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.