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Water use efficiency and externality in the groundwater exploited and energy subsidised regime

Groundwater plays a critical role in the agricultural economy of Gujarat state. The lack of surface water resources has put more pressure on groundwater to meet both agriculture as well as industrial and domestic sector demand. More than 90 per cent of the total irrigated area is covered through groundwater source in the region. The groundwater development in the region has taken place in an exponential manner. There is heavy overdraft, exceeding the annual rechargeable capacity in some areas.