Irrigation Subsidies in India: Balancing Farmer Welfare and Environmental Sustainability

Abstract

This research paper explores the impact of irrigation subsidies on water use efficiency, groundwater depletion, and farmer welfare in Indian agriculture. By analyzing regional variations in subsidy structures across Punjab, Maharashtra, and Gujarat, the study highlights how such policies affect both agricultural productivity and environmental sustainability. While subsidies have lowered input costs, supported food security, and enabled technological adoption, they have also encouraged inefficient water use and contributed to critical aquifer depletion. Importantly, the benefits of these subsidies have been unevenly distributed: larger and wealthier landholders capture a disproportionate share of support, while marginal and small-scale farmers often struggle to access or benefit from the schemes. This has exacerbated rural wealth inequality even as the overall productivity of the respective states has risen. The findings indicate that blanket subsidies without governance mechanisms have numerous long-term environmental and social effects, whereas adaptive, conditional, and performance-based approaches can improve efficiency and equity. As a result, policymakers must develop region-specific incentives that are regularly audited and connected to measurable outcomes like groundwater recharge, agricultural diversification, and the use of water-saving technologies. The study also underlines the need for policy that strikes a balance between short-term productivity gains and long-term environmental stewardship and social justice.