Impacts of Water and Energy Sector Reforms in Gujarat: The Case of Expansion of Micro Irrigation Schemes and Rationalisation of Agricultural Power Tariff

Abstract

Against the backdrop of the water and energy sector reforms enunciated by the state government in Gujarat, this paper reviews the important policy changes and outcomes of farm-level adoption of water-saving technologies, on the one hand, and the effective implementation of energy tariff policies, on the other hand. Following an assessment of the water and energy policy and regulatory interventions, the paper provides an overview of the farm-level adoption micro irrigation (sprinkler and drip irrigation) systems over the past one decade of the policy reforms. The paper then examines the case of energy sector reforms enunciated by the state in coordination with the energy regulator through establishment of the distribution companies (DISCOMs). The paper brings out that the policy and regulatory interventions in the water and energy (power) sectors have been successful in terms of wider promotion of micro irrigation systems and deregulation of power generation and distribution activities by establishing dedicated DISCOMs. Thus, the policy initiatives were able to address several challenges facing the water and energy sectors in the state. Firstly, the wide-scale promotion of micro irrigation schemes has significantly reduced the groundwater over-extraction for agriculture. Second, the energy sector reforms have shown a significant progress towards rationalisation of tariffs across sectors. However, it emerges that the policy and regulatory reforms need to (i) go beyond the narrow confines of promotion of micro irrigation systems towards sustainable management of water resources and (ii) move beyond rationalisation of power tariffs by offering sustainable solutions to the problems of water and energy security amidst increasing competition for inter-sectoral allocations. Essentially, the energy sector policies and reforms may explore the potential of renewable energy sources through decentralised investments in solar and wind energy systems in the rural areas involving different public–private community partnership models.

Keywords

Water policy energy reforms micro irrigation systems tariff Gujarat

1. Introduction

Ever since the launch of the planned development process, India had made commendable efforts towards building an entire range of water infrastructure covering surface and groundwater irrigation schemes. Tremendous achievements were made in the expansion of irrigated areas, development of thermal and hydropower systems, as well as supply of drinking water. Irrigation development by itself had helped the country achieve major benefits from agricultural development under the Green Revolution strategy leading to self-sufficiency in food production (mainly wheat and rice) across the north-western parts of the Indo-Gangetic Plains in particular (Chand, 2010; Kumar & van Dam, 2013; Shah et al., 2021; Viswanathan et al., 2012).

However, in spite of all these achievements, there are several challenges that affect the Indian water sector, including poor achievement of irrigation potential on one hand and persistence of inequities in access to water on the other. The prospects of the country’s water sector are afflicted by a serious crisis emerging from a variety of issues, including resource depletion, institutional as well as policy ineffectiveness, and governance issues accompanied by many other management issues, such as (i) huge gaps in the utilisation of surface water despite the large investments for creation of irrigation infrastructure, (ii) overexploitation/depletion of groundwater resources, (iii) shrinkage of fresh surface water due to the drying up of rivers, which once used to be perennial water sources, (iv) lack of effective legislations/regulations to control over-extraction of groundwater, (v) under-pricing or non-pricing of water leading to wasteful use and poor economic performance, (vi) ineffective institutional and regulatory systems in addressing the multifaceted challenges of the water sector, (vii) lack of success in the implementation of participatory agricultural and water management programmes by various agencies, including the national and state governments and (viii) the growing challenges of contamination and pollution of water resources, including groundwater, to mention a few.

Nevertheless, of late, the scenario of water governance in India has been underway of significant changes in terms of emergence of new policies, interventions and schemes aimed at addressing the manifold challenges affecting the water and agriculture sectors.¹ The announcement of the National Water Policy (NWP) in 1987 was first of its kind in India, followed by launch of the second NWP in 2002, which was an amendment over the 1987 NWP. Apparently, following the announcement of the NWP 2002, most of the states had announced their respective state water policies in due course one after the other. These policy reforms also included announcement of regulatory interventions primarily directed towards: (i) formulation of water policies with specification of priorities in water allocation; (ii) setting up of water regulatory authority (WRA); (iii) introduction of market-based instruments, such as water pricing, tariff regulations, trading in water entitlements; (iv) groundwater legislations etc. The 2012 NWP was the latest policy introduced by the national government, proposing several modifications and regulatory interventions over the 2002 policy. More interestingly, the launching of water policy and regulatory interventions across states also coincided with many national and state-specific legislations/enactments with respect to agriculture water use, formulation of tariff regulations and promotion of water saving technological interventions as well as participatory farmer management of irrigation systems.

The imperatives of the need for water sector reforms emerge from both international and national development strategies in the context of the changing perspectives on water amidst growing water scarcities along with competing inter-sectoral allocation demands. In this regard, resorting to market-based regulatory instruments in the form of water pricing has been one of the major reform measures being proposed and increasingly adopted across countries, including India. For instance, the NWP 2002 went a step ahead with its focus on market interventions in the water sector. The policy suggested solutions in terms of institutional interventions, technological solutions, innovations and corporate management approaches for achieving improved financial returns through market-oriented pricing of water. Subsequently, the 13th Finance Commission (2010–2015) suggested setting up of a WRA in every state mandating a minimum recovery of water charges. It was suggested to set up a WRA in every state by 2011–2012 (31 March 2012). Accordingly, the WRA will be responsible for (i) fixing and controlling water tariffs, including charges for use of surface and groundwater for agriculture, industry, domestic and other uses, (ii) determining and regulating water distribution within and across categories of uses and (iii) reviewing and monitoring costs and revenues from water distribution (GOI, 2009). The NWP 2012 also emphasised the need for setting up of the WRA across states. The NWP 2021 also insisted a shift in the role of the state from a mere ‘service provider’ to that of a ‘regulator’ of water services by facilitating and strengthening responsible institutions for effective management of water. It was thought that eventually, water-related services would get transferred to the community or private sectors, giving way to ‘public–private partnership’ model (GOI, 2012).

