An evaluation of groundwater institutions in India: a property rights perspective


Groundwater governance has become an intractable policy issue, which has many implications for the living standards and well-being of millions of rural poor in South Asia. Groundwater governance is complex as it is influenced by various hydrogeological, sociopolitical and socioeconomic factors. Unregulated groundwater extraction rates in South Asia have depleted the aquifers causing a raft of socioeconomic, environmental and human health problems. This paper analyzes de facto rights in groundwater markets and other emerging ‘groundwater-sharing institutional arrangements’ in India. Using a multi-dimensional property rights model, the paper decomposes de facto groundwater rights while drawing insights and broad policy lessons. The findings indicate that there is much scope for enhancing the ‘small group groundwater sharing’ governed by social regulatory measures. Moreover, distortionary subsidies for agriculture in general and groundwater development, in particular, have had an adverse impact of the resource use and merit further attention.

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Fig. 1

Adapted from Scott (1989)

Fig. 2

Source: Modified from Shah (2009b, p. 37)

Fig. 3


  1. 1.

    The terms ‘Indian subcontinent’ and ‘subcontinent’ are used interchangeably in this paper.

  2. 2.

    Farming systems, saltwater intrusions and dumping of pollutants and waste also exert pressure on aquifers.

  3. 3.

    The distinct asymmetry in groundwater knowledge with regard to institutional and user perspectives has been highlighted by scholars (Mukherji and Shah 2005).

  4. 4.

    A comprehensive discussion on various property rights approaches is beyond the scope of this paper.

  5. 5.

    For the present analysis, we will resort to a qualitative analysis of each dimension.

  6. 6.

    See Shah (2009b) for a comprehensive discussion of groundwater governance in South Asia.

  7. 7.

    A review of higher-order groundwater governance arrangements in South Asia is beyond the scope of this paper.

  8. 8.

    Though difficult in practice, the merits of establishing tradable property rights have been widely published (Rosegrant and Gazmuri 1994).

  9. 9.

    The type of crop grown, whether it is water-intensive paddy, a perennial crop or cash crop, also has a bearing on the groundwater use intensity.

  10. 10.

    The term refers to a set of techniques ranging from community-built and managed structures (check dams) to trap surface water to aquifer storage and recovery (ASR) systems such as groundwater replenishment practiced in advanced countries.

  11. 11.

    This is roughly analogous to the stage of ‘cooperative gaming’ discussed in Chapter 6 (Wells and Institutions) of ‘Taming the Anarchy’ (Shah 2009b).

  12. 12.

    The number of farmers sharing wells has increased from 8 in 2004 to 78 in 2011 (Reddy et al. 2014).

  13. 13.

    Perhaps, the only exception of Shah (2014a) in which he proposed a three-staged policy reform approach to manage groundwater sustainably.


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The principle author gratefully acknowledges the support provided by Dr. Peter McCornick (then Deputy Director General of International Water Management Institute), Water for Food Daugherty Global Institute, University of Nebraska, USA, and Dr. Madar Samad, IWMI, Sri Lanka, in conducting this research.

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Ananda, J., Aheeyar, M. An evaluation of groundwater institutions in India: a property rights perspective. Environ Dev Sustain 22, 5731–5749 (2020).

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  • Governance
  • Markets
  • Water sharing
  • Social regulation
  • Transaction costs
  • South Asia

JEL Classification

  • D23
  • Q22
  • Q25
  • Q15
  • D62
  • H41