Coastal Displacement in the Indian Subcontinent: Policy Analysis

The anthropogenic forcing of greenhouse gases has turned out to be a dominant force propelling sea level rise. Sea levels in the 20th century have been rising at an average rate of 0.06m per decade.¹ The Indian subcontinent is highly vulnerable to threats arising from sea level rise given its demography. The country has a coastline that runs for 7,500 square kilometres. These coastal regions are home to about 170 million people.² Between 1996 and 2016, approximately 236 square kilometres of land was lost to coastal erosion placing people’s livelihoods in jeopardy. Based on a government report published in 2016, around 45.5% of India’s coastline has been affected by erosion of varying magnitudes.³ The coastal erosion problem is a complex effect of various natural processes working in the coastal zone and sometimes beyond it. According to recent scientific predictions, 36 million Indians are likely to be living in areas experiencing chronic flooding by 2100.⁴ Increasing climate-induced calamities and accelerating levels of erosion have called for intervention and support from the government in securing the livelihoods of coastal communities.  Existing policies in the country address displacement from rapid-onset disasters such as monsoons and cyclones under disaster reduction and rehabilitation policies. However, displacement due to slow-onset disasters such as coastal erosion are yet to find a place at the policy level. With the intensity and frequency of disasters increasing in the future, we require a foresighted national-level policy on managed retreat and adaptation in India. This paper analyses existing policies and suggests possible adaptation interventions that will help the nation deal better with the problem of coastal displacement. 

We realize that coastal erosion is an extensive and multi-dimensional problem for a vast country like ours. The Indian government has put in place policies, laws and committees to tackle climate change and climate-induced disasters. The main policy measures concerning coastal protection and management in India include the Disaster Management Act of 2005 that has a section dedicated to coastal protection and disaster management and the west coast policies to tackle coastal erosion. The Act provides for the establishment of several statutory bodies such as the National Disaster Management Authority, State Disaster Management Authorities and District Disaster Management Authorities. It also includes advisory committees, executive committees and sub-committees under the government. The Act lists out the action plan for governments during or post a rapid-onset disaster. It also puts together provisions that allow for the creation of relief funds and their usage during emergencies. The act is inadequate along several lines. The presence of numerous committees and the overlap of duties among authorities mentioned in the Act greatly reduces accountability. Further, the coordination among these bodies appears to be very cumbersome. Disasters cannot be effectively dealt with only through the government’s administrative setup. Even then the role of local authorities and communities in coastal management and protection has been greatly overlooked. The Indian Act also fails to recognize the need for identifying and using traditional knowledge and working together with NGOs.

Efforts are being made to counter the menace of coastal erosion and protect our coasts using both traditional approaches ( hard structures like Seawall, etc.) and the new, innovative soft measures like dune rehabilitation. Policies to curb coastal erosion on the west coast of the country have dealt with structural or hard measures such as the construction of seawalls, revetment, offshore breakwater, groynes/spurs and soft measures like offshore reefs and artificial headlands. Soft measures are usually more effective in the long run when compared to hard measures. Seawalls and other coastal engineering structures end up obstructing the littoral drift of sand and sediment, thus, causing erosion on the northern side and accretion on the southern side of the structure. In the end, they do not prevent erosion as they only transfer the problem further north of the east coast.⁵ The impact of these hard options on neighbouring coastlines create a situation where hard structures are then required in these new areas creating a vicious cycle. An example of such a spiralling effect is the seawall construction in Kerala  (a state government initiative to curb coastal erosion) and its impact on Karnataka’s coastline. The Kerala government has spent around 310 crores building seawalls along its coast.6 Of the 560 km coastline of Kerala, the state has constructed a seawall for 386 km. The government had sought funding assistance to wall the remaining 92 km and demanded INR 2.16 billion from the Centre. Seawalls along the coast of Kerala did help in preventing coastal erosion but as mentioned earlier the littoral drift was obstructed, accelerating erosion rates of the coastline along the state of Karnataka. Groynes suffer from a similar limitation. These man-made structures protruding into the oceans are known to cause accretion on the southern side and erosion on the northern side. Beach nourishment has proved attainable by methods of re-vegetation with temporary offshore breakwaters/artificial reefs. Artificial reefs provide shelter, food and other necessary elements for marine biodiversity to flourish. 

