Institution of Ground Water Market for Management of Ground Water Resource: A Study from Assam in Northeast India

Assam in the north eastern region of India has the endowments to ensure agricultural growth in the sense that the state has huge reserves of ground water in addition to the enormous surface water availability. Returns to both labor and capital in the state are considered high as potentials for exploiting the existing technology are yet largely untapped. As insufficient irrigation infrastructure is identified as a major constraint on exploiting such potentials, investment for expanding irrigation capacity is needed. At the same time, putting necessary institutions in place to ensure that the installed capacity is effectively utilized is also equally important. Compared to relatively larger government irrigation schemes, the privately owned and operated tube well based small scale projects in the state have relatively better utilization efficiency. However, utilisation of irrigation potential of these schemes is also affected by fragmented and small size of holdings in the state. Emergence of the institution of ground water markets, however, is expected to improve utilisation efficiency of irrigation as it can make optimal use of the scarce natural resource of ground water. To investigate into some of the questions related with enhancing utilization efficiency and better management of the common pool resource of ground water, a study of ground water markets in Assam was taken up. Using inputs from field investigations, the study examined the nature of ground water markets in the state, the issue of reliability of water supply and the conditions for viability of this market for ensuring better management of ground water resource in Assam. The study points out that apart from improving utilization efficiency of irrigation, reliability of water use has also increased considerably with emergence of ground water markets in the state.