A Grave Concern: Water-Intensive Crops and Subsidized Electricity Amplifying Groundwater Depletion in India

Harish Sahu and Kalandi Charan Pradhan ()
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Harish Sahu: Discipline of Economics, School of Humanities and Social Sciences, IIT Indore Simrol, Khandwa Road, Indore, Madhya Pradesh, India
Kalandi Charan Pradhan: Discipline of Economics, School of Humanities and Social Sciences, IIT Indore Simrol, Khandwa Road, Indore, Madhya Pradesh, India

Water Economics and Policy (WEP), 2024, vol. 10, issue 02, 1-34

Abstract: This study investigates the consequences of agricultural activities on groundwater depletion, with a specific focus on the overproduction of water-intensive crops. Addressing this existing research gap, this study challenges the prevailing notion that groundwater depletion reduces agricultural activity. Instead, our study reveals a significant relationship between intensified cropping practices, particularly the production of water-intensive crops (Paddy, Sugarcane and Wheat) and the depletion of groundwater. Further, we identify how subsidized electricity helps to accelerate groundwater depletion. Therefore, we use variables related to groundwater and agricultural practices for the period 2004–2020. In doing so, we find that the Northern states of India are most vulnerable in terms of groundwater depletion (PNB: 59.92, SGD: 106.3), followed by southern, central, western, eastern and northeastern states. Additionally, the regression results suggest that our main variables, magnitude of electricity consumption in agriculture and irrigation intensity of water-intensive crops, have a positive and significant impact on groundwater depletion. In fact, our study found that other variables such as cropping intensity (CI), state population (SP), agriculture credit (AC) and total electric pumps (TP) are also significant and positively associated with groundwater depletion while the magnitude of annual rainfall (AR) shows a negative impact on groundwater depletion. Based on the findings, this study presents an alternative perspective that underscores the contribution of ineffective government policies in regulating subsidize electricity and the cultivation of water-intensive crops, leading to the exploitation of groundwater resources in Indian states with regional variations. These findings emphasize the critical and immediate need for effective regulations on the production of water-intensive crops to address this pressing issue.

Keywords: Groundwater depletion; agricultural practices; water-intensive crops; subsidized electricity; Indian states; generalized least square regression (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S2382624X24500012

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