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The execution of CBA

The less stringent design and narrow scope of CBA led to a shrinking of the role of evidence and created space for vested interests to penetrate the tool execution process. In the absence of the criterion of rate of return, there remains no accountability on project implementers to ensure that proposed benefits have accrued. No accounting procedures are required for monitoring the rate of return. Thus, the less stringent design of CBA adopted for dam appraisal and approval has made it liable to political manipulation or distortion (Iyer 2003), either direct or indirect.

One of the common manipulations while executing CBA is to understate the costs and overstate the benefits by exploiting the gaps and uncertainties that prevail in calculating future agricultural prices or costs. Here, calculations are not done as meticulously as they could be, so as not to render the project unviable. There have been instances where too many projects get cleared in a single meeting of the reviewers of CBAs of particular projects (Iyer 2003). There are cases in which the project costs stated during the appraisal have been revised to a very large extent after a project has been approved (Pallavi 2012). There is no system for fresh appraisal of projects after such cost escalations. This has fuelled allegations of corruption against Ministers in the Water and Resources Department (WRD).

There are pressures on government engineers to select sites for dam projects such that the political constituency of the particular political leader gets the highest benefits, irrespective of the results of the CBA. This in turn would strengthen the political domination of the leader in question. The bureaucrats and the government engineers have to yield to the pressure and select sites that are politically favourable for the leader.1 Thus, vested interests prevail over evidence in such cases.

The design of the CBA and its execution is a closed-door process. The policy formulation venue is controlled by government bureaucrats and political leaders. There is no participation of stakeholders, nor is consideration given to alternative water management options to the dam project, such as small-scale watershed conservation and development. This has been the major concern raised by various social movements opposing dam projects on the basis of negative social and environmental impacts.

The outcomes of CBA

Making the criteria for evaluation relatively lax has made it possible for government to undertake dam projects at a very large scale. This activity has fuelled the growth in large-scale irrigated cash crops and agro-industrialization (Singh 1997), creating deep-rooted inequities between upstream and downstream communities. It became the central point of argument for various social movements demanding justice for the people who lost their lands and livelihood resources such as forests and river flows.

The second most important aspect of inequitable benefits is related to the huge capital investments made through public funds. The policy of building dams has received excessive focus from government at the cost of attention to other welfare efforts, especially those required for drought-prone regions and dry-land farmers. For example, irrigated agriculture in the plains has benefitted at the cost of lower budget allocation to development of the rain-fed and drought-prone regions. Water meant for the benefit of farmers in the plains is now being reallocated for urban-industrial growth (as discussed further below). This shows that there has been an implicit political process that has facilitated building of such dams for the benefit of only selected sections of society. In other words, the way in which CBA has been used within the government-led policy venue has played a vital role in the inequitable distribution of benefits.

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