Chapter 11. Co-managing electricity and groundwater allocation in Gujarat, India1

This chapter examines efforts to address groundwater depletion in Gujarat, India. This case explores how a scheme to ration electricity for the agricultural sector has reduced groundwater use as well as the cost of electricity subsidies.


Groundwater scarcity and pollution an increasing challenge in India

Groundwater accounts for approximately 60% of agricultural irrigation and 80% of drinking water in India (Cullet, 2014). Close to 60% of Indian states face challenges in terms of groundwater scarcity and/or pollution (Cullet, 2014). In 2004, 28% of India’s blocks (nationally recognised administrative units), showed dangerously high levels of groundwater use, as compared to 4% in 1995 (Planning Commission, 2011). Conversely, there are parts of India that suffer from groundwater excess, also posing challenges to allocation and management (Planning Commission, 2011).

While the Government of India has claimed the right to surface water since the 19th century, groundwater has been controlled by private land owners, making it difficult to regulate and protect (Cullet, 2014; Water Governance Facility, 2013). As the Indian law does not recognise the ownership of groundwater, land owners have never had legal private ownership of groundwater resources, but their unlimited right to abstraction has often been interpreted as de facto ownership (Water Governance Facility, 2013). However, a number of legislative changes have provided state governments with increasing control of groundwater resources. The federal government’s scope to influence groundwater management remains limited, as water is considered a state matter. This was affirmed by the Groundwater Model Bill adopted in 1970, which recognised groundwater as a matter of “local concern”. The model bill gave state governments the right to intervene in the management of the resource in order to protect it, albeit to a limited extent (Kaushik, 2016; Cullet, 2014; Planning Commission, 2011). The model bill was updated in 1996 and 2005 with the latest amendments allowing for the regulation of groundwater development2 in areas notified by the State Ground Water Authority. In 2011, the Model Bill for Conservation, Protection and Regulation of Groundwater was developed, which seeks to include groundwater under the public trust doctrine (Kaushik, 2016). Indian states are encouraged to adopt the 2011 model bill in such a way that it suits the specific conditions and needs of each state, as well as existing institutional and legal framework on a state level (Kaushik, 2016).3 Only a few states have implemented the new model bill (Cullet, 2014).

Groundwater allocation challenges and policy responses: The example of Gujarat

The state of Gujarat, located on the western coast of India, has historically faced considerable challenges in terms of groundwater allocation. Gujarat has a population of 60 million, out of which 57% live in rural areas (Census India, 2011). As of 2008, approximately 45% of the population depended on agriculture for their livelihood (Shah et al., 2008). More than 77% of water for irrigation in Gujarat comes from groundwater resources and due to worsening scarcity of surface water resources, the pressure on groundwater has increased over the last decades. Except for some of its southern districts, Gujarat is one of the most water-stressed states of India (Bala, 2015).

The state authorities of Gujarat have made significant efforts to respond to local groundwater challenges. It has initiated the enactment of the 2005 Model Bill for Groundwater, but this has yet to be fully implemented (Kaushik, 2016). It is also one of very few states that have included groundwater regulation in irrigation legislation. The 2013 Gujarat Irrigation and Drainage Act requires that farmers pay a fee to irrigate land with groundwater within a distance of 200 meters from a canal. The legislation also makes it mandatory for farmers apply for a license from the local canal officers in order to construct a tube well or bore well when the depth exceeds 45 meters (Cullet, 2014; Bala, 2015; Desai, 2013). The enforcement of the 2013 act is contested by farmers across Gujarat, who assert that sinking bore wells is the only option that they have in order to meet their water requirements (Desai, 2013). Moreover, enforcement is challenged by the sheer costs of monitoring over one million wells scattered over the state4 (Parekh, 2014). Another major challenge frequently faced by groundwater authorities in Gujarat is that of extremely strong farmers’ lobby groups (Bala, 2015).

Flat tariffs for electricity to pump groundwater and informal water markets

The decades since 1970s saw a spectacular increase in the use of electrical pumps to abstract groundwater. These increased by 585% during the period 1970-2001 to close to 350 000 pumps5 (Shah et al., 2008). Initially, the Gujarat Electricity Board (GEB) charged farmers using electrical pumps based on their metered consumption of electricity. This scheme soon turned out to have certain disadvantages, such as high transaction costs and growing corruption linked to billing and metering. Moreover, the scheme was highly contested by farmers, who complained about the arbitrary nature of meter readers. Consequently, the GEB replaced it in 1988 by a scheme based on flat electricity tariffs linked to horsepower of pumps. As a result, the marginal cost of electricity consumption fell to zero and tube well owners were still not charged for the groundwater resource itself. This provided them with a strong incentive to sell groundwater to neighbours that did not possess their own wells. A dense informal groundwater market developed, with prices being pushed down by competition among the sellers. This greatly benefitted poor smallholders, who did not possess their own wells, leading to great access to groundwater for smallholder irrigation (Shah and Verma, 2008). As an increased number of farmers gained access to larger quantities of groundwater, agricultural productivity expanded.