Further, in 2016, a National Water Framework Bill (Draft) was announced by the Ministry of Water Resources, River Development and Ganga Rejuvenation, under a committee headed by Mihir Shah. The objective of the Bill is to conserve, manage, protect and regulate water use (GOI, 2016). However, the enactment of the Bill requires the approval of the states, as water is a state subject as per Indian Constitution. The Bill proposes fixing up of water charges on volumetric basis, which will also be periodically reviewed to ensure equity and efficiency in water distribution.

Against the backdrop of the policy reforms at the national and state levels aimed at achievement of efficacy in the management of water and energy sectors, this paper attempts at a critical assessment of the policy and regulatory interventions in water and energy sectors in Gujarat. The case of Gujarat assumes greater significance in view of a variety of reasons. First and foremost, Gujarat has been witnessing commendable growth and expansion in agricultural and industrial sectors over the past two decades (Viswanathan & Bahinipati, 2021), with significant implications for water sector in terms of water scarcity amidst competing demand from agriculture, industrial, commercial and domestic sectors (Shah et al., 2009; Viswanathan & Pathak, 2014).

While the demand for water had increased over time, the state has been facing problems of depletion of groundwater resources as well as stagnation of area under surface irrigation systems along with a progressive shift towards adoption of water saving irrigation systems (Bahinipati & Viswanathan, 2019a, b). The Falkenmark measure of water stress suggests that ‘if per capita water availability is below 1,000 m³, it depicts water scarcity and as per this criterion, Gujarat is considered as ‘water starved’ in view of the low per capita rainwater availability than other states.

Water resources in Gujarat are highly concentrated as south and central regions account for about 70% of freshwater, while three fourths of the farm lands are located in the Kutch, Saurashtra and North regions (Table 1).

Table 1.

Profile of Water Resources of Gujarat (Million Cubic Metres).

Regions	Total Water Resources	Surface Water	Ground Water	Storage Capacity of Existing Reservoirs*	(%) of Water Resource	(%) of Area	Per Capita Water Availability (2001)
South and Central Gujarat	38,105	31,750	6,355	10,400	69	25	1,880
Saurashtra	9,723	3,600	6,123	2,250	17	33	540
North Gujarat	6,342	2,100	4,242	2,100	11	20	343
Kutch	1,438	650	788	250	3	22	730
Total	55,608	38,100	17,508	15,000	100	100	990

Source: Narmada Water Resources, Water Supply and Kalpasar Department, 2015.

Note: *Excluding Sardar Sarovar.

In view of the hydro-geographical features, the North Gujarat, Saurashtra and Kutch regions remain to be water starved and heavily depend on groundwater sources, other rainwater harvesting structures as well as water transfer from the Sardar Sarovar and other reservoirs under the Sujalam Suphalam Yojana (Parthasarathy, 2010). The water scarcity in the state is further augmented by depletion and pollution of groundwater sources, polluted rivers and water bodies, salinity and water-logging in canal irrigated areas, salinity in coastal regions, increasing water demand from rural and urban as well as agricultural and industrial sectors (Viswanathan & Pathak, 2014).

Second, Gujarat has a larger share of gross cultivated area (64%) as against the national average of about 51%. However, quite similar to the national scenario, the irrigation development is highly dominated by groundwater sources, such as tube wells and open wells, that hovered around 77%–79% of the net irrigated area (NIA) over the past several decades (Table 2).

Table 2.

Source-wise NIA in Gujarat (‘000 ha), 1960–1961 and 2014–2015.

Period	Canals¹	Tanks	Tube Wells	Other Wells	Other Sources	NIA	Gross Irrigated Area (GIA)	Share of Tube Wells and Other Wells in NIA
1960–1961	65.2	12.8	0	567.7	36.6	682.9	733.8	83.1
1970–1971	236.4	37.2	94.8	988.3	14.1	1,370.8	1,493.9	79.0
1980–1981	366.8	40.9	251.7	1,336.7	65.0	2,002.6	2,334.4	79.3
1990–1991	469.4	31.4	493.4	1,436.7	67.0	2,437.6	2,910.5	79.2
2000–2001	394.2	18.2	NA	NA	95.0	2,806.0	3,342.1	—
2005–2006	778.2	42.2	1,077.9	1,946.3	62.8	3,907.4	4,764.2	77.4
2014–2015	771.0	45.4	1,122.2	2,180.5	114.2	4,233.3	5,614.1	78.0
CAGR* (%)	3.25*	2.73	6.91*	2.90	2.45	3.96	4.42	—

Source: GoG (2008).

Note: ¹ Covers government canals, panchayat canals, private canals and other canals; CAGR*, compound annual growth rate; NA, not available; * CAGR for the period 1970–1971 to 2007–2008.

