Haveri 1959 10.30 9.00 9.00 0.30 1.0017 Haliyal Haliyala U.Kannada 1958 12.23 1.20 7.20 8.40 3.8318 Soundalaga Chikkodi Belgaum 1961 9.55 1.30 5.16 6.46 0.05 3.0419 Zadshapur Belgaum Belgaum 1961 9.67 3.80 4.20 0.78 8.78 0.07 0.8220 K. Chandargi Ramdurga Belgaum 1960 10.19 1.00 6.20 0.65 7.85 0.98 1.3621 Hukkeri Hukkeri Belgaum 1968 21.81 1.00 15.40 16.40 5.4122 Soundatti Soundatti Belgaum 1955 20.63 13.60 13.60 4.80 2.2323 Mudhol Mudhol Bagalkot 1958 25.47 6.00 18.30 24.30 1.1724 Indi Indi Bijapur 1964 22.64 2.00 18.00 20.00 2.6425 Almel Sindagi Bijapur 1964 33.03 25.80 3.00 28.80 4.2326 Muddhebihal Muddhebihal Bijapur 1967 20.84 19.10 19.10 1.7427 Gangavathi Gangavathi Koppal 1956 22.00 18.94 0.26 19.20 2.8028 Byrapura Harapanahalli Davanagere 1964 23.29 5.00 14.40 19.40 0.57 3.3229 Kotnur Gulbarga Gulbarga 1958 25.80 1.50 14.60 2.60 18.70 7.1030 Aland Aland Gulbarga 1959 10.70 1.60 7.20 8.80 1.90
Area in hectares
Annexure I
Area under cultivation
PARTICULARS OF DEPARTMENTAL FARMS
Sl.no. Name of the farm Taluk District Year of establishment
Total areaI. SEED FARMS UNDER THE CONTROL OF DEPARTMENT OF AGRICULTURE
108
Uncultivable area
Area under roads and buildings
Wet Dry Garden Total1 2 3 4 5 6 7 8 9 10 11 12
Area under cultivationSl.no. Name of the farm Taluk District Year of establishment
Total area
31 Sedam Sedam Gulbarga 1959 5.60 3.60 3.60 2.0032 Reddiwadgi Jewargi Gulbarga 1964 21.01 16.87 16.87 1.30 2.8433 Hattigudur Shahpur Gulbarga 1964 19.66 2.00 15.66 17.66 1.00 1.0034 Chattapur Chittapur Gulbarga 1965 22.72 21.00 21.00 0.40 1.3235 Chandapur Chincholi Gulbarga 1961 16.52 1.00 13.00 14.00 2.22 0.3036 Bhalki Bhalki Bidar 1958 7.51 3.18 2.80 5.98 0.73 0.80
Total 732.06 118.33 436.98 20.05 575.36 48.92 107.78
1 Chandurayanahalli Magadi B'lore Rural 1958 13.36 1.80 7.05 8.85 1.61 2.902 Varadahalli Chickballapur Kolar 1958 20.04 16.40 16.40 2.84 0.803 Hirehalli Tumkur Tumkur 1958 9.96 6.40 6.40 2.76 0.804 Rathnapura Hunsur Mysore 1958 12.70 7.20 3.20 10.40 1.60 0.705 Sanoor Karkala Udupi 1958 15.10 2.54 2.50 4.64 9.68 3.66 1.766 Haralahalli Honnali Davanagere 1958 12.87 6.97 2.80 0.30 10.07 0.40 2.407 Chickbantanahalli Jagalur Davanagere 1958 23.43 5.30 9.90 15.20 6.23 2.008 Athani Athani Belgaum 1961 10.50 8.52 8.52 1.989 Madarkandi Jamkhandi Bagalkot 1958 14.18 10.39 1.20 11.59 2.59
10 Guladahalli Koppal Koppal 1969 22.84 9.60 5.60 15.20 4.80 2.8411 Gundinahole Kudligi Bellary 1969 40.00 6.00 13.00 4.00 23.00 14.00 3.0012 Yadgir Yadgir Gulbarga 1958 14.20 12.20 12.20 1.00 1.0013 Hudgi Humnabad Bidar 1961 11.43 2.00 7.43 9.43 2.00
Total 220.61 51.80 96.20 8.94 156.94 38.90 24.77Seed farms total 952.67 170.13 533.18 28.99 732.30 87.82 132.55
1 R.K. Shala Anekal B'lore Urban 1927 34.50 2.00 21.00 23.00 0.50 11.002 Bhuvanahalli Malur Kolar 1982 24.80 16.00 16.00 4.80 4.003 Irabanahalli Malur Kolar 1987 15.09 13.00 13.00 0.20 1.894 Kagathi Chintamani L 1976 22.26 3.00 13.00 0.30 16.30 0.80 5.165 Somanahalli Maddur Mandya 1939 15.14 7.26 0.62 7.88 0.26 7.006 Kudige Somwarpet Kodagu 1961 6.20 5.20 0.80 6.00 0.207 Arakalagud Arakalgud Hassan 1975 18.43 2.30 5.00 7.30 6.20 4.938 Thyavanagi Channagiri Davanagere 1979 15.92 9.60 9.60 6.329 Kadajji Davanagere Davanagere 1980 88.80 12.00 48.00 60.00 20.80 8.00
10 Devihosur Haveri Haveri 1924 34.84 26.00 0.64 26.64 8.2011 Malagi mundagod U.Kannada 1971 12.40 3.48 4.28 7.76 1.64 3.0012 Kumta Kumta U.Kannada 1919 37.51 6.00 16.74 22.74 9.07 5.7013 Kampli Hospet Bellery 1971 53.80 35.70 4.80 40.50 1.80 11.5014 Kotnur Gulbarga Gulbarga 1970 9.68 7.20 7.20 1.55 0.9315 Aurad Aurad Bidar 1984 8.17 5.60 5.60 2.57
Total 397.54 80.54 171.30 17.68 269.52 50.19 77.83
III. AGRICULTURAL SCHOOL FARMS
II. SEED FARMS UNDER THE CONTROL OF DEPARTMENT OF ZILLA PANCHAYATS
109
Uncultivable area
Area under roads and buildings
Wet Dry Garden Total1 2 3 4 5 6 7 8 9 10 11 12
Area under cultivationSl.no. Name of the farm Taluk District Year of establishment
Total area
1 Kudige Somwarpet Kodagu 1942 190.00 10.00 10.00 6.00 26.00 68.40 95.602 Bagalkot Bagalkot Bagalkot 1948 30.06 15.00 15.00 9.00 6.06
Total 220.06 10.00 25.00 6.00 41.00 77.40 101.66
1 V.C. Farm Mandya Mandya 1955 30.95 4.00 2.00 2.46 8.46 11.64 10.852 Dharwad Dharwad Dharwad 1952 18.00 11.00 11.00 7.003 Oddarahatti Gangavahi Koppal 1958 25.00 10.40 0.80 11.20 2.80 11.00
Total 73.95 14.40 13.00 3.26 30.66 14.44 28.85
1I.J.A.E.T.C., VC Farm Mandya Mandya 1965 6.00 4.25 1.25 5.50 0.50
1 ADC, Thyavanagi Channagiri Davanagere 1975 82.38 48.00 48.00 34.382 ADC, Dharwad Dharwad Dharwad 1976 29.74 2.00 14.00 16.00 9.97 3.773 ADC, Konnur Naragund Gadag 1971 38.74 23.89 5.78 39.67 1.00 8.074 TADC, Dhadesugur Sindhanoor Raichur 1965 124.04 10.20 52.84 63.04 36.00 25.00
Total 274.90 84.09 72.62 0.00 166.71 46.97 71.22GRAND TOTAL 1925.12 363.41 816.35 55.93 1235.69 276.82 412.61
VII. AGRICULTURAL DEVELOPMENT CENTRES
IV. AGRICULTURAL FARMS - STATE SECTOR
V. RURAL DEVELOPMENT TRAINING CENTRE FARMS
VI. I.J.A.E.T.C. FARM
110
Crop 1998-99 1999-00 2000-01 2001-02 2002-031 2 3 4 5 6 7
1 Paddy 5138 4120 3767 3593 23492 Jowar 598 546 736 701 453 Ragi 907 977 1069 1079 3944 Bajra 184 318 158 189 605 Wheat 234 524 400 291 06 Maize 1257 1111 440 266 718
Total cereals 8318 7596 6570 6119 35667 Redrgam 250 405 306 329 428 Greengram 109 62 107 36 419 Blackgram 32 18 15 21 42
10 Cowpea 126 65 54 28 211 Gram 272 212 162 248 512 Green Manure 0 0 0 56 21
Total pulses 789 762 644 718 15313 Groundnut 44 36 6 0 5014 Soyabean 129 139 156 55 24615 Sunflower 16 8 6 0 016 Sesamum 1 6 1 0 017 Safflower 134 103 68 76 018 Castor 0 0 0 0 0
Total oil seeds 324 292 237 131 29619 Cotton 18 14 7 30 3
Total C.Crop 18 14 7 30 3Grand Total 9449 8664 7458 6998 4018
Sl.no.
