This report describes how subsidized electricity has incentivized groundwater extraction in Haryana, India. The authors identify agricultural subsidies in general and then quantify the major irrigation, fertilizer and agricultural electricity subsidies. They find that, in “the basket of normalized electricity”, surface irrigation and fertilizer subsidies available to farmers in 2015, the largest share of subsidies went to electricity for groundwater extraction (51 per cent), followed by fertilizer subsidies (35 per cent). The report concludes with available options for the reform of electricity, irrigation and fertilizer subsidies.
International Institute for Sustainable Development
20 October 2015