As noted, the skewed development of the water sector in the state also reflects several governance issues affecting both the surface and groundwater sub-sectors that are the targets of policy and institutional reforms launched in the recent past. At the same time, the dual nature of functioning of the water sector in Gujarat also depicts an interesting case in view of participatory irrigation management (PIM) outcomes in case of canal irrigation systems. On the other hand, groundwater sources are exclusively under the private control with significant implications for water availability and its sustainable management in the state. At the same time, agriculture development in Gujarat has been underway of major transformation through the adoption of diversified and high-valued agricultural crops aided by wider adoption of micro irrigation (drip and sprinkler) systems.² Invariably, all these features make Gujarat a distinct case, in which farmers tend to be highly proactive by responding to policies, new technologies and innovations in agriculture and water as well as regulatory interventions aimed at the efficient management of energy sector.

The remaining paper is structured into four sections. Section 1 presents an assessment of water and energy policy and regulatory interventions in Gujarat with particular reference to the implications on adoption of micro irrigation schemes and rationalisation of water tariff. Section 2 provides an overview of the current status of water tariffs in Gujarat as applicable in case of use of surface irrigation water sources, followed by a discussion of the energy tariff system implemented by the state-owned power distribution companies (DISCOMs) for the use of energy for groundwater extraction. Section 3 presents an empirical assessment of the power tariff implementation and its impacts on achieving efficiency in water use for agriculture and performance of DISCOMs. Section 4 concludes the paper along with describing the policy imperatives based on the study.

2. Water Policy Reforms and Their Impacts in Gujarat: An Overview

Gujarat is one of the pioneering states in India, to launch groundwater regulatory reform as early as 1973, when the state enacted the Groundwater Act. However, the act was not passed due to logistic reasons of regulating a huge number of about 1.01 million well owners dispersed across the state (Shah et al., 2008). In 2001, the government of Gujarat constituted the Gujarat Ground Water Authority (GGWA) under the administrative control of Narmada, Water Resources and Water Supply Department. The state had imposed restrictions with effect from January 2004, on the groundwater withdrawal in 57 overexploited, dark and saline talukas of the state and electric connections to the newly drilled tube wells in 57 talukas were sanctioned only after receipt of ‘no objection certificate’ from the GGWA. However, following a significant improvement in groundwater levels consequent on good monsoon years, the ban was lifted by the government in 2009, with a condition that farmers digging new wells will be permitted only if they adopt micro irrigation systems (MISs), so that groundwater overexploitation can be arrested. In 2012, the state government announced extra 10% subsidy for farmers in dark-zone talukas, to adopt MISs. Notably, this was one of the major outcomes of the groundwater regulation policy interventions, that resulted in a wide-scale expansion of area under MIS in dark-zone talukas in particular (Bahinipati & Viswanathan, 2017).

The need for a water policy for Gujarat was felt way back in the early 2000s, when a White Paper on Gujarat’s water sector (IRMA/UNICEF, 2001) had recommended for a water policy, along with creating a governance mechanism with legal and organisational structures. However, it was only in 2006 that state decided to set up a WRA under the Gujarat Water Regulatory Commission Bill 2006 on the model of the Maharashtra Water Resources Regulatory Authority. The Gujarat Water Regulatory Authority (GWRA) was aimed to bring together the relevant departments for efficient water governance, including water distribution, fixation and rationalisation of tariffs, especially, irrigation water. It was intended that that the GWRA would help strengthen the prevailing governance systems, comprising legal, regulatory, administrative and financial systems. There was also a growing emphasis on creating opportunities for public private participation in urban drinking water supply in particular. The newly proposed tariff reform is expected to attract private sector actors in the water sector in Gujarat. Nevertheless, though WRA was formally established in 2012, it is reportedly defunct for unknown reasons.

2.1 Water Users’ Participatory Irrigation Management Act, 2007

Gujarat announced its official water policy in 2007, namely, Gujarat Water Users’ Participatory Irrigation Management Act, enacted on 18 November 2010. The Act stipulates setting up of water users’ associations (WUAs) in each service (command) area with farm owners joining it as members, though membership is not binding. The major provisions of the Act include: (i) timely water supply, (ii) effective management of WUAs through collection of water charges, (iii) regulate and promote economy in water use, (iv) promote adoption of MISs among farmers, (v) construction and maintenance of water courses and field channels and (vi) check encroachments in the service areas etc. (GoG, 2010).

Following the 2007 PIM Act, the WUAs are ensured of water supply from a minor canal on volumetric basis to the irrigation service area, i.e. the farm lands. Members are encouraged to adopt water saving irrigation systems, such as drip, sprinklers along with remission of the water rates as prescribed by the government. The WUAs are expected to undertake the proper maintenance of the minor canals and other water courses including field channels by incurring the operation and maintenance expenses. For this, the WUAs are expected to set up a reserve fund, by pooling 10% of water charges collected by them along with 10% of the profit accrued to it. It was proposed that initially, water rates need to be collected on crop area basis, which will eventually be converted into volumetric basis as an appropriate measure reflecting the actual quantity of water use.