The west coast policies and the Disaster Management Act (2005) focus on mitigation measures mainly undertaken by the government thus alienating local communities from related coastal work. It is important to shift our focus from mitigation to adaptation. Intervention and policies for adaptation are extremely crucial given two main reasons. We cannot mitigate sea-level rise. Even if we drastically cut down emissions, experts concluded that global mean sea-level would rise at least 8 inches (0.2 meters) above 1992 levels by 2100. With high rates of emissions, sea-level rise would be much higher but was unlikely to exceed 6.6 feet higher than 1992 levels. Hence, it is more important to facilitate adaptation than mitigating impacts of sea-level rise. Adaptation policies focusing on alternative livelihoods, social security nets, preemptive retreat and social infrastructure will greatly enhance the resilience capacity of communities thereby enabling better response to a crisis. Existing policies in India address post-disaster management or displacement stemming from rapid-onset disasters but displacement due to slow-onset disasters such as coastal erosion is yet to find a place in Indian policy. Slow onset events are impacting lives and livelihoods leading to the weakening of a community’s resilience. It is important to identify vulnerable areas and build the capacity of local communities to efficiently manage future crises and prevent large scale life and material loss. The second reason comes from the unpredictability that haunts us. Climate change is complex because every system disturbance sets in motion positive and negative feedback. Interactions of various levels create unpredictable events and large scale destruction. The unpredictable nature of climate change and lag is a lesson to build resilience rather than focus on measures that only handle rehabilitation post-disaster. 

Shining a ray of hope on this oncoming crisis is the National Centre for Sustainable Coastal Management (NCSCM), Ministry of Environment, Forest and Climate Change, focusing on better protection, conservation, rehabilitation, management and policy design of the coast. NCSCM aims to support integrated management of coastal and marine environments for livelihood security, sustainable development and hazard risk management by enhancing knowledge, research and advisory support, partnerships and network and coastal community interface. NCSCM has the resources for data monitoring and the mission has started on a good note by tackling the issue of defining High Tide Lines (HTL) and putting forward revised regulations for keeping a check on polluting industries/activities and construction activity along critical coastal areas. Though the vision of this institutional regime is applaudable, little has been done on the ground. The notification though uses terminologies like sustainable development, sustainable livelihood, ecologically and culturally sensitive coastal resources, fails to detail the implementation strategies for each of them.⁷ The mission stands great potential in developing into the institutional setup that India needs in developing and implementing adaptation interventions. However, this is conditional on its alignment with the Millennium Development Goals on environmental sustainability and its focus on the long term impacts of all developmental work in the coastal zones of the country. 

Coastal communities are directly impacted by climate impacts causing declining productivity of fisheries and cultivation lands along the coasts. Existing measures do not help communities in dealing with economic losses. Understanding threats to the economic and social well being of the communities underlines the need for adaptation policies that will help reduce the climate vulnerability of communities and enhance their ability to flexibly adapt to changing conditions. Policies which create alternate livelihood opportunities, social infrastructure, planned retreat, and community involved coastal management need to find a place in India’s climate legislations.

The views expressed in the post are those of the author and in no way reflect those of the ISPP Policy Review or the Indian School of Public Policy. Images via open source.


