India’s water crisis is no longer a spectre of the future; it is a daily reality. As the summer of 2025 looms, farmers from Punjab to Tamil Nadu brace themselves for parched fields while urban residents grow anxious about taps running dry. Beneath the cracked earth and empty rivers lies an even more alarming threat: the relentless depletion of groundwater—the lifeline of Indian agriculture and rural drinking water supply. While government schemes like the Jal Jeevan Mission (JJM) and Atal Bhujal Yojana (ABY) attempt to address the issue, funding constraints and implementation delays continue to undermine progress. India’s groundwater situation is precarious. It provides 80% of rural drinking water, 50% of urban drinking water, and nearly 90% of water used in agriculture, yet our extraction rate has soared to unsustainable levels. The average groundwater extraction rate now stands at 60%, with states like Punjab and Rajasthan exceeding 150%, a dramatic rise from 32% in 1995. Despite significant government spending on water programs, groundwater is being consumed faster than it is replenished, turning a renewable resource into a diminishing asset. Policy Gaps and Financial Hurdles The Atal Bhujal Yojana (ABY), launched in 2020, was a step in the right direction. It focused on community-led water security plans and incentivised water-saving practices in seven states. However, only 57% of allocated funds have been released, and just 48% have been utilised as of early 2025. While technical targets such as equipment installation have exceeded expectations, only 21% progress has been made on actually reducing the rate of groundwater decline—the scheme’s core objective. The finance exists, but not the fluidity needed for results. The financial bottlenecks are systemic. Centrally sponsored schemes like JJM and ABY follow a cofunding model, requiring states to match funds. Yet, as of February 2025, only 31% of the central share for JJM was released, primarily because states could not mobilise their share or demonstrate fund utilisation. This rigid model penalises less wealthy states and reinforces regional disparities. Moreover, implementation suffers from terrain challenges, cost overruns, and delays in statutory clearances, pushing deadlines further into the future. Rethinking How We Fund and Govern Water A fresh financial approach is required—one that matches the complexity and urgency of India’s groundwater crisis. First, the government must expand interest-free loans to states for capital expenditure, a policy already in place but underutilised for water conservation. Currently, a fraction of the Rs 1.5 lakh crore allocated for capital assistance is earmarked for groundwater projects. Earmarking a dedicated groundwater resilience fund within this corpus could ensure states with limited fiscal space are not left behind. Second, we must explore innovative financial instruments. For instance, Green Bonds could be issued specifically for groundwater recharge and rainwater harvesting infrastructure. These bonds can attract private and international climate finance, especially when tied to performance metrics like aquifer recharge levels or reductions in water table decline. Involving corporate CSR funds and impact investors—as seen with partial success in the Clean Ganga Fund—can also bring in alternative capital flows, provided there is better transparency and datasharing. Third, a pricing rethink is long overdue. Free electricity for agriculture has incentivised water-intensive crops like paddy and sugarcane, worsening groundwater depletion. As recommended by the Central Water Commission, electricity subsidies must be decoupled from water usage and replaced with direct benefit transfers or incentives for adopting waterefficient practices. Schemes like Haryana’s “Meri Pani Meri Virasat,” which pays farmers to switch crops, should be expanded with adequate financial backing. Finally, groundwater governance must shift from siloed programs to an integrated institutional framework. The 2016 Mihir Shah Committee recommended merging the Central Water Commission and the Central Ground Water Board into a single National Water Commission with multidisciplinary expertise. Nearly a decade later, this remains unfulfilled. Fragmented data collection, overlapping mandates, and lack of accountability continue to plague outcomes. Establishing a digital National Water Resource Information System with real-time data and open access can help track usage, plan recharge, and build trust with funders. The Cost of Inaction Is Too High Sceptics may argue that India cannot afford such expansive financial strategies during economic uncertainty. But the cost of inaction is far greater. Water insecurity affects food production, health, urban development, and climate resilience. The World Bank estimates that water scarcity could cost India up to 6% of its GDP by 2050. Investing in groundwater today is not a luxury—it is economic common sense. Moreover, decentralised groundwater recharge projects create rural employment and reduce climate vulnerability, offering a high return on public investment. India’s groundwater story does not have to be a tragedy. With smart financing, decentralised planning, and political will, the country can reverse the decline and secure its water future. Just as India led the world in scaling up solar power through bold financial models, it can now become a leader in sustainable water governance. Groundwater may be invisible, but the urgency to act cannot remain hidden. Mohapatra and Mitra with IIT Jodhpur and NCAER New Delhi, respectively. Views are personal.