Thus, the introduction of the volumetric-based water rates was to be introduced as a gradual process, as the WUAs would need to get acquainted with the arrangements of measurement of quantity/volume. The WUAs also need to undertake: (i) maintenance and de-silting of distributaries and minors, (ii) upkeep of the service roads and inspection paths in good condition, (iii) removal of weeds, shrubs and trees from the canal site, (iv) keeping outlets, gate seals etc. in good condition and (v) maintenance of water course and troughs. The water supplied to the WUA can only be used for irrigation purposes and not for other purposes. If there is a need of additional water for saving crops, a separate demand for additional water allotment will have to be put forth for approval from the Irrigation Department (ID), which in turn, may consider such demands based on water availability. WUA may supply water to the non-members too, subject to a prior approval from the ID. In such cases, the WUA can decide special water charges not above more than 30% over and above the water rates normally charged from its members. WUA may also supply water for non-irrigation uses within a project command area subject to prior approval from the ID and in such cases, WUA will have to pay special rates, as decided by the government considering the case merit (GoG, 2010).

2.2 Gujarat’s Water Policy, 2015

Gujarat had announced its water policy in 2015. According to the statement, the total available water resources (surface and groundwater) of Gujarat were estimated as 55,600 MCM (38,100 MCM surface water and 17,500 MCM groundwater), of which, 88% was used for irrigation, followed by domestic (10%) and industrial (2%) uses. As water demand continues to grow across sectors, the available water supply may fall short of demand by 2025. Furthermore, while improper maintenance of irrigation infrastructure caused significant wastage and under-utilisation of water, problems of pollution of water sources due to inflow of industrial effluents had also affected water quality of rivers across the state (GoG, 2015). These challenges raise concerns as regards implementing effective water governance mechanisms in the state.

The water policy set water allocation priorities such as (i) drinking water, (ii) irrigation, (iii) hydropower, (iv) ecological services, (v) agro-industries and non-agricultural uses and (vi) navigation and other uses. However, the policy document stated that the above priorities could be modified or added based on the changing requirements of the regions. The policy also underscored the promotion of water-saving technology as a measure of achieving efficiency in water management. To this end, it suggested measures, such as aligning cropping pattern with water endowments, promoting and incentivising drip and sprinkler adoptions, automated irrigation practices, reducing evapotranspiration ration and recovering of seeped in canal water through conjunctive ground water use (GoG, 2015).

The policy document also highlighted the need for addressing climate change risks through augmenting water conservation and storage in various forms, such as: soil moisture, ponds, artificial water recharge, building small and large reservoirs, etc. Further, it suggested adaptation strategies in terms of (i) effective demand management through suitable agricultural practices and crop choices and (ii) improved water application techniques, involving land levelling and drip/sprinkler irrigation systems, as these measures help improve efficiency in water use and thereby overcoming the climate variabilities (GoG, 2015).

2.3 The Gujarat Irrigation and Drainage Act (2013) Amendment Bill 2019

Apart from the PIM Act 2007 and Water Policy, 2015, the state government had also passed the Gujarat Irrigation and Drainage Act (GIDA), 2013, to address groundwater over-extraction and theft of canal waters. As per the Act, farmers are not allowed to dig a well in their own fields and access water from nearby canals without permission of the ID. The Act imposes harsh penalties on those violating the law. The Act 2013 was also emphatic on improving performance of irrigation systems in Gujarat by ensuring equitable water distribution along with farmers maximising the irrigation benefits through improved production at reduced costs.

The GIDA 2013 was amended by the state in 2019, as water conservation and equitable distribution became a priority in view of the increasing pilferage or wastage of water reported. The Amendment Bill suggested stringent measures to enforce penalty for damaging the canal infrastructure, causing disruptions in water supplies in the canals, etc. The state also passed the Gujarat Domestic Water Supply (Protection) Bill, 2019, which suggested imposing penalties for theft of water for domestic uses. The Bill also proposed creation of a water appellate authority, which would be entrusted with the care and management of all water sources with powers similar to a civil court. The provisions of the amended Bill allow the canal officer to ‘confiscate the engine, pipeline, or any other instrument used for drawing canal water unauthorised, and such instruments shall be returned by paying a penalty up to Rs 1 lakh to the canal officer’. The Bill also put forth several other penalty/imprisonment terms for (i) polluting canal water or releasing liquid or solid wastes into rivers/canals, (ii) unauthorised lifting of water from canals, removing/damaging water management structures and (iii) diverting floor of river or damaging flood-embankments, etc. (GoG, 2019).

While several policy initiatives and interventions have been enunciated by the state government, it may be worth exploring the ground-level implementation and adoption of the same and their efficacy in overcoming the water sector problems. In what follows, we address the same.

2.4 Impacts of Water Policies: Expansion and Benefits of MISs

The implementation of the PIM concept was envisaged to augur well through the area expansion under micro irrigation (sprinkler and drip) systems in the canal commands, which will be monitored by the canal officer of the ID. For the effective supply of water to drip and sprinkler systems, the canal water needed to be fed (stored) into the storage tanks, farm ponds, check dams, small new tanks, sumps or such other developed sites near the canals from where drip and sprinkler systems can be operated. A five-year master plan was proposed to develop a drip and sprinkler irrigation system from all irrigation water resources, such as canals, tanks, tube wells, check dams, open wells, rivers and rivulets. It was also intended that the WUAs practising flow irrigations shall have to eventually switch over to drip and sprinkler irrigation systems in a phased manner during period of five years, closing the conventional practice of flow and flood irrigations.

Apparently, there was a significant rise in the number of WUAs registered along with an increase in the irrigated area following the implementation of PIM policy. For instance, the number of WUAs increased by more than 10% from 1,721 by the end of August 2015 to 1,897 by September 2019. The corresponding increase in irrigated area was about 12% from 5.19 lakh ha (2015) to 5.78 lakh ha (2019). It was reported that following the expansion of canal networks of 1.60 lakh ha, tail-end farmers belonging mostly to tribal areas were able to benefit under the PIM works covering an area of 85,331 ha (GoG, 2020).