  1.  Rahmstorf, S. (2008, July). The 5 Most Important Datasets of Climate Science.
  2. Panda, A. (2020, May 26). Climate change, displacement, and managed retreat in coastal India – India. ReliefWeb.’s%20more%20than%207%2C500%20square,related%20to%20sea%2Dlevel%20rise.&text=Beyond%20displacement%20and%20migration%20along,relocation%20in%20major%20coastal%20cities
  3.  Status Report on Coastal Protection & Development in India Central Water Commission New Delhi .(2016).
  4. NOAA (2020, August 14).Climate Change: Global Sea Level | NOAA
  5. Masselink, G., & Lazarus, E. (2019). Defining Coastal Resilience. Water, 11(12), 2587. MDPI AG. Retrieved from
  6. Warrier, S. G., Aggarwal, M., Aggarwal, M., Sarkar, S., Sarkar, S., Padmanaban, D., … Gopal, S. (2016, November 9). Walls can’t keep out the sea in Kerala. India Climate Dialogue. 
  7. Krishnamurthy, R., DasGupta, R., Chatterjee, R., & Shaw, R. (2014). Managing the Indian coast in the face of disasters & climate change: A review and analysis of India’s coastal zone management policies. Journal of Coastal Conservation, 18(6), 657-672.
  8. E. Vivekanandan. Impact of Climate Change in the Indian Marine Fisheries and the Potential Adaptation Options. 
  9. Barua, Prabal & Rahman, Syed. (2018). Community-based rehabilitation attempt for solution of climate displacement crisis in the coastal area of Bangladesh. 1. 358. 10.1504/IJMRM.2018.10016042. 
  10. Inti Carro, et al.,(2012, August 18) Building capacity on ecosystem-based adaptation strategy to cope with extreme events and sea-level rise on the Uruguayan coast ISSN: 1756-8692 Publication date:
  11. Climate Change Adaptation in Fisheries and Aquaculture: Compilation of initial examples, FAO Fisheries and Aquaculture Circular No. 1088, Clare Shelton,ISSN 2070-6065
  12. Podesta, John. (2019, September 4)“The Climate Crisis, Migration, and Refugees.”
  13.  Alongi, D.M. Mangrove forests: Resilience, protection from tsunamis, and responses to global climate change. Estuar. Coast. Shelf Sci. (2008), 76, 1–13
  14.  Das S (2009) Addressing coastal vulnerability at the village level: The role of socio-economic and physical factors. Working paper series No. E/295/2009. 
  15. Alongi, Daniel. (2002). Present State and Future of the World’s Mangrove Forests. Environmental Conservation. 29. 331 – 349. 10.1017/S0376892902000231.
  16. Kantamaneni, K., Sudha Rani, N. N. V., Rice, L., Sur, K., Thayaparan, M., Kulatunga, U., Rege, R., et al. (2019). A Systematic Review of Coastal Vulnerability Assessment Studies along Andhra Pradesh, India: A Critical Evaluation of Data Gathering, Risk Levels and Mitigation Strategies. Water, 11(2), 393. MDPI AG. Retrieved from
  17. Barua, Prabal & Rahman, Syed & Molla, Morshed. (2017). Sustainable adaptation for resolving climate displacement issues of south eastern islands in Bangladesh. International Journal of Climate Change Strategies and Management. 9. 10.1108/IJCCSM-02-2017-0026.
  18. Ministry of Environment and Forests (Department of Environment, Forests and Wildlife). (2011, Jan 6).Coastal Regulation Zone Notification.

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In the 1860s, England was facing an acute shortage of coal. Some experts contended that improving technology would reduce coal consumption. But contrary to this, technological improvements that increased the efficiency of coal led to the increased consumption of coal in a wide range of industries. English Economist William Stanley Jevons argued that technological progress could not be relied upon to reduce resource consumption. Maharashtra is facing a similar issue in 2020 with water.

The Paradox of water

In 2014, the then Chief Minister, Devendra Fadnavis, launched a flagship project to make rural Maharashtra drought-free. The program aimed to make 5000 villages free of water scarcity every year. Nearly 52% of the state’s geographical area is prone to drought, either naturally or due to poor rainfall. The project targeted strengthening and streamlining existing water resources like canals, bunds, and ponds by arresting maximum run-off rainwater during the monsoon. The key aim of this project, Jalyukta Shivar Abhiyan, was to establish the belief in a farmer that “every drop of rainwater is owned by me and it should percolate on my land”. Despite the efforts made by the State Government and several NGOs working in the sector, the groundwater level has continued to decrease in 245 Talukas since 2014-15.

Despite a lot of work and spending more than 9000 crores on the supply-side of water, villages are still facing drought-like scenarios. This is mainly due to unprecedented rates of extraction, the sudden availability of abundant water leading to use of more water and erratic rainfall. 

This is a classic example of Jevon’s Paradox. The fault lies not with the farmers but with the policy’s design and implementation. Jevon’s paradox is a widespread phenomenon that most of us have experienced at some point or the other. For example, when we get a salary increment, we end up saving the same amount or sometimes even less than before.

