Watershed development project justification by economic evaluation: a case study of Kachhighati Watershed in Aurangabad District, Maharashtra

It is essential to study the economical impact of watershed development project on the people in a watershed for its justification based on the huge investments made in it by various government and non-government organisations (NGOs). In the present study, the economical impact of the Kachhighati Watershed development project executed during 1996–2000 is analysed using tools like cost–benefit analysis (CBA), present value (PV) and sensitivity analysis. Kachhighati Watershed is one of the micro watersheds of the Godavari Basin located in Aurangabad District of Maharashtra State, India. The watershed development project was implemented by an NGO named Dilasa Janvikas Pradhikaran. The benefit–cost (BC) ratio of the Kachhighati Watershed development project estimated based on the total present value of costs (TPVC) and the total present value of benefits (TPVB) is calculated as 7.1658, which is more than 1. Hence it is ascertain that the project is cost beneficial. Also the average annual BC ratio of the Kachhighati Watershed development project based on PVs during the first 5-year block period (1997–2001) is 3.1397, whereas that in the second 5-year block period (2002–2006) after the implementation of project is 5.2870, which also ascertains the economic appraisal of the people living in the watershed. In the present paper, the BC ratio of the entire project life, 5-year block period and individual year is estimated based on the PVs and followed by sensitivity analysis. This type of economic analysis on various time scales is absent in earlier work, and this is the new contribution by the present paper. The results of the study show usefulness of the watershed development project for appraisal of the economic status of the people in the watershed. Economic evaluation as a tool is found effective for the financial validation of watershed projects.