The implementation of the PIM Act coincided with the wide-scale promotion of micro irrigation schemes, which was supported by the state under the national initiative National Mission on Micro Irrigation since May 2005. The programme benefited vast tracks of farm lands covered under the private and public tube wells (Bahinipati & Viswanathan, 2019a, b). The dramatic increase in area under MIS has been facilitated by the Gujarat Green Revolution Company (GGRC) ably supported by the national and state governments (GoG, 2020). The MIS programme received further impetus under the Pradhan Mantri Krishi Sinchayee Yojana launched on 1 July 2015. The major goals of MIS promotion are maximisation of farm production at minimum cost and thereby augment farm income along with scientific management of water in the canal areas and groundwater sources.

Thus, Gujarat witnessed tremendous progress in area expansion under MIS ever since 2005–2006 (Bahinipati & Viswanathan, 2019a). The data reported by GGRC show that about 1.25 million farmers have benefited by the MIS spread across 2 million hectares of the cropped area between May 2005 and March 2021. A total subsidy of ₹6,697 crores has been given to the farmers for the adoption of sprinkler and drip irrigation systems. Figure 1 presents the trends in the disbursement of subsidy for the promotion of MIS in Gujarat. It shows that the state has been spending an average of ₹418 crores per annum for the promotion of MIS, though the later years are showing a deceleration trend in the financial subsidy, which could be due to the saturation for further expansion.

Figure 1.

Source: Data compiled from GGRC data source.

An assessment of the status of farmers benefited under the MIS scheme in Gujarat reveals that about 14% of the total beneficiaries belong to tribal communities. In terms of crops benefited under MIS, almost 85% of the cropped area includes important crops, such as groundnut (46%), cotton (31%), while horticulture crops occupy 15% of the area, dominated by potato, vegetables and banana. MIS adoption based on farm size classification indicates that almost 55% of the farmers belong to medium size, followed by small farmers (31%), marginal farmers (10%) and large farmers (4%).

Table 3 presents the district-wise distribution of sprinkler and drip irrigation systems in Gujarat under the micro irrigation scheme.

Table 3.

District-wise Status of Adoption of MISs in Gujarat, 2005–2006 to 2020–2021.

#	District	Drip Irrigation		Sprinkler Irrigation		Total		Relative Share in
#	District	Farmers (No)	Area (ha)	Farmers (No)	Area (ha)	Farmers (No)	Area (ha)	Farmers (No)	Area (ha)
1	Ahmedabad	2,150	4,634	10,838	27,112	12,988	31,746	1.04	1.59
2	Amreli	33,076	53,981	31,765	50,099	64,841	104,080	5.18	5.21
3	Anand	4,764	5,713	35	81	4,799	5,794	0.38	0.29
4	Arvalli	29,591	56,492	18,735	20,532	48,326	77,024	3.86	3.85
5	Banaskantha	162,525	253,412	76,026	138,895	238,551	392,307	19.06	19.63
6	Bharuch	12,653	21,344	4,347	7,409	17,000	28,753	1.36	1.44
7	Bhavnagar	34,173	49,880	27,384	35,515	61,557	85,395	4.92	4.27
8	Botad	35,182	59,379	1,071	2,652	36,253	62,031	2.90	3.10
9	Chhota Udepur	8,854	12,726	31,765	41,750	40,619	54,476	3.25	2.73
10	Dahod	1,286	2,512	25,812	36,510	27,098	39,022	2.17	1.95
11	Dangs	599	497	7,045	7,134	7,644	7,631	0.61	0.38
12	D. Dwarka	6,449	8,802	28,668	65,835	35,117	74,637	2.81	3.73
13	Gandhinagar	8,674	14,539	4,077	4,935	12,751	19,474	1.02	0.97
14	Gir Somnath	13,778	19,655	33,622	38,854	47,400	58,509	3.79	2.93
15	Jamnagar	20,580	32,280	13,339	27,252	33,919	59,532	2.71	2.98
16	Junagadh	15,930	22,833	93,764	129,923	109,694	152,756	8.77	7.64
17	Kheda	6,794	11,656	9,878	11,881	16,672	23,537	1.33	1.18
18	Kachchh	33,174	77,172	9,613	20,145	42,787	97,317	3.42	4.87
19	Mahisagar	2,786	5,016	6,338	8,531	9,124	13,547	0.73	0.68
20	Mehsana	13,278	17,140	14,047	16,670	27,325	33,810	2.18	1.69
21	Morbi	17,033	26,913	4,716	9,826	21,749	36,739	1.74	1.84
22	Narmada	12,186	17,267	8,361	11,047	20,547	28,314	1.64	1.42
23	Navasari	6,082	7,675	10,710	14,873	16,792	22,548	1.34	1.13
24	Panchmahal	1,866	2,754	6,748	10,998	8,614	13,752	0.69	0.69
25	Patan	4,978	8,635	13,315	30,122	18,293	38,757	1.46	1.94
26	Porbandar	1,917	2,705	21,974	37,599	23,891	40,304	1.91	2.02
27	Rajkot	48,181	68,307	22,580	40,096	70,761	108,403	5.65	5.42
28	Sabarkantha	47,191	75,589	12,296	12,946	59,487	88,535	4.75	4.43
29	Surat	9,233	14,459	10,510	17,528	19,743	31,987	1.58	1.60
30	Surendranagar	28,673	52,871	12,100	33,210	40,773	86,081	3.26	4.31
31	Tapi	5,788	11,063	22,746	29,542	28,534	40,605	2.28	2.03
32	Vadodara	9,517	15,962	1,973	4,385	11,490	20,347	0.92	1.02
33	Valsad	4,606	7,101	11,650	13,917	16,256	21,018	1.30	1.05
	State	643,547	1,040,964	607,848	957,804	1,251,395	1,998,768	100.00	100.00

Source: GGRC, Government of Gujarat.

