University of California


Gandhi, Vasant P.

Presentation Title
Sustainable Groundwater Management: The Role and Performance of Institutions in India
Indian Institute of Management
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Groundwater has rapidly emerged to occupy a dominant place in India?s agriculture and food security. It has become the main source of growth in irrigation and now contributes over 60 percent of the irrigated area. About 70 percent of India?s food grain production comes from irrigated agriculture in which groundwater now plays a dominant role. Despite this huge significance, groundwater is poorly managed and is heading for a crisis. Overexploited blocks are increasing at an alarming rate of 5.5 percent per year. A major problem is the lack of institutional development. A huge gap exists in institutional arrangements necessary to complement the technological change and demand growth. This would have serious implications for agriculture and poverty alleviation in India. In response to the acute water scarcity and declining water tables, local institutions have developed spontaneously in some area such as Gujarat to manage and use the resource. These include tube-well cooperatives and partnerships in northern districts, and rain water harvesting institutions in western districts. An approach based on new institutional economics and governance theories is developed to examine the nature, function and performance of these institutions. A large number of institutions and their members are surveyed and the data analyzed to identify determinants of performance including addressing scarcity/availability of water, environmental impact, equity of distribution, and economic viability. Derived features such as clear objectives, good interaction, adaptiveness, scale, and compliance, as well as technical, organizational and political rationality are examined through econometric analysis. The results indicate the usefulness of new institutional economics and governance theories in explaining performance on different counts. Objectives being clear to the members, management having expertise, management having authority to adapt the rules and systems, and the institution using its powers to bring compliance are important determinants of performance. The impact on the village as a whole is found to be better when the institution regularly makes and pursues plans towards achievement of its objectives, and the management has the necessary expertise, particularly technical expertise. Important implications emerge for policy and for the design of institutions.

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