Council on Energy, Environment and Water Integrated | International | Independent

Reallocating Water for India’s GrowthSectoral Withdrawals, Water-efficient Agriculture, and Institutional Mechanisms

Vaibhav Chaturvedi, Kangkanika Neog, Sujata Basu, Arunabha Ghosh, Sumit Kumar Gautam, Ishita Jalan
December 2020 | Risks & Adaptation

Suggested Citation: Chaturvedi, Vaibhav, Kangkanika Neog, Sujata Basu, Arunabha Ghosh, Sumit K. Gautam, and Ishita Jalan. 2020. Reallocating Water for India’s Growth: Sectoral Withdrawals, Water-efficient Agriculture, and Institutional Mechanisms. New Delhi: Council on Energy, Environment and Water.


This study quantifies the magnitude of water that could be reallocated from irrigation to other sectors in India without compromising agricultural output. It also recommends a pathway for India’s reallocation strategy. The study attempts to provide a high-level preliminary estimate of the economic costs of inaction if the current water allocation pattern across sectors continues. Further, it stresses that inter-sectoral water transfer must be accompanied by appropriate incentives for water users across sectors along with institutional and regulatory restructuring.


Key Findings

  • In a business-as-usual scenario, total water withdrawal is expected to increase from 949 billion cubic metres (BCM) in 2010 to 1,058 BCM in 2050. The share for agriculture would increase from 77 per cent in 2010 to 81 per cent in 2050.
  • There is significant potential to enhance irrigation water productivity even if an average representative farmer adopts the most water-efficient farmers’ practices in the area. For example, for paddy, there is potential to reduce water consumption per hectare by 25 per cent in Maharashtra, but the potential is even higher – 73 per cent – in Andhra Pradesh.
  • About 20 to 47 per cent of irrigation water could be saved in 2030 and 2050 if low-to-high water-saving irrigation practices are adopted.
  • A high-level estimate of the cost of inaction, explained as the economic impact of failing to enhance the irrigation water productivity and reallocate water to other sectors, would be almost INR 48 trillion (USD 869 billion) in 2030 and INR 138 trillion (USD 2,520 billion) in 2050.
  • Sectoral water reallocation is imperative to achieve the goals of Make in India and Har Ghar Jal.
  • Enhancing irrigation water productivity could significantly reduce the pressure on India’s groundwater resources and realise the irrigation potential.
  • The implications of water pricing policies, water markets, input price subsidies, and minimum support prices need to be analysed to devise effective policies for facilitating irrigation water productivity and sectoral water reallocation.
  • Introducing institutional mechanisms for enhancing irrigation water productivity and water reallocation needs to be prioritised.
  • The enabling factors for a successful reallocation regime include governance, technical, equity, environmental, and economic dimensions.

Key Recommendations

  • Choose a state where water resources competition poses a significant challenge and is ready to experiment with an alternative reallocation regime.
  • Undertake behavioural experiments and economic analyses to understand better what policies and interventions can impact irrigation water productivity in the chosen state.
  • Devise a state-specific reallocation strategy based on existing institutions, enabling environments, and participatory stakeholder engagement.
  • Implement the strategy on a pilot basis in a sub-basin and create a monitoring and evaluation plan to learn from the implementation process.
About 20 to 47 per cent of irrigation water could be saved in 2030 and 2050 if low-to-high water-saving irrigation practices are adopted.

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