Table 3 shows that barring few districts, such as Banaskantha, Junagadh, Rajkot, Amreli, Sabarkantha, Kachchh and Surendranagar, the MIS adoption is very thinly distributed across all the districts. On a positive note, this signifies the universal adoption of the water-saving technologies in the state, which highlights the effectiveness of the extension and support systems provided by the GGRC and the state agricultural departments for the promotion and upscaling of the MIS over the past 15 years. It appears that the GGRC and the state government have developed a fairly transparent and effective system by way of starting a ‘Farmers’ Portal’ for the easy adoption of MISs. Farmers need to preregister their applications in the portal for adopting MIS.

An earlier assessment of the MIS adoption by 650 farmers attached to public tube wells in 10 talukas of Gujarat by the authors (Viswanathan & Bahinipati, 2014) revealed significant economic, social and environmental benefits. It was observed that almost 89% of the farmers were benefited by a considerable increase in crop yield and water savings due to MIS adoption (Figure 2). About 61% of farmers reported a drop in ground water use, while 55% reported a reduction in use of pesticides and fertilisers. Further, a majority of farmers were also benefited by a reduction in pests or diseases and consequent savings in weeding costs (70% each).

Figure 2.

Source: Viswanathan and Bahinipati (2014).

The social benefits included savings in energy consumption as reported by 66% farmers and better allocation of scarce water (93%). Quite importantly, it is found that the micro irrigation scheme helps achieve equitable water distribution, individual farmers follow a uniform method of irrigation. A smaller proportion (35.3%) of farmers also reported that they could avoid migrating to cities or other states as there was no water scarcity due to MIS adoption (Viswanathan & Bahinipati, 2014).

3. Energy Sector Reforms and Impacts

Having discussed the successful implementation and outcomes of the water policy reforms in terms of wide-scale promotion of MIS, we now briefly discuss the energy sector reforms enunciated by the state government in Gujarat. Since irrigation water use is the major source of power consumption through the use of tube wells for pumping water, it is expected that a paradigm shift towards MIS would have resulted in significant reduction in water and energy consumption and improved performance of the power DISCOMs in Gujarat.

Like many other states, tube-well owners in Gujarat pay electricity charges based on unit power consumption. In 1989, Gujarat introduced flat-rate tariffs based on the pump-set capacity. This initially caused a rise in groundwater extraction along with a drop in the cost of metering and billing, thus reducing the burden to the Gujarat Electricity Board (GEB). Nevertheless, the increased groundwater withdrawal caused an alarming drop in groundwater levels as farmers had used high capacity pump sets, leading to a huge loss to GEB worth ₹14,850 million per annum (Shah et al., 2008). A major chunk of these losses was due to power subsidies given to farmers. Farmers also vehemently opposed the rise in flat-rate tariffs along with a reduction in hours of farm power supplies.

However, launching of the Jyotigram Yojana (JGY) by the state government in 2003 (September) was seen as a solution to many of the power sector problems in Gujarat. The JGY was initially launched in eight districts as a pilot project and in 2004 (November), it was upscaled to the entire state. In 2006, the Jyotigram scheme covered more than 95% of the 18,000 villages in Gujarat (Shah & Verma, 2008). The scheme was primarily aimed at bifurcating the agricultural feeders from those supplying power to commercial and residential uses. The scheme offered a win-win solution for both farmers and other users. Farmers were more benefited as they received assured power supply for pre-announced eight hours with full voltage. Rural households also started receiving 24 hours three phase supply for domestic purposes.

The impacts of energy sector reforms in Gujarat appeared to be two-fold. Firstly, the state government was able to strictly impose area-based water tariffs for the supply of canal waters. Second, under the JGY, the state could introduce efficient management of power supply through establishment of four major DISCOMs serving the four geographical regions of Gujarat, viz. Dakshin Gujarat Vij Company Ltd. (DGVCL), Madhya Gujarat Vij Company Ltd. (MGVCL), Uttar Gujarat Vij Company Ltd. (UGVCL) and Paschim Gujarat Vij Company Ltd. (PGVCL).

Thus, it may be noted that the state was successful in implementing power tariffs for water use for irrigation and other uses, such as domestic, commercial and industrial activities. This is further evident from the improved recovery of water tariffs from all sectors, especially agriculture as evident from Table 4. Apparently, the realisation of water rates (against its assessment) for agriculture had significantly improved over the years to as high as 89% during 2014–2015, the latest period for which data were available.

Table 4.

Trends in Assessment and Realisation of Water Rates in Gujarat, 2000–2001 to 2014–2015.

