Water Wealth: Groundwater Exploitation in Punjab Disincentivises Small Farmers
Context
Punjab’s 2025 – 26 groundwater assessment records an extraction rate of around 152%, indicating that groundwater withdrawal is substantially higher than the sustainable annual availability. Around 72% of the state’s 153 assessed blocks continue to fall under the red or over-exploited category, despite some improvement in the number of over exploited blocks.
Key Highlights
- Punjab’s groundwater crisis is strongly associated with the rice and wheat cropping system. Assured procurement, subsidised electricity and relatively easy access to groundwater encourage the cultivation of water intensive crops.
- Agriculture remains the major consumer of groundwater. The latest assessment estimates groundwater extraction at around 26.32 billion cubic metres in 2025 – 26, significantly exceeding the annual groundwater availability for withdrawal.
- Groundwater depletion has created a distributional challenge. Farmers with greater financial resources can invest in deeper tube wells, whereas marginal farmers may increasingly depend on purchasing water from larger landholders.
- Policies intended to support farmers, such as free or subsidised electricity and assured procurement, can create unintended environmental consequences when combined with water intensive cropping practices.
- Addressing the crisis requires moving beyond restrictions on groundwater extraction towards crop diversification, canal irrigation, micro irrigation, electricity reforms and incentives for water conservation, while safeguarding the livelihood security of small farmers.
Key Concepts
- Rice Wheat Trap: A policy driven agricultural pattern in which procurement, price support, electricity subsidies and irrigation availability encourage the continued cultivation of water intensive rice and wheat.
- Aquifer: A geological formation capable of storing and transmitting groundwater. Excessive extraction can gradually lower the water table.
- Water-Energy-Agriculture Nexus: The interdependence between subsidised energy used for irrigation, groundwater extraction and agricultural production, where changes in one sector influence the sustainability of the others.
Way Forward
Punjab needs to move towards water smart agriculture through crop diversification, expansion of canal and micro irrigation, rationalisation of electricity incentives and direct rewards for groundwater conservation. Special support should also be provided to small and marginal farmers.