Does Marginal Cost Pricing of Electricity Affect the Groundwater Pumping Behaviour of Farmers? Evidence From India

The purpose of this evaluation was to quantify the impact of the recent policy change in West Bengal relating to the pricing of electricity from a flat-rate tariff to a metered tariff. The study attempted to assess its impact on the total number of hours pumped, especially in the summer season, and its distribution across use on the pump owner's own farm and sales to other farmers. Program theory suggested that we should see a decline in pumping use overall, but the impact on water use on farms and on sales could be mitigated through various factors. We also examined the impact of this policy change on a set of secondary impact variables that included changes in cropping patterns and crop output.