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Spilling Over : The Benefits of Public Works Projects for Groundwater in India
Depletion of groundwater is a major challenge in India. This paper examines how a major rural public works program (Mahatma Gandhi National Rural Employment Guarantee Act of 2005) that financed the construction of surface water infrastructure that may have plausibly increased aquifer recharge rates impacted groundwater levels. Using a difference-in-differences approach on the staggered and heterogeneous rollout of the program, the paper shows that groundwater levels increased after its implementation. These increases were concentrated in states that constructed the largest number of program-financed surface water projects. The observed increases in groundwater appear to have led to increases in the irrigated area of high-value crops and greater overall irrigation during the dry season.
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