Indian laws treat water as private property. It is often attached to the land. As a result, only a privileged few have access to groundwater. There is a limit to harvesting water in any location.  With only 23% irrigated land, Maharashtra is heavily dependent on the monsoon. Due to climate change, rainfall is also becoming erratic. Despite this, the areas under sugarcane plantations, a water-intensive crop, are increasing every year. If this continues, we will see a huge crop failure and mass migration in the coming years.

Farm pond after rains. Credits: Narendra Kulkarni

Understanding the Water Bank

To address this the focus needs to shift from the supply-side to the demand-side of water. Implementation of water budget plans can help to deal with this challenge. The preparation of village water charts, water budget, aquifer mapping and their management was proposed back in the Maharashtra Groundwater Act, 2009. 

Water budgeting is similar to balancing a bank account. In simple terms, the water budget is a process of calculating water requirements for overall different needs (domestic, irrigation, etc.) against the total water available from different sources (eg: rainfall, groundwater).

Managing water is similar to managing finances. First, similar to knowing how banks and money work, villagers need to know how aquifers and groundwater work. To understand this a 3D model of topography and aquifer map can be made available for all villages. This map can be used to convince villagers to look at groundwater as a common good.

Secondly, managing finances requires information about the inflow and outflow of money. In the same way, villagers need to measure rainfall, water level and its use. In order to achieve this, villagers should be trained in making rain gauges and measuring and maintaining the rainfall record. There is also a dire need to spread awareness about the water requirements of different crops. Water availability and water requirement of different crops will help villagers plan their crop cycles to maximise profits giving first preference to drinking water.

Finally, like a bank manager, we need to develop local leadership who will act as watershed managers. These managers need to be educated about the benefits of the water budgeting process and have the capacity to have systematic, well-planned discussions with all stakeholders to make water budgets implementable.

With climate change looming around the corner, the government needs to relook at the water crisis at the earliest. A good start would be implementing the Maharashtra Groundwater Act and incentivising water-efficient crops.  We need to realise that if this crisis continues and the water banks fail, no one will be able to bail us out, as in the 2008 financial crisis.


WoTR. (2020b, March). Water Stewardship and Water Budgeng: A Pathway to manage the water available in a me of growing water scarcity in rain fed Maharashtra. Retrieved March 31, 2022, from 

WoTR. (2019). Water Budgeting Tool for improving water governance at local level. Retrieved March 31, 2022, from 

Paani Foundation. (2016, June 1). Water Budgeting [Video]. YouTube. 


Agriculture is the mainstay sector of India’s economy and uses 60% to 90% of the available water, depending on climate and economic development of the area2. With increasing pressure on agricultural land and water resources it is estimated that to satisfy food demand in 2050, the world’s agricultural production must increase by 70% and water usage should increase by 50% in developing countries and 16% in developed countries2. Yet in the current scenario about 53% of the net sown area in India remains unirrigated3 and the situation is deteriorating due to over-exploitation of water and climate change effects. With the current trends, India is bound to enter a phase of crisis characterised with food insecurity and climate change effects with no panacea. 

In this light, solar water pumps have emerged as a reliable, cost effective technology to increase energy access for sustainable agriculture. They have become a better alternative to electric and diesel pumps owing to rising diesel prices and vulnerable situations of electricity in India. The benefits of SWPs are globally acknowledged and their economic viability and feasibility have made them a top choice on the large ranches of the Western US, Mexico, Australia and Canada4. SWPs can particularly prove to be a boon in the interiors of the country with no electricity access and excessive dependence on rain water. The benefits of SWPs in comparison to commonly adopted electric/diesel pumps is elucidated in table 1.

