This document discusses the institutional changes to watershed development programmes in India over time. It outlines the watershed concept and different classifications of watershed size. It then describes the various government watershed development programmes established since the 1970s and the shifting institutional frameworks, moving from a more centralized top-down structure to one involving more local participation through programs involving PRIs and community institutions. Theories of institutional change and the mechanism design theory are discussed in relation to designing rules and incentives to address issues like asymmetric information and collective action problems among economic agents in watershed programmes.

1. Institutional Changes of
Watershed Development
12/16/2014
Programmes - India
Archana Raghavan Sathyan
PhD student

2. Outline
• Introduction
• Watershed concept
• Methodology-Theories
• Institutional arrangements
• Conclusion
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3. No Food!!!?
1 billion
No place to
sleep!
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4. Not even a single
drop to drink!!!!
3/4th
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5. World population
Increased three times
Human water
consumption
Increased six times
3
6

6. Watershed
• ‘Wasserscheide’(German) -‘Water divide’
‘A topographically delineated
area that is drained to a particular
point by a stream system’ (Dixon, 1994)
• Natural boundary
• A stream/channel/water body
• Outlet
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7. Main stream
Outlet
12/16/2014 Source: fergusonfoundation.org 7

8. Major drainage line in
the watershed
Common outlet
point of the
watershed
Outline of a watershed
Drainage area of the watershed
12/16/2014 Source: Own compilation 8

9. Classification of watershed
(size/scale)
• Mini Watershed - 100 ha
• Micro Watershed - 500 ha
•Sub Micro Watershed - 2500 ha
•Milli Watershed - 5000 ha
•Major Watershed - 10000 ha
•Drainage basin - >10000 ha Source: MoRD, GoI 9

10. Rain fed area
• 68% of the Total Cropped Area
• 55% of Agricultural Production
(Planning Commission, 2012)
Livelihood to
480 million
people
•29 states
•7 UTs
•655 districts
•256000 villages
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11. 3-Pong approach
Watershed
Management
Natural Resource
Management
Production system
Livelihood support
•Soil
•Water
•Biomass •Area
•Productivity
•Income generation
•Marketing
Source: Own compilation
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12. Bunds
Check dams
Dykes Geo-textiles
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13. Farm pond
1.Store water
2.Reduce soil erosion
3.Increase ground water
recharge
Retaining wall
1. Protect river banks
2.Reduce soil erosion
3. Increase water
recharge
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14. Recharge well
Roof water
harvesting
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15. Production system
Livelihood Support System
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16. Institutions
• Institutions are the constraints that human
beings impose on human interaction. They
constitute formal rules and informal
constraints (North, 1990)
2 kinds
• 1. Formal- State enacted e.g: Constitutions,
common law etc
• 2. Informal-Unwritten rules & norms (Schmid, 2004)
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17. Table No 1: Chronology of various government WDP in India
Sl. No Year Programme Institution Objective
1 1973-74 DPAP MoRD Economic development of drought
prone areas through soil and
water conservation measures
2 1977-78 DDP MoRD Minimise the adverse effect of
drought and deforestation through
reforestation
3 1989-90 IWDP MoRD Regeneration of degraded forest
land through soil and water
conservation measures
4 1990-91 NWDPRA MoA Sustainable NRM - Agricultural
production, restore ecological
balance, generate employment
5 2008-till
date
IWMP MoRD ‘Watershed plus concept’
Source: 12/16/2014 Ministry of Rural Development, Govt. of India. 17

18. Theories of Institutional change
• Institutions are not static, but dynamic!
• Actors seek distributional advantage through
bargaining- access and ownership of actors
to resources (Knight,1992)
• Either by themselves or lobbying government
(Libecap, 1989)
• Design new rules consciously to solve
collective action dilemma (Ostrom, 1998)
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19. Mechanism Design Theory
(Hurwicz, Maskin, Myersen)
The Mechanism Design Theory
emphasize the problem faced by a
principal/planner (Government) in designing
a ‘mechanism’ by which a set of agents with
productive capacities or consumption needs
will interact with one another to yield resource
allocation outcomes (Hurwicz, 1960)
•Individual preferences are not visible (Ananda, 2013)
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20. Contd…
• ‘Mechanism’ - Institutions and rules of the game
• ‘Design’ - New situation with flexibility
• Asymmetric information flow – Technology,
productive capacity and agent's preferences
• Incentive compatibility problem - Lack of
incentives for economic agents
• Revelation principle (Myerson, 1979) - Calculating the
most efficient rule for the game to extract private
information.
• Aim - Efficient allocation of resources within
information gap
(Hurwicz, 1960)
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21. Figure 2: Institutional framework of watershed programmes before 2001
Central Watershed Programme Implementation and Review
Committee
State level Watershed Programme
Implementation and Review Committee
State Dept of Rural Development
District Rural Development Agency
Multi Disciplinary Teams (MDTs)
WDT
Panchayath
District
Watershed Committee
(WC)
PIA
WUG WUG WUG
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21
State

22. 12/16/2014
Fragile
ecosystem
500million/yr
(Ananda, 2013)
Continued
soil
erosion

23. Figure 3: Institutional framework after ‘Common Guidelines’ (2008)
Role Institution Structure
NRAA
Nodal Agency
SLNA
WCDC
PIA
WDT
WC
MoRD
Multidisciplinary experts-
Agriculture, water management
Chairperson, CEO, NRAA
members, GWB, Dept Experts
Project Manager & subject matter
specialists
Govt .dept, NGOs, voluntary
organisations, PRIs
4 member team
Strategic planning, National
Data Centre
Fund facilitation , allocation
Evaluation
Sanction of WSD
Approve PIA, M&E
Identify PIA
Capacity building
Technical support,
M&E
Guidance, Resource
development plans &
CPR management
Carryout WSD activities
Keep records
SHGs UGs
11 members
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24. WD Institutions & MDT
• Planner (Government)-Top-down/ Centralised
 Public involvement in designing is weak
 High technical capacity to process data (so data
cells at the top)
 Equipped to deal externalities, increasing returns…
• Decentralised system- communication & information
processing cost less (PRIs –Key actors) (Ananda, 2013)
• PIAs - selected by DWCU (one superior line of
command)
12/16/2014 (Mookherjee, 2005) 24

25. Contd….
• Economic agents – ‘Landholders’ hide benefit &
actual cost - never disclose true information!!!!
(provided incentives)
• Incentives incompatibility problem –
 WD works - 50%
 Livelihood activities - 10%
 Microenterprises -13%
• Revelation principle gives a weak preference to
Centralised system (Myerson, 1979)
• Design optimal contracts -better communication &
governance multiple scales with less transaction cost
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26. Conclusion
• Failure - Equity & inclusion of marginalised
population
• Spill over effects & coordination across scale-magnitude
(upstream and down streams must be
ascertained)
• Farmers show little enthusiasm - High initial
investments and maintainance cost (incentives-not
match with real cost)
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26
(Gandhi & Crase, 2012)
(Ananda, 2013)

27. Contd….
•Information needs - Present situation,
expected damages & threatening processes
of watershed (PRIs less time)
•Less transparency in PIA & village selection
•Self interest and political economy of the
governments and organisations
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28. Thank
you 12/16/2014 28