Removing rationing: Power consumption and groundwater monitoring in South India

Abstract

In most Indian states, electricity for irrigation is unmetered but rationed through limited daily supply hours. This study estimates the impact of the 24-hour agricultural electricity policy implemented in Telangana state in 2018, which effectively removed this rationing. Using a district-level monthly panel on agricultural power consumption in Telangana and boundary districts in neighboring states, we find a 53 % increase in agricultural power consumption in Telangana in the two years following the policy, a result that is consistent with a sharp increase in the area under water-intensive rice cultivation in Telangana relative to neighboring states. However, an analysis of detailed groundwater depth data from government monitoring wells, using a geographic difference-in-differences design, reveals no statistically significant change in measured groundwater levels or in the incidence of dry wells. We argue that these seemingly contradictory outcomes stem from limitations in the monitoring framework, which fails to capture water availability in farmer wells in regions with fragmented hard rock aquifers. Our findings highlight that unrestricted power supply can lead to substantial inefficiency in electricity and groundwater use, while official monitoring systems may fail to capture the full hydrological impact. This has important implications for both energy and groundwater policy in South India and other regions with similar hydrogeology.