economics of on-farm development - Institute for Social and ...

investment In irrigation development induces private farm level investments,
mainly in terms <strong>of</strong> extraction <strong>of</strong> groundwater sources (Dhawan, 1995). While the
former perceives groundwater development as an essential component <strong>of</strong> the
. conjunctive principle', the latter underlies the' complementarity' principle. A
third and most important argument is the logic that groundwater sources act as
. vertical drains' in canal commands and helps preventing the adverse effects <strong>of</strong>
water logging and salinity, thereby arresting the rise <strong>of</strong> water table.
In view <strong>of</strong> the above. there has been greater emphasis on groundwater
development even in irrigation commands and by now, the extent <strong>of</strong> extraction <strong>of</strong>
groundwater sources has reached extensive margin in certain parts, threatening
the sustainability <strong>of</strong> the resource base. The progressive decline in groundwater
table in several parts <strong>of</strong>tlle country has been extensively discussed (Prihar et al.,
1990; Bhatia. 1992; Sivanappan. et al., 1987; Shah, 1993; Dhawan, 1995;
Janakarajan, 1996; Janakarajan and Vaidyanathan. 1998; Vaidyanathan 1999).
A three-pronged approach to regulate groundwater use in India was
suggested by Vaidyanathan (1999). which includes a mix <strong>of</strong> centralised
regulation <strong>of</strong> the groundwater by the government combined with community
management as well as the introduction <strong>of</strong> competitive groundwater markets.
However, the implementation <strong>of</strong> such policies calls for according legal sanction
to private property rights over groundwater and the freedom to trade in the same.
There are also apprehensions regarding the success <strong>of</strong> community management
<strong>of</strong> the resource base, especially in terms <strong>of</strong> sharing the costs and benefits among
the beneficiaries. Cost-effective institutional arrangements are also necessary for
the distribution <strong>of</strong> groundwater corroborated with systematic and continuous
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