Table 1: Comparison between solar water pumps and electric/diesel pumps

ParameterSolar water pumpsElectric/diesel pumps
CostLow operating and maintenance costsHigh and recurrent variable costs due to fuel and maintenance cost. 
High fixed costs. Requires water storage tank as well as batteryLower fixed costs
ReliabilityReliable source as can be accessed in remote areas of the country with no access to electricity or diesel. Unreliable source due to lack of electricity supply and rising diesel costs
Region specific intermittency issues during windy and cloudy weather Intermittency issues due to unreliable electricity supply
Environment friendlyEco-friendly and sustainable alternative to electric and diesel pumpsUse of fuel causes pollution and leads to environmental degradation
Disposal can cause pollution; overexploitation of groundwater is also possible with SWPs Disposal can cause pollution; overexploitation of groundwater is possible.
RevenuesEconomically beneficial to farmers as it helps in increasing productivity. Farmers can also earn extra money by selling excess energy to the grid. Cannot generate additional sources of income for the farmers.
InstallationEasy installationDifficult installation

Realising the comparative advantage of solar water pumps over other common methods of irrigation in India, the Central government has given a strong focus to solar pumps by launching schemes under the Ministry of New Renewable Energy. In 2014, the Jawaharlal Nehru National Solar Mission (JNNSM) set a solar energy target of 100 GW by installing a total of 10 lakh solar pumps by 2022. Moreover, in 2019, Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) scheme was launched with three key components i) installation of 10,000 MW of solar power capacity on barren land with capacity up to 2 MW; ii) installation of 1.75 million stand-alone off-grid solar pumps; and iii) “solarization” of 1 million existing grid-connected irrigation pumps5.

In response to Central government schemes, at the state level, in 2016, Government of Haryana initiated a policy of providing 75% subsidy on solar water pumps (SWPs) with the dual objective of sustainable irrigation and climate change mitigation. Within the scheme, Haryana has set an ambitious target of installing 50,000 SWPs by 2022. According to the Scientific Engineer at the Department of New and Renewable Energy, out of the given target only 10,550 pumps have been installed in the state since 2016. In addition, against the target of 15,000 pumps in 2020-2021, only 7,500 pumps were installed in the year 2020. This low adoption of the technology raises serious concerns regarding the deployment of SWPs. Number of farmers who applied for the scheme continue to remain low in the state while for the farmers who did apply for the scheme receive the benefits after one year at the end of the agriculture season. Hence, it is important to study and raise questions regarding states’ approach as well farmers’ view on the technology.

With this objective, this paper undertakes the case study of Rewari district in Haryana to critically analyse the on-ground deployment of SWPs at the state and district level. This paper defines sustainable deployment as achieving social, economic and environmental welfare for the present and the future generations. The study chose Rewari district as it is an agrarian economy with 30.4% of its workforce working as cultivators6 and represents a typical district in the state with dominance of rural population and agriculture. To understand sustainable deployment of SWPs a survey of 269 farmers in Rewari district was conducted along with interviews of various state and district level officials. The findings of the survey have been evaluated through 4 key determinants 1. Supply side factors 2. Economic viability for farmers 3. Social acceptability of farmers 4. Environmental sustainability.  

Based on the research, the paper is divided into 4 sections. The first section of the paper provides information on the policy of SWPs in Haryana. The second section of the paper discusses the agriculture situation in Rewari based on the survey of 269 farmers. The third section of the paper analyses the survey, interviews and field visits to discuss the scope and implementation of SWPs based on the aforementioned key determinants. The final section makes suggestions and policy recommendations.

Haryana growing interest in SWPs 

Interactions with the officers from the Department of New and Renewable Energy department revealed that in 2015, with just 522 MW of installed renewable power capacity, Haryana was lagging behind its neighbours such as Rajasthan, Uttar Pradesh and Punjab. Hence, with the endeavour to achieve climate change goals and double farmers income by 2022, Haryana government decided to provide 75% subsidy to off-grid solar water pumping system in 2016. The first phase of the scheme was implemented in 2016-17 in the safe blocks of Shalawas in Jhajjar where 2HP and 5HP solar pumps were available to the farmers. In 2017-18, phase 2 was launched in 23 safe blocks of Ambala, Bhiwani, Hisar, Jind. Jhajjar, Mewat, Sonipat and Rohtak. Since 2018, the scheme has been implemented pan-Haryana across all districts and blocks. In 2018-19, farmers could avail 3HP and 5 HP pumps while the  capacity of the available pumps was increased to 3 HP to 10 HP in 2019-2020. The tentative costs of various types of SWPs is indicated in table 2. 

