STAGE I – FOCUS ON REFORMReform doe

STAGE I – FOCUS ON REFORM
Reform does not necessarily mean abolishing perverse subsidies and incentives that sanction and even provide incentives for groundwater depletion.
Abolishing subsidies altogether may involve unacceptable political costs.
But there are opportunities to rationalise subsidies that minimise their distorting effects.
The Barind experiment in Bangladesh is one example of organising smallholder groundwater irrigation with minimal scope for perverse incentives (Box 9).
The Gujarat experiment with farm-power rationing suggests a second-best option (Box 10).