Year	Assessment (₹ Crores)				Recovery (₹ Crores)				Recovery as % of Assessment (Agriculture)
Year	Agriculture	Drinking Water	Industry	Total	Agriculture	Drinking Water	Industry	Total	Recovery as % of Assessment (Agriculture)
2000–2001	9.31	10.16	159.92	179.39	7.13	1.34	113.12	121.59	76.6
2001–2002	14.92	42.57	253.48	310.97	9.68	3.42	187.69	200.79	64.9
2002–2003	22.20	37.44	165.40	225.04	15.72	6.78	209.07	231.57	70.8
2003–2004	33.92	101.18	126.16	261.26	18.92	3.05	181.85	203.82	55.8
2004–2005	38.10	62.05	204.03	304.18	23.37	9.89	164.54	197.80	61.3
2005–2006	52.45	83.17	261.87	397.49	32.41	11.47	179.51	223.39	61.8
2006–2007	61.87	86.97	282.19	431.03	37.54	10.96	236.58	285.08	60.7
2007–2008	67.75	84.81	357.50	510.06	37.76	34.40	356.70	428.86	55.7
2008–2009	69.60	91.66	355.52	516.77	35.27	41.65	353.22	430.14	50.7
2009–2010	44.48	107.15	419.26	570.89	33.99	39.55	391.00	464.54	76.4
2010–2011	47.61	139.11	503.77	690.49	38.38	88.07	442.35	568.80	80.6
2011–2012	51.93	141.89	696.69	890.51	41.73	53.92	539.02	634.67	80.4
2012–2013	40.95	154.28	665.52	860.75	33.65	61.57	558.18	653.39	82.2
2013–2014	39.52	162.58	669.79	866.17	33.81	128.72	649.07	811.60	85.6
2014–2015	41.16	194.14	776.21	1,005.49	35.14	66.12	803.50	904.77	89.9
G. Rate*	8.21	15.06	11.88	11.76	9.96	28.71	13.18	13.77	—

Source: Gujarat Water Resources Development Corporation.

Note: *G. rate, growth rates are log-linear trend values.

3.1 Bifurcation of Agricultural Feeders and Effective Energy Supplies by the DISCOMs

Now, we turn to the impacts of the decentralised energy sector reforms in terms of bifurcation of feeder services and management by the DISCOMs classified into agricultural and non-agricultural categories. As part of power sector reforms, four power DISCOMs have been created by the government in 2003 under the auspices of the Gujarat Electricity Regulatory Commission³ (GERC). This has enabled efficient transaction of power for agricultural and non-agricultural uses coincided with metering of unmetered agricultural and non-agricultural consumers. The region-wise segmentation of the DISCOMs representing four regions, viz. South Gujarat (DGVCL), Central Gujarat (MGVCL), West Gujarat (PGVCL) and Northern Gujarat (UGVCL) enabled efficient and decentralised management of power delivery services, while curtailing problems of (i) energy theft, (ii) preponderance of unmetered connections, and (iii) significant losses in transmission and distribution. Metring of unmetered connections enabled real-time measurement of the energy consumption details of the farmers, thus fixing the pitfalls in the delivery of energy supply services especially for agricultural uses.

The implementation of energy sector reforms through bifurcation of feeders for agricultural, industrial, commercial and residential power supplies has significantly improved the efficiency of the DISCOMs, with few exceptions in the case of areas, where the process of metering of unmetered agricultural connections is still incomplete. In the absence of policies or regulations in place for control of groundwater use in terms of water tariffs, we consider that the energy tariffs for pumping of irrigation water can offer as an effective measure for regulating the overexploitation of groundwater. Further, the extensive adoption of MIS by the farmers as reported earlier enables saving of irrigation water and thus allowing the unexplored water to remain as a buffer in the groundwater aquifers providing ecosystem services (Viswanathan, 2014).

The brief assessment of the impacts of energy sector reforms on the agricultural power consumption trends in Gujarat is made here to reflect on the beneficial outcomes of the policy interventions. Table 5 presents a summary of the key aspects of the status of the DISCOMs with respect to agricultural power consumption in Gujarat, which reflects on the impacts of the sectoral policy reforms launched since 2005.

From Table 5, it may be observed that agricultural feeders constitute the major chunk of total energy feeder categories in the case of UGVCL (61%) and PGVCL (53%) during 2018–2019. These two DISCOMs also report the highest percentage of agricultural consumers, i.e. 16% in case of PGVCL and 10% in case of UGVCL, while in other two cases, the percentage of agricultural consumers hovered around 5%.

Table 5.

Status of Agricultural Power Consumption and Performance of DISCOMs.

Year/DISCOM	Agricultural Feeders in Total (%)	Agri. Consumers (% of Total)	Unit Price of Energy Sold (₹/kWh)	Share in Total Energy Sold (%)		Distribution Loss (%)	PAT from Energy Sales (₹ Crores)
Year/DISCOM	Agricultural Feeders in Total (%)	Agri. Consumers (% of Total)	Unit Price of Energy Sold (₹/kWh)	Agriculture	Industry	Distribution Loss (%)	PAT from Energy Sales (₹ Crores)
2011–2012
DGVCL	23.83	4.08	5.37	5.48	41.43	10.24	76.00
MGVCL	34.18	2.86	4.85	13.55	35.87	12.18	36.00
PGVCL	52.74	10.78	4.47	32.79	31.46	27.88	9.00
UGVCL	66.87	8.29	4.04	51.82	25.44	9.81	12.00
2018–2019
DGVCL	22.20	5.40	6.62	4.75	49.55	5.89	39.00
MGVCL	33.25	5.23	6.02	13.32	40.92	9.98	33.00
PGVCL	52.76	16.08	5.86	27.28	43.64	20.50	75.00
UGVCL	60.56	10.23	5.31	43.47	34.02	11.20	37.00

Source: Estimations based on data gathered from the GERC reports.