Annexure 2
DETAILS OF CERTIFIED / QUALITY SEEDS PRODUCED ON DEPARTMENTAL FARMS(Good seed )
Qty. in quintals
111
Seed production centre
Salary Other expen-diture
Exp. on seed prod-
uction
Total Exp-enditure
Total Income
Cate-gory
Salary Other expen-diture
Exp. on seed prod-uction
Total Exp-enditure
Total Income
Cate-gory
Salary Other expen-diture
Exp. on seed prod-
uction
Total Exp-enditure
Total Income
Cate-gory
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
1 Chikkanahalli 6.28 0.62 2.96 9.86 2.57 E 3.59 1.21 2.58 7.38 0.56 E 2.86 0.77 2.41 6.04 1.69 E2 Nelamakanahalli 0.47 0.13 0.58 1.17 0.09 E 0.43 0.15 0.75 1.33 0.65 E 0.48 0.11 0.71 1.30 0.23 E3 Burudagunte 1.21 0.17 0.15 1.54 0.29 E 1.09 0.31 0.72 2.12 0.29 E 0.56 0.24 0.94 1.74 0.77 E4 Bylakuppe 1.89 0.19 1.57 3.65 0.46 E 0.42 0.12 1.71 2.24 1.01 E 0.92 0.01 0.54 1.47 0.00 E5 Nugu 2.26 0.14 1.98 4.38 0.85 E 2.10 0.29 1.94 4.33 1.75 E 1.47 1.93 0.89 4.29 0.57 E6 Haradanahalli 1.91 0.16 0.82 2.88 0.21 E 2.02 0.23 0.79 3.04 0.50 E 2.85 0.27 1.26 4.39 1.45 D7 Shivalli 4.28 0.23 2.52 7.03 0.17 E 2.97 0.52 4.36 7.84 1.54 E 3.13 0.48 3.74 7.35 1.47 E8 Lingadahalli 2.98 0.33 1.23 4.54 1.27 D 1.69 0.30 0.97 2.96 0.81 E 1.24 0.14 1.04 2.42 0.44 E9 Koteswara 0.44 0.22 1.66 2.32 1.43 E 0.59 0.12 0.77 1.49 1.32 B 0.50 0.23 1.44 2.17 0.92 E
10 Belthangadi 1.54 0.31 1.51 3.36 1.25 E 1.48 0.99 0.38 2.85 1.01 D 0.98 0.15 0.89 2.02 0.74 E11 Hallikere 3.39 0.68 5.22 9.29 5.19 E 2.53 0.76 6.17 9.45 6.08 E 3.13 1.24 5.40 9.77 5.59 D12 Kutrahalli 1.95 0.80 1.87 4.61 2.10 D 2.29 0.60 1.36 4.25 1.07 E 2.85 0.44 1.49 4.78 0.54 E13 Gunderi 3.58 0.52 1.80 5.89 0.56 E 2.48 0.58 2.40 5.46 1.34 E 2.18 0.56 1.92 4.66 1.66 E14 Hombala 3.74 0.36 1.34 5.43 0.44 E 3.07 0.55 1.71 5.33 2.77 C 2.68 0.46 1.56 4.69 2.47 C15 Rattihalli 3.83 0.32 1.80 5.95 0.66 E 2.80 0.39 1.47 4.66 1.11 E 1.86 0.28 1.37 3.52 0.48 E16 Havanagi 3.33 0.05 1.73 5.11 2.03 C 2.39 0.17 0.44 3.00 1.93 B 1.84 0.32 2.20 4.36 0.96 E17 Haliyal 3.09 0.17 1.91 5.16 0.29 E 2.93 0.29 1.41 4.63 0.64 E 2.39 0.13 0.83 3.35 0.59 E18 Soundalaga 2.37 0.06 1.52 3.96 1.34 E 2.76 0.14 1.46 4.36 0.97 E 2.15 0.21 0.91 3.27 1.22 C19 Zadshapur 7.72 0.17 0.74 8.63 2.65 C 5.24 0.21 0.99 6.44 0.33 E 4.30 0.29 3.19 7.79 0.51 E20 K. Chandargi 3.44 0.32 1.63 5.38 1.78 D 2.87 0.25 2.37 5.49 2.08 E 3.04 0.29 1.17 4.50 0.61 E21 Hukkeri 3.17 0.10 0.94 4.21 0.85 E 3.02 0.14 1.32 4.48 1.57 C 4.10 0.19 1.68 5.97 1.01 E22 Soundatti 5.02 0.10 1.50 6.61 1.13 E 3.57 0.16 1.96 5.69 1.54 E 4.25 0.22 1.89 6.35 1.35 E23 Mudhol 5.58 0.49 2.47 8.54 1.88 E 4.37 0.53 2.15 7.05 2.52 D 3.53 0.78 2.84 7.15 0.92 E24 Muddhebihal 3.37 0.11 0.83 4.32 1.24 C 2.82 0.22 1.24 4.28 0.44 E 0.00 0.00 0.00 0.00 0.0025 Indi 3.02 0.05 1.37 4.44 0.72 E 1.73 0.30 2.73 4.75 0.74 E 1.79 0.21 2.67 4.67 0.0026 Almel 3.14 0.46 2.03 5.63 0.59 E 2.55 0.36 2.89 5.80 0.11 E 2.11 0.43 3.15 5.69 0.0027 Gangavathi 9.37 0.55 4.01 13.93 6.40 C 13.06 1.82 4.49 19.37 6.17 C 5.67 1.43 5.64 12.75 9.58 C28 Byrapura 1.86 0.11 1.39 3.36 0.56 E 2.18 0.17 2.22 4.58 0.94 E 0.88 0.56 1.99 3.43 1.22 E29 Kotnur 4.15 0.26 1.73 6.14 1.26 E 3.23 0.33 1.89 5.46 2.68 C 2.48 0.14 1.69 4.31 2.15 C30 Aland 2.52 0.46 1.51 4.49 2.19 C 2.81 0.27 1.51 4.60 2.71 C 1.62 0.15 1.36 3.14 2.31 C31 Sedam 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.0032 Reddiwadgi 3.15 0.22 1.47 4.84 2.04 C 1.93 0.29 1.68 3.91 2.37 C 1.21 0.28 1.52 3.02 2.58 B33 Hattigudur 4.54 0.25 1.14 5.93 0.73 E 2.26 0.13 0.72 3.12 0.39 E 1.99 0.24 0.94 3.18 0.28 E34 Chattapur 3.20 0.12 2.03 5.34 3.39 C 2.95 0.32 2.29 5.55 2.69 C 2.38 0.14 1.14 3.66 2.31 C35 Chandapur 2.07 0.18 1.77 4.03 2.25 C 1.60 0.25 2.27 4.12 1.63 E 0.56 0.14 1.81 2.51 1.20 E36 Bhalki 5.09 0.18 0.62 5.88 1.73 C 3.42 0.13 1.30 4.85 1.05 E 2.50 0.84 2.43 5.77 1.98 E
Annexure 3CATEGORYWISE DETAILS OF INCOME AND EXPENDITURE FOR THE YEAR (1999-2000, 2000-2001 and 2001-2002)
1999 - 2000 2000 - 2001 2001 -2002
SEED PRODUCTION CENTRES UNDER THE CONTROL OF THE DEPARTMENT OF AGRICULTURE
(Rs. in lakhs)
Sl.no.
112
Seed production centre
Salary Other expen-diture
Exp. on seed prod-
uction
Total Exp-enditure
Total Income
Cate-gory
Salary Other expen-diture
Exp. on seed prod-uction
Total Exp-enditure
Total Income
Cate-gory
Salary Other expen-diture
Exp. on seed prod-
uction
Total Exp-enditure
Total Income
Cate-gory
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
CATEGORYWISE DETAILS OF INCOME AND EXPENDITURE FOR THE YEAR (1999-2000, 2000-2001 and 2001-2002)
1999 - 2000 2000 - 2001 2001 -2002(Rs. in lakhs)
Sl.no.
TOTAL 118.94 9.58 59.33 187.85 52.60 E 97.22 13.58 65.42 176.23 55.28 76.46 14.30 64.66 155.43 49.80 E
113
Seed production centre
Salary Other expen-diture
Exp. on seed prod-
uction
Total Exp-enditure
Total Income
Cate-gory
Salary Other expen-diture
Exp. on seed prod-uction
Total Exp-enditure
Total Income
Cate-gory
Salary Other expen-diture
Exp. on seed prod-
uction
Total Exp-enditure
Total Income
Cate-gory
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
CATEGORYWISE DETAILS OF INCOME AND EXPENDITURE FOR THE YEAR (1999-2000, 2000-2001 and 2001-2002)
1999 - 2000 2000 - 2001 2001 -2002(Rs. in lakhs)
Sl.no.
1 Chandurayanahal 2.06 0.49 1.14 3.69 1.08 E 2.15 0.96 0.50 3.61 1.42 D 2.69 1.17 0.85 4.71 1.20 D2 Varadahalli 2.66 0.45 1.12 4.23 0.17 E 2.19 0.89 1.08 4.15 0.81 E 1.65 0.43 1.15 3.23 0.38 E3 Hirehalli 3.14 0.20 0.30 3.63 0.61 C 2.84 0.31 0.29 3.44 0.31 D 2.58 0.60 0.35 3.53 0.42 D4 Rathnapura 1.04 0.45 1.87 3.36 0.91 E 1.35 0.15 2.04 3.54 1.15 E 1.17 0.12 1.80 3.09 0.93 E5 Sanoor 3.41 0.15 1.76 5.32 2.00 C 2.46 0.27 1.65 4.38 2.10 C 2.00 0.21 1.77 3.98 0.12 E6 Haralahalli 2.70 0.77 1.91 5.38 2.18 D 1.38 0.80 2.62 4.80 2.18 E 1.97 0.33 2.18 4.48 3.50 B7 Chickbantanahalli 2.73 0.40 0.65 3.78 0.66 D 0.74 0.26 0.64 1.64 0.41 E 1.62 0.27 0.70 2.59 0.61 E8 Athani 3.18 0.61 0.29 4.08 0.86 D 3.04 0.26 0.36 3.66 1.03 C 1.73 0.17 0.32 2.21 0.66 C9 Madarkandi 2.94 0.07 1.15 4.15 2.49 C 2.97 1.30 0.72 4.99 1.11 D 2.50 0.50 1.25 4.25 0.20 E
10 Guladahalli 5.09 0.43 0.00 5.52 1.91 C 15.39 0.46 1.52 17.37 1.49 E 3.88 0.30 2.49 6.67 1.15 E11 Gundinahole 3.31 0.54 2.12 5.96 1.68 E 2.73 0.35 1.69 4.77 0.39 E 2.89 0.14 1.61 4.64 0.08 E12 Yadgir 1.55 0.12 1.77 3.43 0.63 E 2.86 0.12 1.02 3.99 0.49 E 2.48 0.00 1.41 3.89 0.88 E13 Hudgi 2.83 0.35 1.72 4.90 0.00 2.66 0.16 1.89 4.71 1.68 E 1.74 1.74 1.64 3.33 1.38 E
TOTAL 36.63 5.02 15.79 57.44 15.18 42.77 6.27 16.02 65.05 14.58 28.88 5.98 17.53 50.60 11.52
SEED PRODUCTION CENTRES UNDER THE CONTROL OF THE DEPARTMENT OF AGRICULTURE
114
Name of the Zone & Research Station Area of the
farm (ha)
Teachingpurpose
(ha)
Researchpurpose
(ha)Rainfed Irrigated Total 2001-02 2002-03
ZONE-4ZARS, Tiptur 626.00 45.00 2.00 47.00 1.00 16.70ARS, Arasikere 82.50 45.20 6.20 51.40 7.40 3.00 10.60ARS, Hiriyur 71.00 25.90 32.80 58.70 1.60 3.00 13.00Zone-5 ZARS, GKVK 538.00 175.50 12.00 187.50 23.50 13.40 63.70 46.40MRS, Hebbal 115.70 24.50 8.20 32.70 2.70 2.00 4.10 16.00ARS, Chintamani 74.10 63.50 63.50 4.30 1.50 7.90 35.60ARS, Balajigapade 38.40 26.00 2.00 28.00 14.60 8.00 2.70FRS, Hessaraghatta 4.00 0.70 0.70 1.40 0.50Zone-6 ZARS, mandya 243.50 164.30 164.30 33.90 34.20 17.70 39.50ARS, Nagenahalli, 25.20 2.00 16.40 18.40 10.00 3.50 51.00ARS, Nagamangala 47.00 14.50 14.50 2.00 2.00ARS, Madenur 42.00 23.50 1.50 25.00 7.40 2.50 1.50Zone-7 ZARS, Navile 78.00 56.50 1.50 58.00 6.30 9.00 10.00 8.00ARS, Honnavile 50.20 7.40 14.00 21.40 7.30 6.50 2.00ARS, Gunjevu 141.00 56.00 2.00 58.00 5.80 4.00 0.10ARS, Kathalagere 124.90 2.70 63.70 66.40 29.60 12.10 6.00ARS, Bhavikere 152.80 47.50 9.70 57.20 14.00 12.70 3.70Zone-9 ARS, Mudigere 181.30 57.90 12.60 70.50 8.00 11.00 46.80 29.50ARS, Madikere 7.00 4.30 0.70 5.00 3.00 0.40 0.40ARS, Ponnampet 22.90 8.90 8.90 3.00 0.40 3.20 1.40Zone-10 ZARS, Brahmavara 115.00 30.80 6.70 37.50 10.70 6.00 21.10ARS, Kankanady 26.00 3.00 2.70 5.70 7.30 3.00 9.00 1.30ARS, Ullal 14.10 11.80 11.80 1.70 0.60 4.40
Total 2820.60 733.10 359.70 1092.80 205.10 136.80 162.40 267.50
Cultivated area (ha) Area used forseed (ha)
Annexure 4
AREA DETAILS OF RESEARCH STATIONS OF UAS, BANGALORE FOR THE YEAR 2002 - 03
114
Area (ha) Wet Dry Garden Total Salary Development
Activity
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
1 Almel Sindagi Bijapur 2002 42.00 38.00 1.00 39.20 2.80 241.00 17.90
2 Bagalkot Bagalkot Bagalkot 1951 29.30 4.14 24.16 28.30 1.00 168.00 10.09 5.68
3 Baithongal Baithongal Belgaum 1947 29.99 15.00 12.20 0.27 27.20 2.79 155.30 10.68 10.09
4 Kalloli Gokak Belgaum 1986 41.05 39.65 1.90 41.55 3.95 5.55 118.00 14.25 16.25
5 Malnoor Sharapur Gulbarge 1991 146.23 75.00 14.00 1.00 90.00 50.00 6.23 20.00 10.55 18.30
6 Mundagod Mundagod Karwar 1987 4.00 15.60 2.40 16.60 20.00 3.40 19.50 8.80 3.30
7 Nippani Chokkodi Belgaum 1938 22.50 2.00 17.90 0.60 19.90 2.60 162.50 8.85 25.85
8 Seed Unit Dharwad Dharwad 72.00 10.00 61.00 71.00 1.00 3304.00 22.69 29.90
9 Walmi Dharwad Dharwad 40.00 25.00 15.00 112.00 8.00
Area under
roads & buildings
Uncultivable area
Annexure 5
PARTICULARS OF UAS DHARWAD FARMS UNDER SEED UNIT
Taluk District Year of Estbt.
