Borewell is not holding the water

No water in 2 months after installing a borewell

I have constructed a borewell near the Electronic City in Bangalore around two months back. We had dug around 1030 feet when we get 2 inches water. We stopped the borewell after digging another 5 feet as the borewell person informed that he cannot dig further.

We had been getting water adequately until last week, when water dried up. With the help of camera we found out that there was no water in the borewell. In the camera we observed that water was falling from the top around 600 feet into the borewell, but the borewell was not retaining the water . 

Recently there was another borewell which was installed around 200 feet from my borewell, which was dug around 1340 feet after which the source in my borewell was gone. 

My questions are

1) Does this mean that they have caught the same source of water as my borewell?

2) Does this mean that although water is flowing from top in my borewell, since they have dug around 300 feet more than my borewell the water is flowing to thier borewell. 

Can you please suggest me what to do now, so that we could get some water sufficient for one family ?

Thanking you in advance.

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