During the eighties decade, there was a growing realization about the deteriorating financial performance of the irrigation sector in India. Irrigation being one of the basic inputs in the agricultural development of India, its sub-optimal performance, both physical and financial, has given rise to a lot of concern. Aggravating the situation is the fact that benefits from surface irrigation schemes are not commensurate with the massive amounts of capital that have gone into the development of this huge network of canals.

This paper studies the working expenditure and the cost recovery aspect of the major and medium surface irrigation schemes in India, with its regional and state level dimensions. The analysis indicates that the recovery ratio have been low and declining, with the situation becoming particularly serious in the eighties decade. At the end, the paper suggests the need for some institutional changes, besides water rates, etc., in order to bring about better maintenance and operate the systems at optimal levels.