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Abstract
The emergence of groundwater markets has helped in mitigating inequality
in physical access to the groundwater resources, on the one hand, but on
the other hand, it may lead to exploitation of the buyers of water, i.e.
resource-poor, small farmers. For the sellers of water, it is becoming a
remunerative business economically, leading to serious environmental as
well as social concerns. The present study conducted in the arid and semiarid
zones of Rajasthan has addressed these issues. The study has shown
that prevailing terms of water transactions, particularly ‘in-kind’ terms,
lead to the over-exploitation of groundwater resources. The credit policies
and the power pricing policies of the government also help in the
unsustainable and inequitable use of this resource. Water policy ensuring
mandatory recharging of the abandoned wells mainly for the sellers of
water is the need of hour for the efficient and sustainable use of this
scarce natural resource. The analysis of farmers’ decision to participate in
water markets employing logit regression has suggested that the farmers
having higher fragmented landholdings have higher probability of buying
groundwater. Joint ownership of wells is negatively associated with the
farmers’ probability of buying groundwater. This implies that the
consolidation of holdings or installing cooperative wells may economize
the irrigation investment and lead to efficient management of resources of
the farmers and sustainable utilization of water. In the national and state
water policies as well as in the Model Bill to regulate and control the
groundwater resources, this aspect has not been given any emphasis.