Sl. No.
Name of the Farm
Total area under cultivation Financial expenditure year (Rs. in lakhs)
Qty. of breeders seed
produced & distributed to progressive farmers in quarters
115
Expenditure on salaryZP SS ZP SS ZP SS
1 2 3 4 5 6 7 8 9 10 111 Bangalore ( 7 164 162 Bore wells 3.68 19.60 1.68 16.00 4.18 9.002 Bangalore ( 16 445 367 Bore wells 17.84 65.02 2.72 36.80 23.87 65.023 Kolar 33 1137 1094 Bore wells 1.01 44.41 3.41 10.46 22.45 96.364 Chitradurga 16 489 348 Bore wells 9.44 19.69 3.09 14.33 8.82 26.775 Davanagere 10 142 125 Bore wells 10.07 0 1.96 0 7.40 06 Tumkur 20 3860 1814 Bore wells 5.44 65.63 1.94 39.90 19.62 143.697 Shimoga 15 489 310 Bore wells 11.52 43.43 2.03 25.03 7.92 44.418 Mysore 25 968 495 Bore wells 3.18 34.65 3.22 34.50 17.22 163.899 Chamaraja 10 474 374 Bore wells 4.99 0 1.87 0 15.30 0
10 Mandya 27 1895 1323 Bore wells 12.91 43.88 2.76 13.68 26.28 205.7511 Hassan 17 974 607 Bore wells 13.50 29.22 10.28 50.43 2.18 19.4312 Kodagu 10 575 443 Bore wells 6.87 12.94 3.70 20.96 7.74 40.9513 Chickmaga 15 292 211 Bore wells 12.13 8.32 2.45 4.90 6.20 12.2814 Dakshina K 14 427 334 Bore wells 4.68 21.43 1.08 25.64 11.25 61.2615 Udupi 9 190 176 Bore wells 4.03 0 0.66 0 5.30 016 Belgaum 27 483 350 Bore wells 6.38 38.92 4.04 32.68 23.83 48.8117 Bijapur 9 248 201 Bore wells 2.07 16.50 0.65 2.12 7.40 32.3218 Bagalkot 7 79 54 Bore wells 4.56 0 1.34 0 6.24 019 Dharwad 8 43 43 Bore wells 3.78 10.01 0.98 10.87 8.73 27.9420 Gadag 9 81 75 Bore wells 7.20 0 3.48 0 15.84 021 Haveri 16 167 128 Bore wells 9.88 0 1.36 0 11.54 022 Uttara Kann 17 362 250 Bore wells 2.94 19.28 0.71 30.01 8.94 29.8323 Gulbarga 18 339 192 Bore wells 2.37 24.20 4.09 4.79 17.47 82.3524 Bellary 21 622 234 Bore wells 9.33 12.49 3.55 6.40 11.37 27.7425 Raichur 13 189 106 Bore wells 3.95 18.05 5.60 57.86 12.69 105.6726 Koppal 13 267 229 Bore wells 5.48 0 2.43 0 6.43 027 Bidar 13 500 151 Bore wells 3.65 11.36 1.97 14.35 4.80 24.95
Total 415 15901 10196 182.88 559.03 73.05 451.71 321.01 1268.42
Annexure 6
STATEMENT SHOWING THE NUMBER OF FARMS / NURSERIES DISTRICTWISE, EXTENT, INCOME AND EXPENDITURE DETAILS Area in acres
Year 2002-03 Rs. in lakhsSl.no. Name of the
districtNo. of farms
in the Total extent Area
developed Source of irrigation
Income Expenditure on
CHAPTER IV
SERICLTURE AND SILK FILATURES
CHAPTER 4
SERICULTURE AND SILK FILATURES
Introduction
4.1 Karnataka occupies a pre-eminent position in sericulture industry, being the
largest mulberry silk producing State in the country. The importance of
sericulture for the State lies in the fact that in addition to producing silk, it
provides employment to as many as 2.55 lakh people. Mulberry cultivation is
taken up in the State in 88,903 lakh hectares in 15,448 villages. It is concentrated
mainly in the eight districts of Bangalore [Urban], Bangalore [Rural], Kolar,
Tumkur, Chamarajnagar, Mysore, Mandya and Kodagu which account for 90.3
percent of cocoon production in the State. Mulberry is grown in an area of 76,716
hectares in these districts. Government is now encouraging the development of
sericulture in the remaining districts of the State with the result that mulberry is
cultivated in 12,187 hectares of the districts of North Karnataka, producing 9.7
percent of the total cocoon production in the State. Silk production in Karnataka
increased from 3274 metric tons in the period 1951-52 to 1955-56 to 42,829
metric tons in the period 1996-97 to 2001-02.
4.2 Government has played a very important role both as promoter and as regulator in
the development of sericulture. Huge investments in the development of
sericulture have been made under two World Bank projects. In the first project,
which was completed in 1986, the total expenditure incurred was Rs.8864 lakhs.
The expenditure incurred on the second project, which was completed in 1996,
was Rs. 6000 lakhs. In addition, Seri-2000, a Swiss Development Corporation
assisted project, is being implemented at a cost of Rs. 320.23 lakhs to develop a
new bivoltine race.
119
4.3 Some of the major schemes of the department of Sericulture are maintenance of
sericulture farms and grainages, training schemes, subsidy for construction of
rearing/reeling sheds, disease control programmes and extension services. The
government has also set up regulated cocoon markets and the Karnataka Silk
Exchange in order to provide facilities for sale of cocoons and raw silk. The
government has enacted the Karnataka Silkworm Seed, Cocoon and Silk Yarn
[Regulation of Production, Supply, Distribution and Sale] Act 1959 [hereinafter
indicated as ‘Act’] under which the government discharges several regulatory
functions.
4.4 Sericulture has until now been viewed as a subsistence activity of small and
marginal farmers. Government’s role has been that of production, development
and regulation. Thus government is the sole agency for the production of seed at
different levels from the breeder stock [P-4] to the commercial parent [P-1].
Government has taken on this responsibility in order to ensure that the seed is
produced under optimal conditions and to safeguard against diseases. Seed
cocoons are prepared in the seed areas under the supervision of the department.
In order to overcome malpractices and irregularities in marketing, to ensure stable
prices for farmers and to prevent speculation, government established regulated
markets for the buying and selling of cocoons under the Karnataka Silkworm
Seed, Cocoon and Silk Yarn [Regulation of Production, Supply, Distribution and
Sale] Act 1959. Under section 7 of this Act, no rearer can sell or agree to sell and
no person shall purchase or agree to purchase silkworm cocoons except in the
regulated cocoon markets established by the government under the Act.
Similarly, after government established the Silk Exchange in 1979 by amending
the provisions of the Act, silk yarn cannot be marketed anywhere except in the
silk exchanges.
120
4.5 In addition to government control over the buying and selling of silk cocoons and
yarn, all the protagonists of the silk industry, from the rearers to the silk traders,
have to be licensed by the department and license fees are collected at every
stage. The types of license required and the fees collected are as follows :
(in Rs.)
Sl. no. Category of License Fee per annum
1 Rearer 5
2 Chawki Rearer 10
3 Seed Preparer 1000
4 Reeling
a. for each Charaka
b. for each cottage basin
c. for each filature basin
20
100
100
5 To purchase cocoons for
reeling
100
6 Silk Trader [issue of license] 1000
7 Renewal 500
4.6 The justification given by the department for the licensing of rearers, chawki
rearers and seed preparers is that in the absence of licensing it may not be possible
to ensure that they use only certified seeds. This is necessary in order to keep a
check on the pebrine disease which devasted the sericulture industry in the 1980s.
The rearers get a license cum pass book, wherein entries are made relating to eggs
purchased from the licensed egg producers and government grainages, the inputs
provided and the technical guidance given by department officials. Information is
also recorded in the passbook with regard to the quantum and the price of cocoons
sold in the cocoon market. Similarly, the seed area market officers make entries
regarding the seed supplied to the egg producers in the pass books given to them.
In addition to license fees, the government collects market fees from the regulated
markets and the silk exchanges. Income is also realized from the sale of silkworm
eggs and from the activities of the silk farms. Penalties levied for violation of the
121
provisions of the Act are other sources of income for the government. The
maximum penalty that can be imposed for offences in violation of the Act is Rs.
50,000/- or confiscation of goods.
4.7 The details of revenue realized from the activities of the department of Sericulture
during the last five years are given in Annexure-I. Market fees is the major
source of income which amounted to Rs. 1408.754 lakhs in 1998. It declined to
Rs. 1228.412 lakhs in 2002-03. Next in importance is the grainage receipts which
also declined from Rs. 882.860 lakhs in 1998-99 to Rs. 349.754 lakhs in 2002-03.
Farm receipts which amounted to Rs. 13.320 lakhs in 1998-99 declined to Rs.
3,597 lakhs in 2002-03. Income from licenses remained more or less stagnant at
the level of about Rs. 12 lakhs between 1998-99 and 2001-02 and increased to Rs.
18,393 lakhs in 2002-03. Income under other items which increased from
Rs.23.812 lakhs in 1998-99 to Rs. 67.126 lakhs in 2001-02 declined to Rs. 53.061
lakhs in 2001-02 and to Rs. 36.778 lakhs in 2002-03. The total income declined
from Rs.2341.494 lakhs in 1998-99 to Rs. 1636.934 lakhs in 2002-03. Even the
income from the penalties has decreased over the years. The number of cases
booked declined from 4040 in 2000-01 to 393 in 2002-03 and the income from
the penalties declined from Rs. 82.80 lakhs in 2000-01 to Rs. 17.86 lakhs in 2002-
03. Thus, the revenue from fees and penalties is not only very limited, but it is
also declining.
SERICULTURE FARMS
Government has established sericulture farms which discharge the following
functions :
a. Supply of improved variety of mulberry cuttings/saplings to farmers
b. Conducting of field trials of the findings of the Research Institutes
c. Conducting of demonstration cum training programmes
122
4.8 There are 94 government silk farms. The total area of these farms is 2808 acres,
out of which the area actually utilized for sericultural activities is only 208 acres.
The department now proposes to retain about 1300 acres of land along with
buildings, wells, etc. and the remaining area of 1500 acres is proposed to be given
back to the government. The 1300 acres of land proposed to be retained by the
department includes 330 acres under social forestry.
4.9 Government sericulture farms have been developed for production of pure
Mysore basic seed and also for production of bivoltine seed cocoons. There are
nine sericulture farms in Mysore seed area which produce the basic female parent
required for production of commercial eggs. The remaining 85 farms are
involved in the production of bivoltine seed cocoons. However only forty five of
these farms are active.
4.10 Sericulture farms are classified into four categories for the production of seed at
different levels. They are:
P4 – Breeder stock
P3 – Parental stock
P2 – Basic seeds
P1 – Commercial parent
4.11 Annexure-II gives details about the production, income and expenditure of the
government sericulture farms. It may be seen from the statement that the
activities of the farms have been continually declining during the last few years.
The amount of leaves harvested decreased from 759040 kgs in 1998-99 to 568186
kgs in 2002-03. The number of cocoons harvested decreased from 182.478 lakhs
in 1998-99 to 120.651 lakhs in 2002-03. The income realized decreased from
Rs. 47.534 lakhs in 1998-99 to Rs.23.809 lakhs in 2002-03. At the same time, the
expenditure increased from Rs. 474.562 lakhs in 1998-99 to Rs. 544.394 lakhs in
2002-03. In 1998-99, the revenue generated by the farms was only 10 percent of
the expenditure of the farms. In 2002-03, it decreased still further to 4.37 percent.