Note: PAT indicates profit after taxation.

As areas served by UGVCL and PGVCL are dominated by agricultural consumers, the unit price realised from sale of energy was relatively lower in case of UGVCL (₹5.31/kWh) and PGVCL (₹5.86/kWh) as compared to DGVCL (₹6.62/kWh) and MGVCL (₹6.02/ kWh). The districts covered under these DISCOMs also reported major share in the consumption of energy for agriculture, i.e. 44% in the case of UGVCL and 27% in case of PGVCL. In fact, the policy reforms leading to bifurcation of the power feeders into agricultural and other categories, such as residential, Jyotigram, commercial and industrial (HT and LT), have significantly improved the efficiency of the DISCOMs enabling them to reduce the distribution losses to minimum levels in the case of DGVCL and MGVCL in particular.

However, the distribution losses still continue to be a matter of concern for PGVCL and UGVCL and this is attributed to the prevalence of higher proportions of unmetered connections in these DISCOMs. For instance, unmetered connections still continue as high as 11.64% of the total connections in Gujarat, the highest proportions reported in case of PGVCL (16%) and UGVCL (15%), as compared to 8.6% in MGVCL and 2.2% in DGVCL during 2018–2019. By and large, the DISCOMs were able to improve their financial performance also, though with exceptions in the case of DGVCL and MGVCL during the latest reporting year, while PGVCL and UGVCL have significantly improved their profit ratios as indicated by the profit after tax (PAT). One reason for the notable improvement in the PAT in case of PGVCL and UGVCL could be the diligent efforts in metering of the unmetered connections especially in the case of the agricultural consumers.

One of the important aspects of the existing tariff policy is the relatively lower power tariffs fixed for agricultural consumers vis-à-vis other consuming sectors, especially, industry (LT and HT), commercial and residential uses. The lower tariff for agricultural consumers is a welfare measure and is achieved through cross subsidisation with industrial sectors mostly compensating for the lower agricultural tariffs. The average per unit water tariff rates realised on sale of power for agricultural consumers centred around ₹5.59 per kWh, as against ₹6.32 per kWh in case of industrial consumers during 2018–2019 (Figure 3).

Figure 3.

Source: Authors’ estimates based on GERC annual reports.

4. Conclusions and Future Perspectives

From the foregoing analysis, it emerges that Gujarat had launched policy and regulatory reforms and interventions ever since the mid-2000s in particular, which are aimed at addressing the challenges of increasing scarcity of water as well as streamlining the governance and achieving efficiency in the management of water and energy sectors. These reforms and policy interventions may have long-term benefits in terms of keeping the economy on the high growth trajectory while addressing the critical challenges of resources management through appropriate regulatory interventions, including tariff regulations as discussed. It may be noted that the regulatory interventions in respect of the energy/power sector have been somewhat successful in terms of deregulation of power generation and distribution activities by setting up of dedicated companies (DISCOMs), which were able to address several challenges facing the water and energy sectors in the state. One of the major initiatives has been the wide-scale promotion of MISs across the state, which has shown significant progress in terms of farmer adoption and thereby contributing to a reduction in the over-extraction of groundwater for agriculture. Nevertheless, it is still a matter worth further empirical investigation as to the real savings in groundwater and the reduction in depletion of groundwater sources across regions, especially, the dark-zone areas in the state.

As emerge from the analysis, regulatory interventions in the energy sector seemed to be heavily biased towards fixing the tariffs for water, rather than trying to develop a holistic perspective for the governance of the sector, especially considering the critical challenges of emerging water scarcity along with increasing demand across sectors. Further, as a large number of farmers in Gujarat belong to medium, small or marginal categories, the progressive hikes in tariffs (both water and energy) may have spiralling effects on the costs of farming and farming operations, which may adversely affect the net farm business income, which is also otherwise adversely affected by the highly fluctuating farm gate prices across crops. This may worsen the social and economic conditions and well-being of farmers in the long run.

Yet another question that need further discussion is that ‘Do the widespread recourse to water and energy saving devices/technologies/irrigation systems ultimately help achieving efficiency and savings in water and energy (and reducing the overall paid out water and energy costs) and thereby reducing the water and energy foot prints? Will tariff regulations or reforms that we discussed in the paper, help us achieve these broad social objectives of the MIS technology and the interventions, thereon? While state governments and state-owned regulatory institutions are increasingly trying to regulate the water and energy sectors in terms of interventions and tariffication policies rather than trying to fix the water and energy security issues, it is also important to get a closer understanding of the parallel regulations and efforts by the farmers/village community organisations in effectively responding to the developmental challenges confronting water and energy security issues. Given the fact that the current power consumption levels across sectors including agriculture are unsustainable as they are mostly sourced from conventional energy sources, it is all the more important to shift the focus towards renewable energy systems by promoting solar-based pumps for agriculture and rooftop solar panels for other consuming sectors, as highlighted in many recent studies,⁴ though with differences in perspectives.

Footnotes

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

Notes

ORCID iD

P. K. Viswanathan

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