The dramatic increase in plastic film mulching in water-efficient agriculture is primarily due to its versatile nature that has proven to be very beneficial over the last decade in the arid region. However, as carelessly used plastic mulch films lead to agro-environmental pollution, there has been vigorous research recently to develop degradable film materials for mulching. This review describes the use of plastic film for mulching in water-efficient agriculture practices with special reference to progress made in degradable film materials. Moreover, this review includes water-efficient mechanisms and techniques of mulching film cultivation, photodegradable and biodegradable plastic polymers (PHA, PCL etc. synthetic- and natural-based polymers films), their degradation process and developmental deficiencies, and an outlook of degradable film materials. There exists great potential for the further development of water-efficient agriculture; however, it is dependent upon effective research and the wide-spectrum applications of degradable film materials.