Many years ago, we used to get water just by digging a few feet below the ground, but now, even 300 feet may not be enough.
This is a growing crisis beneath our feet. Over the past five decades, India has seen a staggering 500 percent increase in groundwater use, making it one of the largest consumers of groundwater worldwide. Since the 1980s, groundwater levels in the country have dropped by an average of over 8 metres, with some areas experiencing declines of up to 30 metres. This situation is particularly critical in the alluvial aquifers of north-west India as compared to that in central and southern India.
But what’s causing this silent crisis? In a study published in Nature Communications, the authors Shoumitro Chatterjee, Rohit Lamba and Esha D. Zaveri, point that this has to do with well intentioned, but poorly designed agricultural and now taken for granted subsidies that were originally made to support farmers with risk-free remunerative incomes.
What are output subsidies?
Output subsidies are government programmes that guarantee the purchase of crops, mainly rice and wheat, at fixed, pre-determined prices to enhance food security and offer farmers stable, risk-free incomes. They were first implemented during the Green Revolution in the 1960s in Punjab and later spread to other states. Although this policy was justified at the time, the authors of the paper argue that it is no longer effective. They claim that it may actually harm food security, farmers' incomes, and environmental sustainability by contributing to the rapid depletion of groundwater resources.
Rice, wheat—and a dangerous incentive
Output subsidies lead to rapid groundwater depletion in India because India continues to have surplus cultivation of rice and wheat that surpasses consumption needs and emergency reserves by at least 30 percent. However, the guaranteed subsidy continues to motivate farmers to grow more rice and wheat instead of diversifying into other crops, in spite of this extra production.
Rice and wheat are known to be major water guzzlers and are forcing farmers to rely on personal irrigation systems, such as wells, when surface water sources like dams or canals are not reachable or inadequate to meet their needs.
This has contributed to a rapid decline in groundwater levels. This rapid decline in groundwater could threaten food security and farmers livelihoods and undermine adaptability to climate change and the very objectives of the policy if unchecked, warn the authors. Without a cap or a sunset clause, the policy has triggered a vicious cycle where the deeper the groundwater table, the costlier the cultivation due to increasing costs required for well deepening and pumps.
Around 260 million farmers grow rice and wheat and depend on this policy for their incomes, and the government is forced to increase the subsidy every year to cover increasing costs, leading to a current spending of about USD 4 billion annually, with variations across states.
What does the evidence show?
There is very limited evidence on the impact of output subsidies on groundwater depletion in India. This study examines the role of the output subsidy policy in eroding India’s groundwater supplies by collating and analysing data from 1981 to the present.
The study finds that
Increased cultivation of a water-intensive crop like rice is closely tied to increases in groundwater stress across India, which is visible from the number of defunct or dried wells.
Analysis of data finds that a 1 standard deviation increase in the rate of growth in the area under rice cultivation between 1996 and 2015 is associated with a 5.44 percentage point (pp) increase in defunct wells in the region. This confirms that rather than irrigation through surface water like canals, water is used from wells that dry up due to overextraction. Thirty percent excess of rice and wheat production is sustained because of the government’s guaranteed purchase of these crops at higher than market prices.
The impacts of the policy are not only limited to northwestern India but can impact all regions in India in different hydrogeological settings
The study compared data from Punjab and Madhya Pradesh—two states with distinct aquifer systems—to illustrate the main mechanism by which the output subsidy policy impacts the groundwater table. The study found that the output subsidy policy contributed to at least 50 percent of the local decline in the groundwater table in Punjab. The region overlays deep alluvial aquifers, and the depletion has happened gradually after 6-7 years. For the central Indian state of Madhya Pradesh, which overlays hard rock aquifers with low storage capacity, since the inception of the output subsidy policy in 2008, the incidence of dry wells has increased by 5.3 pp and demand for deep tube wells by 3.4 percent.
What are the implications of the study?
The study thus shows that the subsidy programmes have had deleterious consequences for groundwater and consequently the environment and sustainability and can have far-reaching consequences.
Subsidy programmes could accelerate groundwater depletion and expose India's most productive regions to desertification
The thick alluvial aquifers of northern India are a key buffer against climate change, and their recharge takes centuries. Their depletion could expose India’s most productive regions to the possibility of desertification.
Output subsidies could trigger nutrition-related deficiencies
The output subsidies could also impact nutritional outcomes in the long run. In 1960, India faced food deficiencies, and thus agricultural policies (output subsidies) were coupled with food policies (consumption subsidies). The grains procured under the output subsidy program are provided as subsidised food to those with lower incomes, and this is used as a justification to continue with the output subsidy program.
However, while increased cereal production has ensured cereal availability, the diversity in food systems has suffered due to lack of attention to other nutrient-rich crops like coarse cereals and pulses.
“This, combined with consumption subsidies, has made nutrition-rich food more expensive and thus led to its absence on the consumer plates as well. The National Food Security Act of 2013 has furthered this by codifying subsidies for staples into law. As a result, the Indian population today faces “hidden hunger” due to nutrition-related deficiencies,” explain the authors Shoumitro Chatterjee, Rohit Lamba and Esha D. Zaveri.
Faulty subsidy policies could accelerate virtual water export by India, stressing its water resources further
There is also a trade paradox. India has one of the lowest per-capita availabilities of freshwater reserves, and it should ideally import water-intensive crops and export the less water-intensive crops. However, induced by agricultural policies, India exports 25 × 109 m3 in virtual water every year. India accounts for 12 percent of the global groundwater depletion associated with international food trade and could lose its entire available water in <1000 years.
Rethinking ways to support farmers
The researchers behind the study believe it’s time for policymakers in India to take a hard look and rethink current mechanisms at how we support farmers and consumers through subsidies. Right now, the system is designed to promote food security and stable farmer incomes—but it's also draining our groundwater and hurting long-term sustainability.
Changing this may not be easy. Even if we know the “ideal” way to buy crops that utilise less water and offer more nutrition, making it work on the ground is tricky. There are challenges—limited government capacity, political pushback, and economic realities that make big changes difficult to implement.
One promising step is PM-KISAN, the government’s income support scheme. It sends money directly to farmers, regardless of what crops they grow. It is important because it doesn’t push farmers to grow water-hungry crops like rice or wheat. But currently, this support comes on top of existing crop subsidies—not in place of them.
The authors also suggest exploring price deficiency payment (PDP) schemes. These would help farmers if market prices drop without tying them to specific crops. It’s a way to make farming more resilient, especially in the face of climate change.
Lastly, investing in smarter technology and supporting agricultural research is essential. Instead of just handing out subsidies, policies should also help farmers innovate so they can grow food sustainably, earn better incomes, and adapt to changing conditions.
“Farmers continue to rely on the Minimum Support Price (MSP) procurement apparatus of rice and wheat in the states of Punjab and Haryana, where groundwater stress is the most severe. Successfully moving away to alternative systems will require trust-building and convincing farmers that systems of support and subsidies that are not linked to water-intensive crops can work,” the authors explain, adding, “This is critically important as Indian policymakers vigorously debate the future of these policies as a part of the government’s plan to liberalise India’s agricultural markets.”
India’s groundwater crisis isn’t just a problem for scientists or policymakers. It’s about the water beneath our feet, the food on our plates, and the future of our farmers. If we want to secure all of these, we must look again at what we grow, why we grow it, and who pays the price.