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Exploring The Potential Of Water Rights And Energy Pricing For Sustainable Use Of Groundwater For Irrigation In India

World Water Congress 2015 Edinburgh Scotland
15. Water law
Author(s): Nitin Bassi

Institute for Resource Analysis and Policy [IRAP]1

Keyword(s): Sub-theme 15: Water law,




In India, groundwater has become a mainstay of rural economy supporting agricultural development and providing food security to several millions of people. Following diffusion of green revolution technology in late 1960's, the irrigated cropland using groundwater has expanded rapidly with farmers making extensive and intensive use of well water for irrigation. Presently in India, groundwater nearly sustains 60 per cent of the net irrigated area and about 2/3rd of irrigated food production depends on wells. However, of late it has thrown many governance and management challenges as overdraft of groundwater has resulted in water scarcity across many semi-arid and arid regions. In this backdrop, this paper analyse the extent of groundwater use in India, various existing institutional arrangements for groundwater management, and alternative approaches and policy instruments in promoting sustainable use of groundwater for irrigation.



The methodology involved an analytical review of the measures to promote sustainable groundwater use in agriculture in India, as analyzed by various scholars. In addition, various existing regulations and popular approaches for managing groundwater demand in agriculture were analysed for their outcomes. The specific measures studied are: tradable property rights in groundwater; and pro rata pricing of electricity for irrigation use. Probable approach for regions with different water endowments was discussed. Secondary information on groundwater development, energy consumption and subsidy in agriculture was compiled from various government publications.

Results and Discussion

Well irrigation in India has increased steadily and surpassed canal irrigation in the early 1970's. Exponential growth in energized irrigation was noticed after mid-1960s. This is attributed to: 1] government programs to promote private well irrigation, supported by soft loans to farmers for wells and pumps and rural electrification; 2] the general shift to a flat rate electricity tariff for agricultural use in most states; and 3] diesel subsidy. However, such ambitious interventions led to over-dependence and overuse of groundwater for irrigation in many parts of the country. This resulted in declining groundwater level, reduction in supply, saline water encroachment, drying of the spring and shallow aquifers, increased cost of lifting, reduction in free flow and even local subsidence at some places. Absence of clear ownership rights in groundwater also resulted in its excessive use. In several regions, farmers kept on excavating deeper wells and drilling deeper bore wells in order to have more water for irrigation.

Analyses suggest that most of the direct and indirect measures for groundwater management in India which include artificial recharge in areas facing problems of overdraft; direct regulation of groundwater abstraction; indirect regulations through control of well financing and other leverages; and local management of groundwater by user groups have met with little success. Moreover, the 1992 Model Groundwater Bill, which advocates well permits, water metering and withdrawal limits, has not been properly adopted by any State so far. But of late, direct institutional interventions such as establishment of water rights and effective enforcement of legislations, and indirect institutional instruments such as energy rationing and pro rata electricity pricing, for managing groundwater demand are being increasingly advocated.

Various research studies indicate that a formal system of water rights can mitigate the inequity in groundwater access and can also promote its sustainable use. Further, to make effective use of groundwater, these rights have to be tradable. Empirical studies on the functioning of groundwater irrigation institutions in north Gujarat show that under a system of fixed volumetric water use rights, the users take into account the highest value of water use and provides them with incentive for more efficient use and reallocation of surplus water to a higher valued use.

Also, energy pricing is important in developing economies like India where energy subsidies to agriculture is estimated to be in the range of USD 1.9 billion and USD 6.5 billion per year. Though it was started as a pro-poor policy initiative, it has already turned into a pro-rich policy by allowing resource rich farmers to appropriate groundwater at a very low cost. A field research study undertaken in Madhya Pradesh confirmed that it is actually small and marginal farmers who have been affected most by the subsidized power driven groundwater over-exploitation as they have limited resources and access to groundwater. Further, the empirical studies show that the introduction of consumption-based pricing of electricity and an increase in unit charges, if combined with improvement in the quality of power supply, will lead to greater agricultural income and a reduction in use of groundwater, along with improved efficiency of water use in physical and economic terms.


Enforcement of private and tradable property rights in groundwater can together bring about a significant increase in farm outputs, with a reduction in the aggregate demand for water in agriculture. It will also bring about more equitable access to and control over groundwater for food production and ensure household-level food security. This has to be complemented by the pro rata pricing of electricity with improved quality and reliability of the supplied power. Even when the electricity supply is restricted, a flat-rate tariff for agricultural groundwater pumping can do little to control groundwater and energy use in agriculture. Metering and pro rata pricing of electricity has to receive priority in naturally water-scarce western and peninsular India which also experience groundwater overdraft. In the groundwater-abundant eastern regions of India, however, the pricing structure in the farming sector should be designed in such a way that it encourages greater use of groundwater. However, in such areas there is a limit to agricultural growth as arable land is scarce.

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