123
4.12 According to the department of Sericulture, the reasons for the perceptible decline
in the performance of the government sericulture farms are as follows:
1. Insufficient water supply due to depletion of water level in bore wells
2. Insufficient labourers in the department due to regularization and deputation of
workers to other Departments
3. Insufficient allotment of funds to farms
4. Power cut and reduction of office staff.
4.13 The need to reorganize the government sericulture farms has been recognized by
the Department of Sericulture. The committee on Reorganisation of Sericulture
Department [December 2002] has identified thirty three farms which can be
retained and strengthened and sixty one farms which can be transferred to others.
There is no specific recommendation as to who should take over these redundant
farms.
Terms of reference:
4.14 The terms of reference for the Commission are to suggest improvements in the
revenue obtained from the sericulture industry and from silk filatures.
However, after holding discussions with the officers of the department, with the
Member Secretary of the Central Silk Board and with many experts in the field
of sericulture, the Commission is of the opinion that it is not possible to restrict
the scope of the study to the revenue from licence fees and silk filatures. The
revenue will not increase substantially by revision of the fees or even by
improving the government silk filatures, which are all running under loss.
Revenue can be increased from sericulture only by addressing the more basic
issues plaguing this industry.
124
4.15 The Commission therefore decided to study the obstacles in the path of the rapid
development of the sericulture industry in the State and the changes required in
the role of the government.
4.16 Sericulture in Karnataka continues to be dominated by the activities of small and
marginal farmers and 13,500 small silk reelers. These farmers and reelers are too
small and their activities too restricted for them to obtain credit from banks.
Sericulture in Karnataka therefore remains a subsidiary occupation and not an
agro business with big stake holders. The sweeping changes of liberalization
which have taken place in the production and marketing of agricultural and
horticultural crops have not taken place in sericulture. The role of the State
government with regard to sericulture continues to be protectionist. However,
with the opening of trade permitting the import of silk, Indian silk will have to
compete with silk in both the world and domestic markets. In order to do so, our
silk has to improve in quality, it has to be produced more economically and in
much greater quantities. The quality and productivity levels of silk in Karnataka
are not comparable to those of China.
4.17 It is a matter of concern that although Karnataka is supplying over 65 percent of
the country’s silk, it is sliding in terms of productivity and growth rate in
comparison with other silk producing States in India. For instance, the average
growth rate in productivity in the last two years in Karnataka is only 2.2 percent,
whereas it is 20.6 percent in Tamilnadu and a whopping 49.5 percent in West
Bengal. Karnataka’s share in the production of silk in the country has decreased
from 80 percent to 56 percent.
4.18 The Commission is of the opinion that there is urgent need for the State
government to examine the reasons for the poor progress of sericulture in the
State and to take remedial action. The greatest difficulty in the production of
quality silk efficiently and economically has been the fact that the silk weavers in
Karnataka are unable to get large quantities of silk yarn of uniform quality. This
125
is because they need to get the silk yarn from a large number of small reelers, and
that too, only in the Silk Exchanges established by the government. The reelers in
turn are required to buy the silk cocoons only in the regulated cocoon markets.
The conditions under which these cocoon markets operate are not conducive to
their purchasing large numbers of cocoons of uniform quality. The single biggest
obstacle, therefore, to the obtaining of large quantities of good yarn of uniform
quality is the restricting clauses of the Karnataka Silkworm Seed, Cocoon and
Silk Yarn [Regulation of Production, Supply, Distribution and Sale] Act 1959
which have made it an offence to buy or sell silk cocoons or silk yarn in the open
market, thereby erecting barriers between the silk farmers, reelers and weavers.
Because of the Act the processors [reelers and weavers] have to obtain their raw
material from many producers [farmers and reelers] and by accessing many
markets. This is conducive to neither quality nor efficiency.
4.19 Other States in the country have recognized the need to encourage free market
transactions in the industry. West Bengal has made impressive progress in the
recent past because there are no restrictions on the purchase or sale of cocoons or
yarn. The government of Andhra Pradesh is in the process of setting up a
mechanism which will ensure vertical integration of all levels in the industry.
4.20 The Karnataka Silkworm Seed, Cocoon and Silk Yarn [Regulation of Production,
Supply, Distribution and Sale] Act 1959 had a useful role to play at the time of
enactment when the sericulture industry needed to be nurtured carefully and the
interests of small farmers and reelers had to be protected. However the Act is
now outdated. The restrictive clauses need to be removed and the role of
government in sericulture reviewed if silk industry in the State is not to be
relegated to a backwater.
126
4.21 The present role of government in the development of sericulture in the State is
briefly described below:
1. Government research institutions produce P4 breeder stock
2. These eggs are multiplied in P3 and P2 silk farms and grainages. The P2 cocoons
are processed in P1 grainages to produce P1 disease free layings [dfls] or the
commercial parent stock. The P1 dfls are reared by 53 P1 farms and by seed
farmers in 38 taluks have been identified as seed areas. The seed area farmers
rear P1 dfls to produce P1 cocoons under the supervision of the department.
3. Government pays heavy subsidy for the production of these seed cocoons
although these are produced in far greater quantities than required. Despite this
there is pressure on the government to include more and more taluks in the seed
areas.
4. Licensed seed producers and government grainages purchase the P1 cocoons from
the cocoon markets in the seed areas and produce commercial layings [F1 layings]
5. Farmers purchase the commercial layings from the regulated cocoon markets.
However the cocoon markets are not uniformly popular. Some of the cocoons
markets, such as those at Ramanagaram and Siddlaghatta, are over crowded and
no quality checks are possible while purchasing the cocoons. In addition, because
of the restrictions placed on the purchase of cocoons only in the cocoon markets,
it is difficult for reelers to obtain reeling cocoons in commercially viable lot sizes.
The same problem applies to the purchase and sale of the yarn prepared by the
reelers, which can be bought and sold only in the silk exchanges. The difficulty is
particularly acute in the case of bivoltine cocoons and silks which are produced in
small quantities and get scattered into different cocoons and yarn markets. The
result is that not only do the reelers not get cocoons of a uniform quality in large
enough lots, but the weavers do not get uniform quality of silk yarn in large
127
quantities. For these reasons most of the silk product exporting units located in
the State do not source their silk from within the State. For example, leading
exporters like Himmatsinghka Siede import all their silk from China.
6. The government has imposed licenses at every stage of the industry. Thus
farmers require a license from the government even to grow mulberry and raise
silkworms. Licenses are also required by the rearers, chawki rearers and seed
preparers, for each charaka, for each cottage basin and for each filature basin.
Licenses are required for purchasing cocoons for reeling and by the silk traders.
Much of the time and energy of the department is spent on inspections to ensure
that the licenses are held and renewed by the different stake holders.
4.22 The World Bank projects and the enormous amount which has been spent on the
development of sericulture has resulted in some positive achievements. Some of
them are as follows :
a. Karnataka already produces about 500 tonnes of bivoltine silk annually.
b. Karnataka has more than 150 modern multiend reeling units that can
produce internationally gradable silk yarn.
c. Karnataka has the maximum number of sericulture quality clubs with
progressive sericulturists as members.
d. In recent years a large number of engineers, lawyers and doctors have
taken up sericulture.
e. Mechanization in sericulture has been receiving the special interest of
farmers.
f. The Central Sericultural Research and Training Institute in Mysore has
evolved sturdy bivoltine hybrids for tropical areas, and has also developed
a new mulberry variety called V-1, which is the biggest leaf yielder in the
world.
128
Recommendations
Karnataka is poised for a big leap forward in the area of sericulture provided
the government introduces much needed reforms. The most important of these
is to remove the restrictions with regard to the sale of cocoon and silk yarn and
allow free market operations to come into force. Government should however
continue to play an important role in encouraging the maintenance of quality
and improved standards and in disseminating the spread of technology and
innovation. The following steps are required to be taken :
1. The concept of silk worm seed area should be given up. While P4, P3 and P2
seeds should continue to be produced in government seed farms, the
responsibility of commercial seed production should move towards the private
sector. A Silkworm Seed Regulatory Authority should be set up by the
government to certify the quality of the seed. The Central Silk Board has
already proposed to the Government of India the creation of a National
Silkworms Seed Regulatory Authority.
2. Since sericulture can prosper in the State only if Karnataka can offer large
volumes of silk of uniform quality in adequate lot sizes, it is necessary for the
government to create an enabling environment for the private sector to set up
large integrated silk factories. These silk factories will require to enlist a
required number of mulberry farmers on contract basis to supply the cocoons
directly to them and not through the cocoon market. The silk factories can be
made responsible for remitting the market fee for the cocoons. This model of
direct linkage between the producer and the processor will be similar to that
which is already in place with regard to agricultural and horticultural
commodities.
3. The Karnataka Silkworm Seed, Cocoon and Silk Yarn [Regulation of
Production, Supply, Distribution and Sale] Act 1959 should be amended to
allow direct linkages between the producer and the processor at all stages -
129
graineur and seed cocoon farmer, reeler and farmer and weaver and reeler.
This will help to improve the quality of silk by allowing the market to determine
the pricing for the produce and will allow entry of large scale integrated soil to
silk production units.
4. It is also necessary to lift all restrictions on the movement of cocoons and yarn
into the State or from Karnataka to other States. When silk imports from China
are being permitted, it would be unreasonable to prevent free flow of cocoons
and yarn from all parts of India.
5. All modes of government licensing should be removed. Instead of licensing,
the government should put in place a mechanism for registration of rearers,
reelers and weavers. The registration need not be compulsory. However
registration will enable the government to access the stake holders to give them
technological inputs, extension services and government subsidies. It is
expected that with this changed perception of government’s role, most of the
silkworm rearers and reelers will opt for registration. Fees may be charged by
the department only for services rendered.
6. The cocoon markets and silk exchanges should continue, but in a different
setting. They will be places where small farmers and rearers as well as others
will have a forum for selling their produce. However, the cocoon markets and
silk exchanges need to be modernized. They should serve as centres which
foster quality transactions and which render information and assistance and
not as institutions which stifle free exchange between producers and
purchasers. For example, the cocoon markets and silk exchanges should be
computerized. They should provide information on prevailing market rates.
Quality assessment should be done in a scientific manner. The cocoon markets
and silk exchanges should become places where one can be certain of obtaining
products of good or superior quality.
130
7. New marketing concepts like online buying and selling and a futures market in
cocoon and silk yarn will help farmers and reelers in planning ahead their
production programme. The State government should support the proposal of
the Central Silk Board to set up an All India online trading system for cocoon
and silk yarn.
8. Sericulture should in fact become a thriving agro business, if Karnataka is to
become a producer of world class silk. The Sericulture department should
concentrate on improving the breeder stock and basic stock of seeds, in
modernizing the cocoon markets and silk exchanges and in improvement and
expansion of extension services.
9. Adoption of new technologies by rearers and reelers should be assisted by
government subsidies.
10. The Sericulture department should give up unviable sericulture farms and
grainages and utilize the staff in extension services where there is great need of
capable workers. The sericulture farms which the department does not wish to
retain can be leased on the basis of open tenders to private companies which
intend to set up large integrated silk factories. The grainages could be put to
public use, such as schools and hostels
4.23 Other States in India, for example Andhra Pradesh and Tamil Nadu, have already
commenced setting up two major large scale soil to silk projects based on contract
farming arrangements. Karnataka should take immediate action to change its
policy with regard to the sericulture industry if it is not to be left behind.
Recognizing the need for reform, the State government in Karnataka has prepared
a draft amendment to Section 7 of the Karnataka Silkworm Seed, Cocoon and
Silk Yarn [Regulation of Production, Supply, Distribution and Sale] Act 1959.