Conversely, the flat tariff scheme negatively impacted farmers in the sense that they were obliged to pay for electricity consumption all year long, including during seasons where the use of water for irrigation was minor. For GEB, the flat tariff scheme resulted in declined metering and billing costs, but increasingly high costs of electricity subsidies, resulting from the rising electricity consumption (Shah and Verma, 2008). The flat tariff remained constant while consumption and actual costs rose. In 2000-01, the electricity subsidies made up as much as 56% of the fiscal deficit of Gujarat (Cullet, 2014).

The unsustainable increase in water withdrawals, the increasing consumption of electricity and the growing fiscal deficit were major drawbacks to the flat tariff scheme. GEB attempted to increase the flat tariff, but fell short of doing so because of strong opposition by farmers’ lobby groups (Shah et al., 2008). As groundwater levels dropped, well owners invested in bigger pumps, aggravating the existing problems. The groundwater overdraft was a stark concern already in the mid-1980s, and groundwater depletion assumed the proportions of a crisis in certain areas of Gujarat during the 1990s (Shah et al., 2008) (Figure 11.1).

Figure 11.1. Sharp rise in irrigation from groundwater in Gujarat, 1971-2001

Source: Shah et al., 2008.

During the 1990s, GEB began limiting the number of hours of power supply per day.6 However, unintentionally, this also impacted the power supply for domestic users, as agricultural and domestic power was fed through the same system. As a result, the villages were left with weakened and unpredictable access to electricity (Shah et al., 2008; Shah and Verma, 2008)

The Jyotigram Scheme, 2003-06

Based on scientific evidence and recommendations made by the International Water Management Institute, GEB chose to combine the flat electricity tariffs with the introduction of rationing and real-time co-management of electricity and groundwater for agriculture. The new scheme was named “Jyotigram” – “the light of the village” (Shah et al., 2008). Launched during the period 2003-06, the scheme entailed separating the power supply for agricultural use from that for commercial and residential use, which required an investment of about USD 290 million (Shah et al., 2008). The total rewiring of Gujarat was a complicated process, yet by 2006, 90% of all 18 000 villages in the state were integrated in the scheme (Shah and Verma, 2008). With a functional parallel supply network put in place, it was possible to implement targeted rationing: the non-farming sectors were given access to 24 hours full-voltage, metered power supply seven days a week, while the farmers were provided with 8 hours full-voltage supply per day, at predictable times. The power supply to farmers remained highly subsidised, whereas the supply for non-agricultural use is charged based on metered consumption (Grönwall, 2014).

The Jyotigram scheme brought numerous advantages to the non-agricultural sectors in Gujarat which enjoy continuous access to power at full voltage. Farmers now have improved predictability and strength of power supply. This has allowed them to maintain their irrigation schedules so as to use labour more efficiently, conserve water, and save on pump maintenance costs. Furthermore, the Jyotigram scheme is estimated to have resulted in a 37% reduction in farm power use for tube wells from 2001 to 2006. This allowed for a decrease in aggregate farm power supply, thus a considerable improvement of GEB’s financial viability. The aggregate farm power subsidy fell from USD 788 million in 2001-02 to USD 388 million in 2006-07 (Shah et al., 2008). From having had annual losses of between USD 119 and 550 million in 1999-2003, due to subsidy expenses, GEB ended up gaining a surplus of USD 50 million in 2006, and was considered to have performed the best power management in all of India (Shah et al., 2008).

Further, no decrease in agricultural yield has been observed in Gujarat (Rayfuse and Weifelt, 2013). During the seven years following the implementation of the scheme, agricultural GDP in the state rose by close to 10%, the highest in India, an increase that can be attributed to a broad range of factors (Planning Commission, 2012; CGIAR, 2012).7

While it is impossible to measure exactly the impact of the scheme on groundwater level (Shah et al., 2008), groundwater levels in the north of Gujarat have been rising by an average of four meters annually during recent years, compared to an annual drop of three meters per year before the launch of the scheme (Gupta, 2011). Another study indicates that the drop in water tables has at least slowed, albeit not everywhere across Gujarat (Narula et al., 2011).

However, there are some drawbacks to the scheme. For several farmers, the investment in a tube well was made viable by the fact that they could run it during 18-20 hours per day and sell groundwater on the informal market. The Jyotigram scheme obliged them to end this activity, thus reducing their income. The limitation to water pumping has also negatively impacted farmers who do not possess their own tube wells, as their access to groundwater now comes at a higher cost. Since well-owners can no longer pump unlimited amounts of water, the quantity of water being sold on the informal market is now more restricted, thus more expensive (Shah et al., 2008). Cash sales of pump irrigation water on informal markets have increased by 40-60% since the Jyotigram scheme was implemented, and several poorer farmers, not possessing their own tube wells, have been obliged to reduce their total area of irrigated land (Shah and Verma, 2008).