Table 2: Tentative cost, tentative quantity and user share of the SWPs in Haryana 

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The cost of the solar pumps includes 1. Accessories 2. Delivery to the farmer’s field and installation 3. Guarantee for maintenance and repair up to 5 years. The Department of New and Renewable Energy is the nodal department to implement this scheme across the state. At the district level, the Renewables Department under the chairmanship of the Additional Deputy Commissioner is the nodal agency for the scheme. Interaction with the project officer of Renewables Department in Rewari revealed that the application system is entirely online wherein a farmer who wants to avail the scheme submits the application via with the following documents 1. Aadhar card 2. Jamabandi  of the agriculture land 3. Details of Micro irrigation system installed 4. Details on farm pond. Once the application is submitted, it is scrutinized online by the District Project Officer of the Renewables Department who makes sure that the farmer meets 2 eligibility criteria for the subsidy 1. There is no existing grid supply and 2. Applicants should belong to the Water User Association, Gaushala, Community/cluster based irrigation system or should be a small/marginal farmer. In order to minimize the water usage for irrigation purposes, preference is given to the farmers using micro irrigation systems or who opt for micro irrigation systems. The size of pump is selected on the basis of the water table in the area, land covered and quantity of water required for irrigation. 

Upon approval, applications are sanctioned online by the office of Additional Deputy Commissioner (ADC) and all the sanctioned applications are reflected on the state portal. The installation of the SWPs is centralized in the state as 6 firms are empanelled at the state level through a tender process which was called by the Ministry of New and Renewable Energy. Transparency is maintained as each movement in the application is informed to the citizen through SMS. Accountability is also ensured as citizen feedback is taken on the application process through IVRS (Interactive Voice Response System) calls and citizens can lodge complaints through a state helpline number. 

Since the scheme is still in its initial phase, the government has set district wise targets for installation of SWPs. Following the state level targets in 2020, the eligible applications (1457 till April 2020)  have exceeded the district’s target of 1275 and the final allocation will be decided by an open lottery by the ADC’s office. However, none of these 1457 applications were processed in Rewari in 2020 and no review has been done since 2018 on the use and quality of SWPs. This creates a need to step back and break down the policy to ensure a better and sustainable deployment of solar pumps in the district. The following section elaborates on the methodology used in the research paper. Based on this, this paper will analyse two aspects on SWPs 1. State level factors affecting the deployment of SWPs 2. District level factors affecting the deployment of SWPs.  


Three research approaches have been used for the research paper 1. Semi structured interviews with state and district level stakeholders responsible for deployment of SWPs 2. Survey of 269 farmers across 5 blocks in Rewari district 3. Literature review. The research methodology has been chosen to achieve 3 objectives 1. To understand district level factors affecting the deployment of SWPs 2. To understand state level factors affecting the deployment of SWPs 3. To make recommendations to improve deployment of SWPs.


A survey of 269 farmers was conducted in the Rewari district to understand farmers’ perspectives on SWPs. With dominance of the agriculture sector plagued by issues like lack of electricity, low water table, low farmers income and low penetration of sustainable technologies, Rewari is analogous to any other district in the state and its findings can be useful in understanding larger farmers perspective on sustainable deployment of the technology. To conduct the survey, a Google form based questionnaire was designed and support from 6 Saksham Yuvas was taken.1 Saksham Yuvas went across the 5 blocks of Rewari to survey the farmers over a span of 1 month. They were trained to use Google forms and Excel for the survey. The questionnaire discussed the following themes 1. Household demographics 2. Income and spending 3. Land profile, mechanization level and cropping pattern 4. Awareness about agriculture and climate change 5.Challenges faced in agriculture and irrigation 6. Access to finance. To ensure any gaps in the data are filled, telephonic calls were made by Saksham Yuvas to the farmers to complete the data. The final cleaning of the data and its analysis was done using MS Excel. 

There was a deliberate attempt to ensure that farmers from various income brackets, age, spending patterns, cropping patterns and irrigation type are surveyed to make the findings holistic. Hence, all Saksham Yuvas were provided a list of selected farmers based on the data provided by the District Renewables Department. Sample size involved two broad categories of farmers 1. 211 farmers dependent on electric pumps, diesel pumps or rainfed irrigation 2. 58 farmers using SWPs.