The proposed amendment indicates that a person or an organization which has
established more than 250 silk reeling basins with a capacity to produce 200
kilograms of silk in a day may purchase silk worm cocoons outside the cocoon
131
market from contract farmers with prior approval of government in accordance
with the following conditions:
a. “The person or organization shall enter into a contract with the farmers and
such contract shall be approved by government.
b. The rearer will have the option to sell his cocoons either directly to such
person or organization directly or through a cocoon market.
c. The person or organization will have the option to purchase cocoon directly
from the contract farmers or through a cocoon market by participation in open
auction.
d. The person or organization shall furnish accounts relating to purchase of
cocoons outside the market every month before the 5th day of the subsequent
month.
e. The person or organization shall pay a market fee at the rate of two percent on
the value of the cocoons purchased outside the market along with the
statement of accounts.” 4.24 The Commission feels that as a reform measure, this amendment does not go far
enough. It should not be necessary for the contract with the farmer to be
approved by the government. It is not necessary to place a restriction on the
capacity of the silk reeler while permitting him to purchase silk directly from a
contract farmer. It should also not be necessary for the reelers to furnish accounts
to the government relating to purchase of cocoons outside the market every
month. These conditions will lead to harassment and corruption and effectively
suppress any genuine open market transactions. These conditions in the proposed
amendment should be removed and the reelers, whether as individuals or as
organizations, should be permitted to enter into contract with farmers and
purchase cocoons from them without the necessity of obtaining the prior
permission of the government and without the necessity of coming back to the
132
government for the rendering of accounts. The market fee at 2 percent is also on
the higher side, since initially at least the reelers would have some difficulty in
entering into contract agreements with farmers. If big players are to enter the
sericulture industry in Karnataka, the government should have the same
supportive and liberal policy that they have adopted in the case of other industries.
This will help sericulture in Karnataka to prosper and will in the long run increase
the revenues of the government.
SILK FILATURES
4.25 Silk filatures in Karnataka have been under public ownership since 1956. When
the Karnataka Silk Industries Corporation was established in 1980, government
silk filatures at Kanakapura and T-Narasipura were handed over to the
Corporation. The remaining filatures at Kollegal, Mamballi, Santhemarahalli and
Chamarajnagar remained with the government. The establishment of the silk
filatures under the public sector was another effort of the government to protect
the interests of small sericulture farmers. As bulk purchasers of cocoons, filatures
contributed to the stability of cocoon prices and protected sericulturists against
exploitation by unscrupulous private reelers. It was also thought that since silk
yarn produced by the filatures was superior to charaka yarn, filatures will
contribute to the production of better quality of silk fabrics.
4.26 However, in the course of time, the silk filatures, which should have brought in
revenue to the government through their profits, have become a drain on the
exchequer because of their persistent losses. They have incurred losses almost
from the time of inception. The financial losses suffered by the four units under
the department of Sericulture are shown in the following table :
133
Financial losses of Government Silk Filatures
Kollegal Mamballi S.Marahalli Ch.Nagar
1998-99
Total cost of production [Rs.per Kg]
Average selling price [Rs. per Kg]
Loss [Rs.per Kg]
Total loss [Rs. lakhs]
2689
1432
1257
114.89
2418
1407
1011
56.63
2570
1618
952
116.73
2650
1451
1199
112.30
1999-00
Total cost of production [Rs.per Kg]
Average selling price [Rs. per Kg]
Loss [Rs.per Kg]
Total loss [Rs. lakhs]
2600
1253
1347
88.56
2122
1428
694
92.38
2564
1373
1191
118.28
2441
1407
1034
117.38
2000-01
Total cost of production [Rs.per Kg]
Average selling price [Rs. per Kg]
Loss [Rs.per Kg]
Total loss [Rs. lakhs]
2991
1401
1590
146.70
2399
1423
976
107.35
2662
1359
1303
99.66
2599
1418
1181
110.04
134
4.27 It may be seen from the statement that in all the four units under the department of Sericulture, the average selling price for one kilogram of silk yarn is much lower than the cost of production and consequently the units are running under loss. Each unit is making a loss of about Rs. 100 lakhs annually.
4.28 The two units under the Karnataka Silk Industries Coporation have also been working under loss. The silk filature at T.Narasipura suffered a net loss of Rs. 131.49 lakhs in1999-00, Rs. 169.69 lakhs in 2000-01 and Rs. 184.37 lakhs in 2001-02. The silk filature at Kanakapura suffered a net loss of Rs. 175.20 lakhs in 1999-00, Rs. 176.79 in 2000-01 and Rs. 197.01 in 2001-02.
4.29 The government silk filatures prove once again the folly of the government in entering into the area of production in the face of private competition. The major causes for the persisting losses of the government silk filatures are old and obsolete machinery, technical deficiencies of present practices, excess manpower, old and dilapidated buildings, increase in the cost of coal and power charges and the inability of the filatures to compete with private reelers. Under the circumstances, it would appear that the best thing to do would be to close down the filatures. As loss making units they do not serve the purpose for which they were set up. However, there are reasons for continuing at least some of them since most of their workers are from the weaker sections. As a measure of reducing the losses the government has decided to close some of the filatures and merge some of the others and rejuvenate them.
4.30 A team of scientists headed by the Director, CSTRI conducted a technical study of the four filature units at Kollegal, Mamballi, Santhemarahalli and Chamarajanagar and the Silk Twisting and Weaving factory at Mudigundam [Technical report on the functioning of Government Silk Filatures and Government Silk Twisting and Weaving Factory]. The study report contains useful suggestions for the technological upgradation of the filatures which could help to make them profitable concerns. The report has indicated how almost all the activities of the filatures such as stifling, storage, sorting, cooking, reeling, silk skiening and twisting should be improved. The report also makes suggestions for improving the process of cocoon purchase, improving the quality
135
of water used in the filatures for reeling, cost reduction, improvement in the use of machinery and the steps to be taken for full capacity utilization.
4.31 As part of the rejuvenation strategy the filature units at Chamarajanagar and Kollegal, which were difficult to revive, were merged with the Santhemarahalli and Mamballi units respectively. It has also been decided to close the Silk Twisting and Weaving unit at Mudigundam and to redeploy the workers in the units at Santhemarahalli and Mamballi. However, unless this reorganization is followed up by the implementation of the recommendations of the study report the working of the two units that remain will not improve.
4.32 Reorganisation of the filature units under KSIC is also necessary. As per the Government order dated 28-8-2003, it has been decided to close the filature unit at Kanakapura and the Spun Silk Mill at Channapatna. A plan for the revival and diversification of the T-Narsipura silk filature unit has been prepared by Gemini Professional Services Pvt. Ltd. One of the suggestions made in this report is to procure cocoons during the season at a lower price for the entire year with arrangements for proper storage.
Recommendations
Since it is not possible to immediately privatise the government silk filatures because the units are in such a terribly bad shape, the action initiated already to close down some of the filatures, merge others and rejuvenate them should be taken up and implemented expeditiously.
However, if the government removes restrictions on cocoon rearing and reeling as already suggested, it is likely that large private reeling units will be established in the State. Free market competition will take care of the problem of protecting the interest of sericulture farmers. When this happens it will be best to hand over the government silk filatures to the private sector or to close them since it is now accepted that it is not desirable or profitable for the government to engage in production activities which can be easily and more efficiently done by the private sector.
136
137
Annexure-I
Sericulture – Receipts for the period from 1998-99 to 2002-03
[Rs. in lakhs]
Year Market Fee
Farm Receipt
Grainage Receipt
Licence Fee
Other items
Total
1998-1999 1408.754 13.320 882.860 12.838 23.812 2341.494
1999-2000 1221.605 12.294 781.654 12.647 38.158 2066.358
2000-2001 1270.448 42.705 940.472 10.794 67.126 2331.545
2001-2002 1594.794 7.200 461.240 12.338 53.061 2128.633
2002-2003 1228.412 3.597 349.754 18.393 36.778 1636.934
Annexure-II
State Silk Farms Details
Year Leaves harvested [in Kgs]
DFLs brushed [in nos]
Cocoon harvested
[nos. in lakhs]
Income realized
[Rs. in lakhs]
Expenditure
[Rs. in lakhs] 1998-99 759040 73198 182.478 47.534 474.562
1999-00 721780 58128 156.042 39.101 578.228
2000-01 658108 48458 137.743 40.848 573.038
2001-02 653968 41407 133.070 32.923 600.253
2002-03 568186 40568 120.651 23.809 544.394
CHAPTER V
CO-OPERATIVE AUDIT
CHAPTER 5
CO-OPERATIVE AUDIT
Sub: Audit fees of co-operative societies
Introduction
5.1 The department of Co-operative Audit came into existence in the year 1977 on the
basis of the recommendations of the Public Accounts Committee. The objective
in setting up the department was to ensure independent and fair statutory audit of
all the co-operative societies in the State.
5.2 The department is required to conduct the audit of the accounts of all co-operative
institutions at least once in a year, as envisaged under Section 63 of the Karnataka
Co-operative Societies Act 1959. The department collects audit fee from every
co-operative society at rates approved by the government. In addition to
statutory audit, the department can also, under rule 441 of the Karnataka Co-
operative Societies Act 1959, conduct concurrent audit for which they can charge
separate fees.
Terms of reference
5.3 The mandate given to the Commission is to suggest the policy for enhancement
of the audit fees and recovery of the cost of audit.
5.4 The cost of auditing is basically the salary of the officials in the department who
are involved in the task of auditing, along with expenditure on establishments
costs and traveling allowances.
5.5 The sanctioned staff of the department as at the end of 2002 was 1915, of which
1572 are permanent posts. 343 posts are vacant. The work in the department has
141
increased since the total number of co-operative societies for audit has increased
from 27246 in 1995-96 to 31173 in 2002-03. Because of the increase in the
number of co-operative societies, the increase in the number of vacant posts and
increase in the volume of business of the societies, the department has not been
able to audit all the societies at least once in a year as is required to be done. The
percentage of societies audited by the department has declined steeply from 74
percent in 1995-96 to 59 percent in 2001-02. This in turn has reduced the revenue
generated by the department.
Revenue and expenditure of the department
5.6 Audit fees and audit costs collected from co-operative societies form the revenue
of the department. The revenue and expenditure figures of the department for the
last five years is presented in the following table
Revenue and the Expenditure of the department of Co-operative Audit from
1997-98 to 2001-02
Year Revenue Expenditure +Surplus -Defecit
1997-98 947.4 1212.9 -265.5
1998-99 1039.7 1314.5 -274.8
1999-2000 1027.2 1647.3 -620.1
2000-2001 986.3 1513.2 -526.9
2001-2002 1213.9 1614.7 -400.00
5.7 It is seen that the expenditure has always been more than the revenue and that this
deficit amounts to about Rs. 5 crores annually. It may also be noted that there is a
substantial gap between the demand raised and the actual amount collected. The
recovery from the co-operative societies towards fees payable for audit is only
around 65 percent of the demand.
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Audit fee structure
5.8 Prior to the year 2001, the rates for audit fee as fixed by the government, was 15
paise for every one hundred rupees of the working capital or business turn over.
This has been increased subsequently. As per government order dated 17/2/2001
and 16/5/2003, the rates are fixed as follows:
i. 20 paise for every one hundred rupees of the working capital or business
turnover for a co-operative society, whichever is more
ii. Irrespective of the financial position of the society, the minimum audit fee
shall be ;
a. Rs.5000/- for building co-operative societies
b. Rs.20,000/- for a co-operative sugar factories
c. Rs.500/- in respect of co-operative societies other than housing societies,
co-operative sugar factories, spinning mills and primary co-operative
agricultural and rural banks [PCARDBS]
5.9 Several types of co-operative societies are exempted by the government from the
payment of audit fees. They are the following:
1. Student’s Co-operative Societies
2. SC/STs Co-operative Societies
3. Medical Aid Co-operative Societies
4. Primary Fishermans Co-operative Societies
5. Pottery Co-operative Societies
6. Leather Works Co-operative Societies
7. Mat Weavers Co-operative Societies
8. Basket Weavers Co-operative Societies
9. Hand Pounding Co-operative Societies
10. Sports Promotion Co-operative Societies
143
11. Woman Co-operative Societies
12. Co-operative Societies under liquidation
13. Co-operative Societies which are defunet/dormant
14. Co-operative Societies whose members are only Ex-serviceman
15. Washermen’s Co-operative Societies
16. Stone cutter’s Co-operative Societies
17. Barber’s Co-operative Societies
5.10 When a co-operative society avails of the services of auditors under rule 441 of
the Karnataka Co-operative Societies Act 1959 for the conduct of concurrent and
final audit, audit cost in lien of audit fee is recovered on “per diem basis” that is,
audit cost is calculated on the number of days taken by such auditors to assist or
complete the audit, together with traveling and daily allowances.
