India will spend 500 billion rupees ($7.9 billion) over five years to expand irrigation as it seeks to help farmers improve crop yields and feed the nation’s 1.25 billion people.
The government is also seeking to improve the efficiency of farm water use, adopt water saving technologies and recharge aquifers, Finance Minister Arun Jaitley told reporters in New Delhi Thursday.
Expanding irrigation is critical to boosting farm output in the world’s second most populous nation where growers depend on rain to water more than half of the cultivable land. India is the world’s top importer of palm oil, biggest consumer of sugar and second-biggest user of rice and wheat.
“If you have irrigation, the yield goes up dramatically and farmers are able to take multiple crops in a year,” Prerana Desai, vice president for research at Edelweiss Integrated Commodity Management Ltd. said by phone in Mumbai on Thursday. “Irrigation is a kind a medicine that can cure many ills.”
The government’s plan may benefit irrigation companies and water pump makers. Shares of Jain Irrigation Systems Ltd., an irrigation-equipment maker, climbed 2.4 percent to 71.2 rupees in Mumbai trading Thursday, the highest price in four months. Yuken India Ltd., a pump maker, rose 5.9 percent to 263.5 rupees, the biggest jump since May 11.
The cabinet Wednesday approved a plan that includes an expenditure of 53 billion rupees to add 600,000 hectares (1.48 million acres) to land under irrigation in the fiscal year that began April 1, Farm Secretary Siraj Hussain told reporters alongside Jaitley.
Farmers depend on the monsoon, which accounts for more than 70 percent of rainfall, to grow crops, generate hydro-electricity and supply drinking water. The India Meteorological Department has forecast El Nino will curb this year’s monsoon rains to 88 percent of average for the first back-to-back shortfall in three decades.