Irrigation is a state subject and irrigation projects are formulated, executed and funded by the State Governments themselves from their own resources. Central assistance is released in the form of block loans and grants not tied to any sector of development or project. A large number of major and medium irrigation projects in the country are languishing due to various reasons, the most important of them being inadequate provision of funds by the concerned State Governments. As a result, large amount of funds spent on these projects are locked up and the benefits envisaged at the time of formulation of project reports could not be achieved. This is a cause for concern to the nation and initiative is required at the national level to remedy the situation. Since the irrigation projects are capital intensive, and states with limited resources at their disposal find themselves unable to meet the desired fund demands of all the projects, the implementation of these projects get delayed.
Keeping the above in view, Central Govt., during 1996-97, launched an Accelerated Irrigation Benefits Programme (AIBP) to provide Central Loan Assistance (CLA) to major/medium irrigation projects in the country, with the objective to accelerate the implementation of those projects which were beyond resource capability of the states or were in advanced stage of completion. While selecting the projects, special emphasis was to be given to Pre-fifth and Fifth Plan projects. Priorities were also given to those projects which were benefiting Tribal and Drought Prone Areas. However, under the revised AIBP Guidelines from the year 1999-2000 onwards, Central Loan Assistance under AIBP could also be extended to minor surface irrigation projects of special category states (N.E. States & Hilly States of H. P., Sikkim, J&K, Uttaranchal and projects benefiting KBK districts of Orissa).