In India, the government offers agricultural power subsidies equivalent to 85 percent of the average supply cost to promote agricultural production and foster economic growth, particularly among impoverished rural communities. Some states, like Andhra Pradesh, provide free electricity.

Output subsidies in India, guaranteeing crop purchase above market rates, have significantly contributed to the depletion of water tables. These policies have resulted in a 30 percent overproduction of water-intensive crops, with the state of Punjab experiencing a 63 percent decline in groundwater tables due to rice procurement. In Madhya Pradesh, wheat procurement between 2007–2016 led to a 5.3 percent increase in dry wells and a 3.4 percent increase in deep tubewells.

In India, 70–80 percent of irrigation-dependent farmers rely on groundwater. There is a correlation between intensive irrigation — often powered by free or highly subsidised electricity — and increased income for farmers.

The government’s 2017 Central Ground Water Board report identified 1499 units in six states as ‘overexploited’ or ‘critical’. The findings highlight the danger of dependence on groundwater and environmental challenges caused by agricultural practices.

To tackle declining groundwater levels, the government must reassess power and water subsidies and implement a targeted program addressing the groundwater recharge problem, especially in the northern regions of India where aquifers are drying up.