5.11 Fifteen co-operative institutions have filed a writ petition before the High Court of
Karnataka objecting to the enhancement of the audit fee prescribed by the
government.
5.12 The department of Co-operative Audit has, in the course of audit, reported
approximately 300 cases of misappropriation every year approximating to Rs. 500
lakhs.
5.13 The department has, on 7/2/2003 proposed for enhancement of the audit fee in
order to increase the revenue of the department and to rationalize the audit fee.
The proposed rates are as follows:
144
Sl. No.
Range of Working capital Rates of audit fee leviable
1 Working capital up to Rs. 10 crores
For every 100, 20 ps
2 Working capital of more than Rs.10 crore up to Rs. 50 crores
Rs. 1.5 lakhs + 15 P. for every Rs.100 in excess of Rs. 10 crores
3 Working capital exceeding Rs.50 crore
Rs.6.3 lakhs + 12 P. for every Rs.100 in excess of Rs. 50 crores
4 Primary co-operative agricultural and rural banks [PCARDBS]
75 percent of audit fee calculated at the rate of 20 P. per Rs.100 of loan advanced subject to minimum of audit fee of Rs.30,000/-
5 House building co-operative societies [HBCS]
25 P. per Rs.100 to minimum of Rs. 2000
6 Sugar factories and spinning mills Minimum audit fee leviable is Rs.20,000 for sugar factories and Rs.10,000 for spinning mills.
7. Rs.250 for co-operative societies which do not fall under the above categories
5.14 The details of co-operative societies with their share capital are indicated in
Annexure-1.
5.15 The department has been waging a losing battle to ensure that all the co-operative
societies in the State are audited regularly. As indicated above, the department is
able to audit less than 60 percent of the societies every year. There are several
societies which have not been audited for years together. The remedy, according
to the department, is to fill all the vacant posts. The argument of the department
is that the increase in expenditure will be compensated by the increase in societies
covered under audit and the increased audit fee structure proposed to the
government. However after discussion with the department, with the officials of
the office of the Registrar of Co-operative Societies with representatives of the
145
Institute of Chartered Accountants and with the officers from the office of the
Accountant General, the Commission is of the opinion that it is necessary to
review the role and functions of the department of Co-operative Audit in order to
conduct audit of the co-operative societies in a more efficient and helpful manner.
This cannot be done merely by filling the vacant posts in the department. The
additional expenditure incurred by doing so can never be compensated by
increased revenue since the salaries of government staff will only increase and the
government will have to continue incurring expenditure on them even after
retirement. The need for reforms in co-operative auditing is brought out by the
following points.
a. The expenditure of the department outstripped revenue from Rs.265 lakhs in
1997-98 to Rs. 400 lakhs in 2001-02
b. The percentage of un-audited co-operative societies has increased from 20
percent in 1992-93 to 41 percent in 2001-02.
c. Many co-operative societies are exempted from payment of audit fee.
d. There is no concurrent or performance auditing of co-operative societies.
Only statutory auditing is done by the department without any test auditing.
e. Sixty five percent of the total co-operative societies have an average share
capital of less than Rs. 5 lakh or working capital of Rs. 7.5 lakhs. Auditing of
such small societies by the department consumes most of the time of the audit
staff, placing a heavy burden to the government.
f. Audit reports should be prepared within one or two months immediately after
the end of the financial year. This practice is not followed.
146
g. The auditing of a co-operative society is carried out by the same staff of the
department for over a long period. As a result of this fair auditing of co-
operative societies is not ensured.
h. No co-operative audit report is placed on the floor of the House. Hence co-
operatives are not brought under the scrutiny of the Legislature.
i. The number of co-operative societies refusing to pay the audit fee is
increasing. The refusal to pay the audit fees of the department is amounting
to Rs.116 lakhs.
j. The qualifications prescribed for the appointment of ‘auditors’ is any degree
from a recognized university. This does not ensure scientific auditing of
societies by specialized personnel
k. No fair trial was given for auditing of co-operatives by chartered accountants
in the past. Although the Karnataka Co-operative Societies Act, 1959 had
been amended to permit any co-operative society to engage a chartered
accountant to audit its accounts, the Act was soon amended again, making it
compulsory to have the accounts audited by only the departmental auditors.
The modes of selection of the chartered accountants and the rules governing
their functioning had not been worked out carefully.
5.16 Many co-operative societies have failed because of bad business practices and
corruption, there by leading to loss of public money. The need of the hour is
to strengthen co-operative societies to face competition in the market economy.
This calls for several reform measures. One such measure is to reform co-
operative auditing.
5.17 The Commission is of the opinion that the department of Co-operative Audit
should be a lean and efficient organization which will supervise the audit of co-
147
operative institutions in much the same way that the Accountant General’s office
supervises the audit of public sector undertakings and government departments. It
is also necessary to bring co-operative societies within the purview of the
Legislature since a lot of public money is given to the societies. Co-operative
institutions should be audited by chartered accountants just as in the case of
public sector undertakings and banks. The role of the department of Co-operative
Audit should be :
a. to monitor the auditing of the societies by the chartered accountants in order
to ensure that all co-operative societies are audited according to the time table
drawn up by chartered accountants. Some of the smaller primary agriculture
co-operative societies may be audited even by auditors. The auditors can be
determined at the General Body meeting of the co-operative society.
b. do a test audit every year of all co-operative societies which have a turnover
or working capital above a certain amount and a test check every two years of
the smaller societies.
c. Do a detailed performance audit of a few societies, especially of those with
large turn over or where there is suspicion that funds are being mis-used.
5.18 It will be necessary for the government to lay down rules regarding the selection
of chartered accountants, fees chargeable by the chartered accountants, calendar
for audit by both the chartered accountants and by the department of Co-operative
Audit and other details. The Co-operative Societies Act will also require
amendment.
148
Recommendations
1. Co-operative societies, where the government has shares or has given financial assistance should be brought under the ambit of the supervision of the Legislature
2. Auditing of the accounts of all co-operative societies with share capital of Rs.10 lakhs and above should be entrusted to chartered accountants.
3. The Comptroller and Auditor General’s office calls for applications every year for conducting the audit of public sector undertakings. The state government may use the list of chartered accountants short listed by the Accountant General’s office to do the audit of co-operative societies. This will avoid duplication of work and prevent pressure being brought upon the office of the Registrar of Co-operative Societies with regard to the selection of the chartered accountants. The selected chartered accountants will then have to take up the audit of all the co-operative societies.
4. A calendar has to be prescribed for the audit of the societies as in the case of public sector undertakings. The calendar will include the audit by the chartered accountants as well as the accounts certification or test audit to be done by the department of Co-operative Audit for all societies having a share capital between Rs. 10 and Rs. 50 lakhs annually. In the case of societies with share capital of less than Rs.10 lakhs, the test audit may be done by the department of Co-operative Audit once in two years. However the accounts audited by the chartered accountants or auditors of these societies also have to be sent to the department of Co-operative Audit and the chartered accountants audit should be completed within the time table prescribed.
5. The department of Co-operative Audit will also do a transaction audit or
proprietary audit so as to cover all big societies such as the Apex bank, the
DCC banks and large urban co-operative banks at least once in two years.
Besides this, a detailed performance review of three or four large societies
should be taken up by the department of Co-operative Audit every year.
149
6. The department of Co-operative Audit will therefore do
i. Accounts certification or test audit
ii. Transactions audit or proprietary audit.
iii. Performance review
7. Just as the Committee of Papers laid on the Floor of the House monitors the
completion of the statutory audit of public sector undertakings, in the same
way the government in the department of Co-operation will be required to
send a report to the Legislature on the details of co-operative societies.
8. Major observations regarding mis-appropriation and other matters should
be placed on the floor of the house. This can be discussed by a Legislature
committee similar to the Public Accounts Committee/Estimates Committee.
9. Since the nature of the transactions of co-operative audit is fairly simple as
compared to other financial institutions, the audit fee of the chartered
accountants may be fixed at a lower level than that for commercial banks or
other financial institutions, the rates of which will be based upon the turn
over. The ceiling for the rates will be fixed by the department of Co-
operative Audit and will be revised once in four years.
10. No chartered accountant should be permitted to audit the accounts of a
society for more than four years. Chartered accountants whose work under
test audit by the department is seen to be unsatisfactory should be removed
from the select list of chartered accountants for the audit of co-operative
societies. The audit of the chartered accountants and the test audit and
accounts certification by the department of Co-operative Audit should be
completed by 30th September as in the case of public sector undertakings.
By 30th December the co-operative society has to submit its annual report
along with the auditors report through the department of Co-operation to
the Legislature.
150
11. The Comptroller and Auditor General has set up a study group to determine accounting standards for government departments. The State government has to similarly determine accounting and auditing standards for co-operative societies. Since the department of Co-operative Audit will now work in a supervisory role the quality of the auditors has to be substantially improved. They need intensive training in the accounting and auditing standards to be prescribed by the State government and also an understanding of the functioning of co-operative societies.
12. The department of Co-operative Audit should function as an autonomous
body. It will be renamed as the office of the Auditor General of Co-operatives. The office should be headed by an officer from the Indian Accounts and Audit Services of the rank of Accountant General.
13. The Registrar of Co-operative Societies should exercise his statutory powers to discipline co-operative societies who do not get their accounts audited in time or whose audit reveals serious cases of misappropriation or violation of the Co-operative Societies Act.
14. The government should institute the office of an Ombudsman for cooperative societies with powers to enquire into cases of frauds and irregularities as in the case of commercial banks.
5.19 If these recommendations are accepted and put into practice, it will bring discipline and transparency into the functioning and audit of co-operative societies. It will ensure that all the societies are regularly audited every year. It will also ensure that these audits are subjected to a test check. It will enhance the prestige of the department of Co-operative Audit and make it more responsible for quality auditing and performance appraisal. It will also ensure detailed transaction audit or proprietary audit of the larger societies at least once in two years as well as the detail performance review which will help them to improve their performance. The expenditure will be reduced and the revenue increased since higher fees can be charged for transaction audit and performance review.
151
152
Annexure-I
DEPARTMENT OF CO-OPERATION Rs. in lakhs
Sl. No.
Type of Co-operative Societies
Total No. of
CS
Total Share
Capital
Out of Col.4 quantum of Government share capital
Average share
capital per society
1 2 3 4 5 6 1 2 3 4 5 6
DCC Banks Sugar Factories Spinning Mills (Coop) Urban Banks Coop Industrial Estates PCARD Banks
213920
3089
177
19160137985899
31670575
9053
2112 8640 2221
--- ---
714
912.38353.79294.95102.8263.8951.15
Total 574 80155 13687 1778.997 8
Processing CS Electricity CS
1147
4310230
2080 46
37.8132.86
Total 121 4540 2126 70.669 Women CS 193 2125 300 11.01 Total 193 2125 300 11.0110 11 12 13
Non-Agri. Credit Marketing CS PACS Housing CS
3534351
47391539
299852328
251867712
151 621
3604 318
8.486.635.315.01
Total 10163 65211 4694 25.4414 15 16 17 18 19 20 21 22 23 24 25 26 27
Student Cons CS Irrigation CS Weavers CS Transport CS Consumers CS Milk CS Fisheries CS Industrial CS Women Multi-purpose CS Livestock CS Other CS Labour CS Forest Labourers CS Farming CS
14225361430
16779331473
13691043317
4960207100341
26736981337
13895391248668365100
1000318
23
4 34
224 5
645 240 77
167 132 37
284 9 5 6
1.881.461.321.230.830.580.520.490.350.320.200.150.080.07
Total 20857 10709 1869 9.48 GRAND TOTAL 31908 162740 22676 1895.58
CHAPTER VI
SUMMARY OF RECOMMENDATIONS
CHAPTER 6
SUMMARY OF RECOMMENDATIONS MINOR IRRIGATION 1. Utilisation of potential under minor irrigation:
An indepth study is to be carried out to identify the reasons for the abysmally poor utilization of the potential created and initiation of immediate action to improve the utilisation to acceptable levels.
