Water wealth: On groundwater exploitation in Punjab

That Punjab is over-extracting groundwater is not news. According to the 2025-26 Dynamic Groundwater Assessment, its groundwater extraction rate was 152%. While interventions reduced the number of ‘over-exploited’ blocks by five over the last two assessments, 72% of its 153 blocks are in the ‘red zone’, the highest among States. The principal consumer is irrigation for rice and wheat, amounting to nearly 25 billion cubic metres a year in the latest estimate. Data also show that the fraction of observation wells with water below 40 metres in the post-monsoon period grew by two percentage points between 2022 and 2025. What began as a strategy to improve food security eventually yielded a concentrated rice-wheat cropping system, in which assured procurement, subsidised electricity and access to groundwater made high-yield varieties, intensive irrigation and fertilizer use and mechanisation less risky than alternative modes of cultivation. In the same vein, the reluctance of the region’s farmers to pursue other crops due to uncertainties in storage options, prices, processing infrastructure, and supply chains has gone relatively unaddressed. But as the water crisis persists, the wealth gap among farmers is also widening. A recent study in the Economic and Political Weekly noted that while farmers with marginal landholdings use water more efficiently, wealthier farmers are better equipped to access lower water tables as well as draw higher volumes. So, as the water table drops, those unable to afford the requisite tube wells are forced to buy water, transferring their wealth to larger landowners and creating unregulated dependencies. A different study by two members of the same team, published in Discover Sustainability, reported that in Sangrur and Barnala, larger farms earned higher returns but recorded lower groundwater productivity vis-à-vis paddy, than smaller farms. Effectively, groundwater depletion raises the capital required for irrigation, which systematically privileges those farmers with better access to finance.

State governments continue to attempt to address the demand pressure in multiple ways even as the scale continues to overwhelm the resulting gains in efficiency. At this juncture, together with those efforts, the State should also endeavour to protect farmers’ incomes and access to irrigation while rendering the cost of additional extraction prohibitive. The ‘Pani Bachao, Paisa Kamao’ scheme, in which farmers are entitled to cash for every unused kilowatt-hour (for pumping) under a threshold, is already promising, albeit with low enrolment. Broadly, the State should use part of the electricity subsidy bill to directly support smallholder farmers, help collectivise irrigation infrastructure, and/or support farmers’ transition to other crops. When benefits follow the cultivator, including tenants, rather than owners of the land or pumps, welfare can subsidise access to water rather than groundwater extraction.