Lessons learned

The Jyotigram scheme, which has been replicated in at least seven other Indian states, illustrates how integrated policies for electricity and groundwater allocation can have mutual benefits for the conservation of both resources. This reflects the advantages of policy coherence across sectors that affect groundwater allocation (see Health Check #10, Part I). In a context where metered tariffs for electricity were difficult to enforce because of strong opposition, transaction costs and corruption, the combination of a bifurcated power supply system, flat tariffs and rationing appears to be a practical solution.

The scheme has created enhanced predictability in terms of quantity and quality of electricity access for both farmers and non-farmers, resulting in a significant decline in the power consumed by the agricultural sector and cost of related subsidies. As for groundwater, the Jyotigram scheme resulted in decreased consumption, allowing for depletion to slow down. Moreover, tube well owners have experienced declined risk in terms of pump maintenance costs and power shortage. The main drawback to the Jyotigram scheme is its implications for farmers that do not possess their own tube wells; additional policy measures are needed in order to improve their access to groundwater (Grönwall, 2014; CGIAR, 2012).


Bala, R. (2015), “Policies intervention for groundwater governance in Gujarat and politics”, International Research Journal of Social Sciences, Vol. 4/1, pp. 55-58,

Census India (2011), “Gujarat Profile”, (accessed 25 May 2016).

CGIAR (2012), “Getting to grips with India’s groundwater”, CGIAR, (accessed 20 July 2016).

Cullet, P. (2014), “Groundwater law in India: Towards a framework ensuring equitable access and aquifer protection”, Journal of Environmental Law, Vol. 26/1, pp. 55-81.

Desai, D. (2013), “Controversial Gujarat irrigation bill gets Governor’s nod”, The Hindu, (accessed 26 July 2016).

Grönwall, J. (2014), “Power to segregate: improving electricity access and reducing demand in rural India”, Stockholm International Water Institute, Paper 23, (accessed 9 August 2016).

Gupta, R. (2011), “The role of water technology in development: a case study of Gujarat, India”, UN Water, kumar_gupta.pdf.

Kaushik, Y.B. (2016), “Model bill for regulation of groundwater development”, Central Groundwater Board of India, Development.pdf (accessed 21 July 2016).

Narula, K. et al. (2011), “Addressing the water crisis in Gujarat, India”, Columbia Water Center, Earth Institute, Columbia University, (accessed 21 July 2016).

Parekh, N. (2014), “Gujarat Irrigation and Drainage Act: Moving towards regulating groundwater use”, CIPT Sandesh, issue 4, Columbia Water Center and Center for Intenational Projects Trust, (accessed 18 July 2016).

Planning Commission (2012), “Twelfth five year plan (2012-2017): Economic sectors, volume 2”, Planning Commission of India, (accessed 18 July 2016).

Planning Commission (2011), “Draft model bill for the conservation, protection and regulation of groundwater, 2011: Background and rationale”, Planning Commission of India, www.planningcommission. (accessed 18 July 2016).

Rayfuse and Weifelt (eds.) (2013), The Challenge of Food Security: International Policy and Regulatory Frameworks, Edward Elgar Publishing Limited, Cheltenham, UK, and Northampton, US.

Shah, T. et al. (2008), “Groundwater governance through electricity supply management: assessing an innovative intervention in Gujarat, western India”, Agricultural Water Management Vol. 95/11, pp. 1233-1242,

Shah, T. and S. Verma (2008), “Co-management of electricity and groundwater: an assessment of Gujarat’s Jyotirgram scheme”, Economic and Political Weekly, Vol. 43/7, pp. 59-66,

Water Governance Facility (2013), “Groundwater governance in India: Stumbling blocks for law and compliance”, Water Governance Facility Report No. 3, SIWI, Stockholm.


← 1. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

← 2. Regulatory measures could include grant of permits for sinking new bore wells, registration of existing bore well owners, registration of drilling agencies, restrictions on the depth and diameter of bore wells, restriction on purpose of use of groundwater, registration of new users in non-notified areas, adoption of rain harvesting, and penalty of offences (Kaushik, 2016).

← 3. However, the Groundwater Model Bill of 2011 has not formally replaced the 1970/2005 bill and there is no hierarchy between the two bills.

← 4. The number of well owners had grown to more than 1.044 million (Shah et al., 2008).

← 5. Still, there were slightly more diesel pump abstracting groundwater in Gujarat in 2001.

← 6. During the 1980s, the villages in Gujarat had access to 18-20 hours of three-phase electricity per day. This declined to just 10-12 hours per day by 2000 (Shah et al., 2008).

← 7. These include: the promotion of water-saving irrigation technology, mass based water harvesting and groundwater recharge, reform of agricultural marketing institutions, and a revitalised agricultural extension system (Gulati et al., 2009). Rapid adoption of new varieties of crops such as genetically modified cotton varieties, investments in rural roads, as well as favourable monsoons over the last decade, have also contributed to the strong increase in agricultural GDP (Planning Commission, 2012; Gulati et al., 2009).