2. The Commission recommends that all minor irrigation tanks, including those with
ayacuts of between 40 and 2000 hectares which are presently in the State sector, should be handed over to gram panchayat subcommittees constituted under Section61 (A) of the Karnataka Panchayat Raj Act, 1993.
3. Complete administrative reorganization is required to ensure better supervision
of minor irrigation. The department of Minor Irrigation should be abolished and
most of the engineers of the department transferred to the zilla panchayat
divisions and sub-divisions.
4. The gram panchayat subcommittees should be given one time assistance by the
government for the restoration of the tank structure by repair and restoration of
tank bund, sluices, waste weir and main canal. A rough estimate is that these
basic repairs will require approximately Rs. 15, 000 per hectare. This will require
a huge one time investment of approximately Rs. 600 crores.
5. Restoration of tanks should be taken up only after capacity survey,
determination of yield and assessment of costs and benefits.
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6. The water rates for minor irrigation should be 25 percent of the rates for medium
and major irrigation.
7. The State government should make a strong case to the Central government for at
least 50 percent financial assistance to complete basic repairs and restoration of
minor irrigation tanks as well as to construct new tanks in the drought prone
areas of the State. The Commission however reiterates that incurring expenditure
on restoration of tanks or on new tanks is a waste of public money if adequate
funds are not provided every year for the maintenance of the tanks.
8. Watershed development is an integral part of the development and maintenance
of minor irrigation.
9. People’s involvement and participation is essential for effective watershed
development.
10. The Commission recommends formation of watershed Gram Panchayat
Subcommittee (GPSs) under Section 61 (A) of the Karnataka Panchayat Raj Act
1993, with the co-option of representatives of people’s groups such as area
groups and self help groups.
11. The Irrigation Act should be amended to transfer the power of water users’
societies to the gram panchayat subcommittees / consortium of gram panchayats
in case of minor irrigation tank ayacut areas. Similarly, there should be
amendments of Karnataka Panchayat Raj Act 1993 to provide for powers to be
given to gram panchayat subcommittees / consortium of gram panchayats to
undertake all the activities to be entrusted as per recommendations given in this
report.
12. Close monitoring with the help of computers is essential with regard to the works
to be carried out by the gram panchayat subcommittees in the case of both minor
irrigation tanks and watershed development.
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13. While constructing new tanks, thorough field and geo-technical investigations
have to be carried out and plans and estimates drawn up according due
consideration to not merely the irrigation system but also to the command area
development. All this should be completed within a period of one year. The
construction of a project should be completed within a period of one year to avoid
cost and time over run and consequent delay in realising the intended benefits.
14. Private minor lift irrigation using surface waters:
a) Regularization of all cases of private lifts where permission has not been
obtained from government for using surface waters, levying a one time penalty of
Rs. 100 per acre and continuous payment of the annual levy at the rates
recommended in sub-para (b) below.
b) Increase the annual levy on private lifts from the present meager rate of
Rs. 4 per acre (or Rs. 10 per hectares) to at least Rs. 10 per acre ( or Rs. 25 per
hectares).
c) Non-payment of the prescribed levy on such users for a successive period of
three or more years should be treated as an offence under the Irrigation Act,
attracting deterrent punishment.
d) Levy on such users should be collected by the Water Resources department as
it deals with the subject of according permission for such private lifts using
surface waters.
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LABOUR AND EMPLOYMENT
A. Employment
1. The Commission recommends that the inter linkage between farmers and agro
food industry and big business on contract basis should be expanded qualitatively
and quantitatively throughout the State, so that the dormant employment and
income generating potential of this sector could be fully tapped. It is also
recommended that all regulations and bottlenecks which come in the way of such
linkage between the farm and industry be removed
2. The Commission strongly recommends that comprehensive development of
Karnataka’s dry land treatment by watershed technology needs to be supported
fully and suggests that the proposal of full coverage should be considered on top
priority. In addition to the manifold benefits of watershed development, it will
also generate employment and increase the income of the poorest families
3. The Commission has already recommended separately for the full exploitation of
the potential under major, medium and minor irrigation projects and reiterates
that these recommendations should be accepted in toto in the interest of
employment and higher income and wage which will accrue in greater measure to
the people of Karnataka.
4. The Commission recommends that the Animal Husbandry sector which has considerable employment generation potential should be encouraged in greater measure. KMF activities should be extended to north Karnataka with the same intensity as it is done in the south and milk processing units producing export quality products should be established in areas of excess production of milk.
5. The Commission recommends innovative methods of expanding cottage
industries, artisan units and small service centers in rural and urban areas by
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organizing self help groups, who will be financed under various programmes of
government administered by various development corporations as well as by
banks directly. At the same time the Commission recommends that consumption
credit needs of self employed in the weaker sections be met through the working
out of appropriate insurance products for consumption needs like expenses on
health, education, death and marriage. Government should also arrange for skill
development according to changing market trends.
6. In respect of large medium industries the Commission recommends that Karnataka should look beyond IT sector. Now that India is picking up in the manufacturing industry, efforts should be made to establish manufacturing industries in the State. In order that wide spread development takes place the infrastructure needs such as drinking water transport and power need to be taken care of in the already identified growth centers. The development of Karwar port along with the Hubli-Karwar railway line will greatly help in the expansion of industries in northern Karnataka as well as in adjoining areas of Andhra Pradesh.
B. Department of Factories and Boilers
1. The Commission recommends that the State's Safety Institute may confine its work
to formulating course material with the help of departmental officers, experts and
industry managers for different modules and arranging programmes utilizing
engineering colleges in the districts. The Commission also recommends that the
course material prepared for different modules should be made utilitarian to the
industry so that the managements will be interested in sending their employees for
training by paying the course fee, which should be adequate to meet the cost of
conducting programmes as well as preparing the course material.
2. The Central Safety Monitoring Cell needs to continuously update its knowledge
with regard to modern manufacturing processes. The Commission recommends
the conducting of workshops jointly by the department and the Indian Institute of
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Science or other expert body each year on various modules of knowledge needed
to run this cell efficiently. The cell should also be enabled to access the latest
information available in the field by providing it access to relevant scientific
journals.
3. The Commission recommends an optional on boiler manufacture and
management as well as factory safety technology as a paper in BE Mechanical
course.
4. The Commission recommends that inspection report proforma should be prepared
in which information to be secured on all the key components of a factory are
indicated. The compliance of observations made by the inspecting officer should
be watched for implementation.
5. The Commission recommends that all Class I officers of the department should be
permitted to purchase vehicles on bank loan, for which some interest subsidy may
be given by government as also reimbursement of petrol expenses at a reasonable
level.
6. The Commission takes serious note of the fact that such essential items of
inspection kit have not been provided to the inspecting officers, thereby forcing
them to carry out inspections without tools. This effects the credibility of the
inspections. The Commission recommends that the department should purchase
all the inspection tools and equipment required by inspecting officers at all levels
as indicated in this report very expeditiously.
7. Since it is a Tenth Five Year Plan scheme of the department the Commission
recommends that government may examine the merits of the proposal for
establishment of a work environment center and testing laboratory.
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8. The Commission recommends that the inspection officers be assisted to
continually upgrade their skills through workshops, training programmes and
library facilities.
9. The Commission recommends the acceptance of the proposal of e-governance as
suggested by the department with the condition that suitable systems should be
evolved which will enable the department to function effectively.
10. The Commission recommends that the inspection fee across the board be raised
by 50 percent for all items for which fee is charged.
C. Labour
1. The Labour department should negotiate with insurance companies and the postal
department for taking up multi benefit insurance policies for the unorganized
sector which will provide along with life insurance some essential benefits such as
health care, accident relief, education fund, housing loan and temporary
unemployment dole for which the premium could be paid at the nearest post
office. The premium could be as low as Rs. 50 per month (with options to
subscribe higher premium,) in order that a wide segment of the unorganized
sector both from rural and urban areas is covered.
2. The Commission recommends that instead of having a slab system for assessment
of fee payable by each establishment, the system proposed by the department in
which assessment is made on the basis of a formula be accepted. The additional
revenue generated should be given to the department of Women and Child
Development to run residential ‘bridge’ courses for child labourers so as to
enable them to join normal schools thereafter.
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CROP HUSBANDRY A. Agriculture Farms
1. The Agriculture department has graded the farms into categories B, C, D and E in
terms of reducing viability. Only two farms are graded as ‘B’, seven as ‘C’ and
the rest of the forty are ‘E’. The Agriculture department should study the farms in
detail and determine whether they would like to retain any with the department.
This may not be more than one in each agro –climatic zone.
2. The remaining farms should be given on 15 years' lease to private seed
companies on the basis of open tenders. Only those companies which are
registered with the government as seed companies will be eligible to participate
in the tender. The tender document should indicate details of each farm such as
the area, type of soil, irrigation facilities, buildings etc. The lowest amount
acceptable for tender should be specified in the tender document. The lease deed
should be a carefully drafted legal document which should specify the conditions
of the lease. One of the conditions should be that the land should be utilized only
for seed production and research activities. Another condition should be that the
company should make maximum use of the irrigation potential in the land and
also make economic use of water through the use of sprinkler and drip irrigation
techniques.
3. Those farms for which there are no takers at all and which are totally unviable
may be handed over to the Forest department for raising social forestry.
B. Horticulture Farms 1. The department of Horticulture should study the matter carefully and decide
which of the farms they need to retain.
2. The government should provide enough funds for these limited number of farms
so that they may realize fully the purpose for which they were set up. The farms
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could be permitted to retain a part of the income generated by them so as to
encourage them to become self sufficient. The remaining farms should be leased
to horticulture companies on the basis of open tender on a national basis for the
setting up of horticulture based businesses. This will not only bring investment
into the State, but it will help our farmers by training them in the use of improved
technology in the growing of fruits and vegetables and by purchasing the crops
from them. The lease should be given for a maximum period of 15 years. The
department may determine the lowest tender which is acceptable for each farm. It
is suggested that many of the farms which are making nominal profits may also be
given on lease.
3. In addition to leasing the farms on the basis of open tender, the department may
also decide to enter into joint ventures with private companies in improving
certain farms. The land could be the government’s share in the enterprise and the
profits could be shared on an agreed basis.
SERICULTURE AND SILK FILATURES
A. Sericulture Farms
1. The concept of silk worm seed area should be given up. While P4, P3 and P2
seeds should continue to be produced in government seed farms, the responsibility
of commercial seed production should move towards the private sector. A
Silkworm Seed Regulatory Authority should be set up by the government to certify
the quality of the seed. The Central Silk Board has already proposed to the
Government of India the creation of a National Silkworms Seed Regulatory
Authority.
2. Since sericulture can prosper in the State only if Karnataka can offer large
volumes of silk of uniform quality in adequate lot sizes, it is necessary for the
government to create an enabling environment for the private sector to set up
large integrated silk factories. These silk factories will require to enlist a
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required number of mulberry farmers on contract basis to supply the cocoons
directly to them and not through the cocoon market. The silk factories can be
made responsible for remitting the market fee for the cocoons. This model of
direct linkage between the producer and the processor will be similar to that
which is already in place with regard to agricultural and horticultural
commodities.
