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Negative Impacts of Emerging Informal Groundwater Markets in Peninsular India: Reduced Local Food Security and Unemployment

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  • H. Diwakara

    (School of International Business, University of South Australia, Adelaide, Australia)

  • N. Nagaraj

    (Department of Agricultural Economics, University of Agricultural Sciences, Bangalore, India)

Abstract

In peninsular India, water remains an extremely critical and valuable resource because of its scarcity. Being a semiarid region, demand for irrigation water competes with increasing demands from other sectors such as domestic and industrial uses. This paper analyses the impact of groundwater transfer from rural to urban areas on local food security and employment. We argue that groundwater trading from peri-urban to urban centres has led to ‘overdraft of groundwater,’ inflicting damage to the local economy such as unemployment, out-migration of labourers, and local food insecurity. Based on the results, we propose some policy measures to regulate groundwater extraction and use via water allocation management plans which issue permissible annual extractions, pricing of water on a pro-rata basis to reflect true cost of water, and encouragement of users’ participation in groundwater conservation through watershed development programmes. These regulations should be embedded in local State-based policy evolved under the National Water Policy.

Suggested Citation

  • H. Diwakara & N. Nagaraj, 2003. "Negative Impacts of Emerging Informal Groundwater Markets in Peninsular India: Reduced Local Food Security and Unemployment," Journal of Social and Economic Development, Institute for Social and Economic Change, Bangalore, vol. 5(1), pages 90-105, January-J.
    • Handle: RePEc:sch:journl:v:5:y:2003:i:1:p:90-105
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    File URL: http://www.isec.ac.in/JSED_v5_i1_90-105.pdf
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    Cited by:

    1. Shanmugam Packialakshmi & N. K Ambujam & Prakash Nelliyat, 2011. "Groundwater market and its implications on water resources and agriculture in the southern peri-urban interface, Chennai, India," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 13(2), pages 423-438, April.
    2. Bajaj, Akshi & Singh, S.P. & Nayak, Diptimayee, 2022. "Impact of water markets on equity and efficiency in irrigation water use: A systematic review and meta-analysis," Agricultural Water Management, Elsevier, vol. 259(C).
    3. de Bonviller, Simon & Wheeler, Sarah Ann & Zuo, Alec, 2020. "The dynamics of groundwater markets: Price leadership and groundwater demand elasticity in the Murrumbidgee, Australia," Agricultural Water Management, Elsevier, vol. 239(C).

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