Supply of electricity to the agriculture sector for pumping groundwater is heavily subsidised in India. Hence, this paper helps in finding the impact of subsidised electricity policy by fitting water response function and valuing of groundwater under conjunctive use. From the study it is found that the surface water utilisation is declining by increasing groundwater in the conjunctive use. It influences the Value of Groundwater (VG) and Stabilisation Value of Groundwater (SVG). VG and SVG are increasing with the decrease in electricity prices and surface water availability, indicating that groundwater is going to be replaced instead of supplementing for surface water.
Keywords: electricity pricing, conjunctive use, India, value of groundwater, stabilisation value of groundwater, SVG, irrigation tanks, semiarid regions, agriculture, electricity policy, subsidies, surface water