3. The Karnataka Silkworm Seed, Cocoon and Silk Yarn [Regulation of Production,
Supply, Distribution and Sale] Act 1959 should be amended to allow direct
linkages between the producer and the processor at all stages - graineur and seed
cocoon farmer, reeler and farmer and weaver and reeler. This will help to
improve the quality of silk by allowing the market to determine the pricing for the
produce and will allow entry of large scale integrated soil to silk production
units.
4. It is also necessary to lift all restrictions on the movement of cocoons and yarn
into the State or from Karnataka to other States. When silk imports from China
are being permitted, it would be unreasonable to prevent free flow of cocoons and
yarn from all parts of India.
5. All modes of government licensing should be removed. Instead of licensing, the
government should put in place a mechanism for registration of rearers, reelers
and weavers. The registration need not be compulsory. However registration
will enable the government to access the stake holders to give them technological
inputs, extension services and government subsidies. It is expected that with this
changed perception of government’s role, most of the silkworm rearers and
reelers will opt for registration. Fees may be charged by the department only for
services rendered.
6. The cocoon markets and silk exchanges should continue, but in a different setting.
They will be places where small farmers and rearers as well as others will have a
forum for selling their produce. However, the cocoon markets and silk exchanges
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need to be modernized. They should serve as centres which foster quality
transactions and which render information and assistance and not as institutions
which stifle free exchange between producers and purchasers. For example, the
cocoon markets and silk exchanges should be computerized. They should provide
information on prevailing market rates. Quality assessment should be done in a
scientific manner. The cocoon markets and silk exchanges should become places
where one can be certain of obtaining products of good or superior quality.
7. New marketing concepts like online buying and selling and a futures market in
cocoon and silk yarn will help farmers and reelers in planning ahead their
production programme. The State government should support the proposal of the
Central Silk Board to set up an All India online trading system for cocoon and
silk yarn.
8. Sericulture should in fact become a thriving agro business, if Karnataka is to
become a producer of world class silk. The Sericulture department should
concentrate on improving the breeder stock and basic stock of seeds, in
modernizing the cocoon markets and silk exchanges and in improvement and
expansion of extension services.
9. Adoption of new technologies by rearers and reelers should be assisted by
government subsidies.
10. The Sericulture department should give up unviable sericulture farms and
grainages and utilize the staff in extension services where there is great need of
capable workers. The sericulture farms which the department does not wish to
retain can be leased on the basis of open tenders to private companies which
intend to set up large integrated silk factories. The grainages could be put to
public use, such as schools and hostels
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B. Silk Filatures
1. Since it is not possible to immediately privatise the government silk filatures because the units are in such a terribly bad shape, the action initiated already to close down some of the filatures, merge others and rejuvenate them should be taken up and implemented expeditiously.
2. However, if the government removes restrictions on cocoon rearing and reeling as already suggested, it is likely that large private reeling units will be established in the State. Free market competition will take care of the problem of protecting the interest of sericulture farmers. When this happens it will be best to hand over the government silk filatures to the private sector or to close them since it is now accepted that it is not desirable or profitable for the government to engage in production activities which can be easily and more efficiently done by the private sector.
CO-OPERATIVE AUDIT
1. Co-operative societies, where the government has shares or has given financial assistance should be brought under the ambit of the supervision of the Legislature
2. Auditing of the accounts of all co-operative societies with share capital of Rs.10 lakhs and above should be entrusted to chartered accountants.
3. The Comptroller and Auditor General’s office calls for applications every year for conducting the audit of public sector undertakings. The state government may use the list of chartered accountants short listed by the Accountant General’s office to do the audit of co-operative societies. This will avoid duplication of work and prevent pressure being brought upon the office of the Registrar of Co-operative Societies with regard to the selection of the chartered accountants. The selected chartered accountants will then have to take up the audit of all the co-operative societies.
166
4. A calendar has to be prescribed for the audit of the societies as in the case of public sector undertakings. The calendar will include the audit by the chartered accountants as well as the accounts certification or test audit to be done by the department of Co-operative Audit for all societies having a share capital between Rs. 10 and Rs. 50 lakhs annually. In the case of societies with share capital of less than Rs.10 lakhs, the test audit may be done by the department of Co-operative Audit once in two years. However the accounts audited by the chartered accountants of these societies also have to be sent to the department of Co-operative Audit and the chartered accountants audit should be completed within the time table prescribed.
5. The department of Co-operative Audit will also do a transaction audit or proprietary audit so as to cover all big societies such as the Apex bank, the DCC banks and large urban co-operative banks at least once in two years. Besides this, a detailed performance review of three or four large societies should be taken up by the department of Co-operative Audit every year.
6. The department of Co-operative Audit will therefore do i. Accounts certification or test audit ii. Transactions audit or proprietary audit. iii. Performance review
7. Just as the Committee of Papers laid on the Floor of the House monitors the completion of the statutory audit of public sector undertakings, in the same way the government in the department of Co-operation will be required to send a report to the Legislature on the details of co-operative societies.
8. Major observations regarding mis-appropriation and other matters should be placed on the floor of the house. This can be discussed by a Legislature committee similar to the Public Accounts Committee/Estimates Committee.
9. Since the nature of the transactions of co-operative audit is fairly simple as compared to other financial institutions, the audit fee of the chartered accountants may be fixed at a lower level than that for commercial banks or other financial institutions, the rates of which will be based upon the turn over. The
167
168
ceiling for the rates will be fixed by the department of Co-operative Audit and will be revised once in four years.
10. No chartered accountant should be permitted to audit the accounts of a society for more than four years. Chartered accountants whose work under test audit by the department is seen to be unsatisfactory should be removed from the select list of chartered accountants for the audit of co-operative societies. The audit of the chartered accountants and the test audit and accounts certification by the department of Co-operative Audit should be completed by 30th September as in the case of public sector undertakings. By 30th December the co-operative society has to submit its annual report along with the auditors report through the department of Co-operation to the Legislature.
11. The Comptroller and Auditor General has set up a study group to determine accounting standards for government departments. The State government has to similarly determine accounting and auditing standards for co-operative societies. Since the department of Co-operative Audit will now work in a supervisory role the quality of the auditors has to be substantially improved. They need intensive training in the accounting and auditing standards to be prescribed by the State government and also an understanding of the functioning of co-operative societies.
12. The department of Co-operative Audit should function as an autonomous body. It will be renamed as the office of the Auditor General of Co-operatives. The office should be headed by an officer from the Indian Accounts and Audit Services of the rank of Accountant General.
13. The Registrar of Co-operative Societies should exercise his statutory powers to discipline co-operative societies who do not get their accounts audited in time or whose audit reveals serious cases of misappropriation or violation of the Co-operative Societies Act.
14. The government should institute the office of an Ombudsman for cooperative societies with powers to enquire into cases of frauds and irregularities as in the case of commercial banks.
CHAPTER 7
ACKNOWLEDGEMENTS & REFERENCES
Minor Irrigation
1. Sri. A.K.M. Nayak, IAS, Principal Secretary, Water Resources, GOK
2. Sri. E. Venkataiah, IAS, Secretary Minor Irrigation
3. Sri. T.R. Raghunandan, IAS, Secretary, RDPR
4. Sri. T.M. Vijay Bhaskar, IAS, Commissioner, Watershed Department
5. Sri. G.V. Krishna Rau, IAS, Executive Director, JSYS
6. Sri. Faroque Sheikh, Deputy. Secretary, Revenue Department
7. Sri. K. Balraj, Chief Engineer, Minor Irrigation (North)
8. Sri. H.S. Mahesh, Chief Engineer, Minor Irrigation
9. Sri. H.D. Ganesh, Director of Economics and Statistics
10. Sri. Abdul Basith, Director (PP) Planning Department
11. Sri. M. Jospeh Jayakumar, Joint Director, Minor Irrigation
12. Sri. V. Ramananda Chadga, Executive Engineer (Design) Minor Irrigation
13. Sri. S. Nanjunda Rao, Joint Director, Statistics
References
1. Appraisal Report of the Karnataka Community Based Tank Management Project- March –2002
2. A New Concept for Rejuvenation of Irrigation Tanks- “AMRIT” Model by Sri. BC Angadi
3. Census on Minor Irrigation 2000 – 2001
4. Tank Irrigation in Karnataka, by Sriyuths. G.S. Dikshit, G.R. Kuppuswamy and S.K. Mohan
5. Irrigation Subsidies in Karnataka: A growing constraint for Reforms by K.V. Raju and H.K. Amarnath
6. People’s Institutions Managing Natural Resources in the context of a Watershed Strategy by Aloysius P Fernandez
7. The Andhra Pradesh Farmers Management of Irrigation System Act 1997
171
Labour and Employment
1. Ms. Vatsala Watsa IAS, Secretary, Labour Department
2. Sri. Sanjeev Kumar IAS, Commissioner for Labour
3. Sri. P.N. Srinivasachari IAS, Director of Employment Training
4. Sri. K.G. Krishnappa, Director, Factories & Boilers
5. Sri. Shankar Rao, Director, Manpower & Employment, Planning Department
6. Sri. C.M. Sitimani, Addl. Labour Commissioner
7. Sri. B.S. Ramachandra, Joint Director of Factories II Department of Factories and
Boilers
References
1. McKinsey Report on Economic Performance of India – August 2001
2. Report of the Task Force on Employment Opportunities, Planning Commission- July 2001
3. Report of Special Group on Targeting 10 million Opportunities Per Year, Planning Commission- 2002
Crop Husbandry
1. Sri. Shantanu Consul IAS, Principal Secretary, Agriculture & Horticulture Department
2. Sri. Muniyappa IAS, Secretary Horticulture Department
3. Dr. E.V. Ramana Reddy IAS, Commissioner for Agriculture
4. Dr. G. K. Vasanth Kumar, Director of Horticulture
5. Sri. B.R. Shankar, Joint Director of Agriculture
6. Dr. M. Jayaramaiah, Registrar, University of Agriculture, Bangalore
7. Sri. V. Gopal, Comptroller, University of Agriculture, Bangalore
8. Dr. V.K. Prasanna Shetty, Director of Research, University of Agriculture, Bangalore
9. Sri. M.J. Arun, Assistant Director, Agriculture (Retd.)
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173
Sericulture and Silk Filatures
1. Sri. Ashok M. Dalwai IAS, Secretary, Commerce and Industries
2. Sri. Arvind .R. Jannu, IAS, Commissioner for Sericulture
3. Sri. P. Joy Oommen IAS, Member Secretary, Central Silk Board, Bangalore
4. Sri. P. Vijayan IAS, Managing Director, KSSICL
5. Sri. K.N. Ramadas, Addl. Director, Sericulture
6. Sri. M.S. Jayaram, CAO, Sericulture
7. Sri. Moinuddin, Deputy Director of Sericulture (Plan)
8. Dr. T.H. Somesheker, Director, Central Silk Technology Research Institute
9. Dr. U.D. Bongale, Director, Karnataka State Silk Research Development Institute
10. Dr. R. Govindan, Director, Sericulture College, Chintamani
11. Dr. Benjamin, Director, National Silkworm Seed Project
12. Dr. R. Raghuraman, Divisional Chief, Sericulture, KSSRDI
13. Dr. M.A. Shankar, Chief Scientist, Dryland Agriculture Project, UAS
14. Dr. V.G. Haliyal, Divisional Chief, Silk Technology, KSSRDI
15. Dr. Mallikarjunappa, Divisional Chief, Moriculture, KSSRDI
16. Dr. Hanumappa, Retd. Professor, ISEC, Bangalore
Co-operative Audit
1. Dr. R.G. Nadadur, IAS, former Registrar of Co-operative Societies
2. Sri. T.A. Parthasarathy, Director of Co-operative Audit
3. Sri. A. Nayak , Joint Director of Cooperative Audit
4. Sri. N. Ramakrishnappa, Joint Director Cooperative Audit
The Commission is grateful for the services rendered by Ms. H.S.P. Rani, PA,
K.S.F.C, Bangalore for having assisted the Commission in preparing the report.
