Economic Implications of Groundwater Markets in India

Groundwater is regarded as a major source of irrigation in our agriculture sector. Its potential paved the way for the green revolution in our country and we owe our 1960’s food security to this blue gold. Keeping in mind the necessity of its preservation and its economic use, the author would try to address one of the most key features of India that is trading of this blue gold. The trading happens between farmers in general for increasing the productivity; nonetheless, it is the initial benefit of access which allows this trade to flourish in a phenomenal way. In simpler terms, we call such trading the ‘groundwater markets’. The trading shows a peculiar feature of socio-economic feature of our country especially of the farmers. The trading also forces us to look at our current laws. An economic analysis of this significant yet ignored domain of environment law is taken up where abundant literature review has been done; however, there is hardly any change in the scenario. The author in this paper has simplified the situation with a hypothetical scenario of how big or rich farmers who have access to this blue gold with the use of extraction machines are exploiting the small or the poor farmers. This not only leads to the exploitation of the groundwater but also increase the income gap between the classes. As a conclusion to this governance fallacy, the author has described three models which have their own merits and demerits and could be used to situations with their own specific circumstances