Table 3: Demographics profile of the sample Demographic characteristics of the respondentsDistribution in sample
1.Age Below 25%- 13%; 26 to 40- 29%; 41to 65: 59%; above 65- 10%
2.Size of land holdingLess than 1 acre- 10%; 1to 5 acres-65%; 5 to10 acres-19%; above 10 acres: 6%
3.Block wise dist.Bawal- 9%; Jatusana-13%;Khol-18%; Nahar-39%; Rewari-22%
4.Income/yearLess than 50k-41%; 51k to1.5L-36%; 1.6L to 2.5L-16%; more than 2.5L-7% (average: Rs. 88,000)

Stakeholder Interviews 

Three semi-structured interviews were conducted to understand the government perspective on sustainable deployment of SWPs: 1. Project officer of Rewari’s Renewables Department 2. Sub-Divisional Officer of district Agriculture department 3. Scientific Engineer of the Department of New and Renewable Energy, Haryana.  The objective of the interviews were: First, to understand the policy, process of applying and processing applications on SWPs in Haryana. Second, to understand the agriculture and irrigation scenario in Rewari. Third, to analyse the perceptions of the stakeholders regarding the current deployment of SWPs and factors affecting their deployment. Fourth, to explore the solutions for sustainable irrigation in Rewari. All the interviews focused on asking qualitative questions along with analysing the quantitative back-end data from an online portal to avail the pumps scheme called ‘Antyodaya Saral’.  

Literature review

Given the multidisciplinary focus of the research, literature review was conducted to define and identify factors affecting the economic viability, environmental sustainability and social acceptability of SWPs. Literature review was also conducted to understand the national and state level policies on SWPs to substantiate the findings from surveys and interviews. The relevant literature was critically analysed to assess key parameters for sustainable deployment of the technology. However, since there is lack of literature indicating farmers perspectives on SWPs in India, this paper depends on the survey and interviews to a larger extent compared to literature review for analysis and recommendations. 


The research suffers the following limitations:

  1. Answers on farmers’ income and expenditure may be influenced by biases. This has also been re-iterated by the agriculture department during semi-structured interviews.
  2. The survey and analysis is restricted to Rewari district. While the analysis can be applicable to the entire state and even the country, every region is different in terms of its agriculture and irrigation situation which needs to be taken into account while using the findings from this research. 

Agriculture in Rewari district

A survey of 269 farmers across all the 5 development blocks of Rewari district (Khol, Bawal, Rewari, Jatusana and Nahar) was conducted to understand their perspective on the agriculture situation. While Rewari is an agriculture dominant district only 1457 applications have been submitted on Antyodaya Saral and none of the applications were processed in 2020. This limited uptake of solar pumps by farmers raises important questions about the views of farmers regarding the technology. While there is literature which looks at the perspective of policy makers and market stakeholders, there is a glaring gap on the need to understand the views of the end users themselves. Thus, the objective of this paper is to break the top-down approach to understand farmers perspective, their irrigation needs, their prevailing expenditure on irrigation, choice of pumping technology and their challenges in agriculture. Following are some of the key insights from the survey which are relevant for the research:

  1. Cropping pattern: Food crops (Wheat and Maize), cash crops (cotton) and horticulture crops (fruits and vegetables) are the most common crops in the district with food and cash crops being the most popular. In addition, multiple cropping is prevalent in the district. Crops grown in the district are less water intensive which are largely governed by low water tables leading to lack of water availability. 

Figure 1: Crops produced in Rewari district


  1. Level of farm mechanisation: Rewari has a high level of farm mechanisation wherein 89% of the farmers in Rewari use some level of farm machines like tractors, harvesters and threshers. Tractors are the most widely adopted mechanisation technology as 87% of respondents use it.

              Figure 2: level of farm mechanisation in Rewari district 

  1. Irrigation: A close analysis indicates that farmers have access to some form of irrigation with only 2% of the farmers depending on rainfall. Most popular irrigation technologies are 1. Electric pumps (63%) 2. Solar with electric pumps (14%). In terms of SWPs, 80% of the farmers use 5HP alternate submersible pumps. This pump is popular in the district because, until 2018, pumps of 5HP capacity were provided by the government. Since 2019, higher capacity pumps are also being provided and data analysis indicates that in 2019, 60% of the applicants applied for 7.5 HP or 10HP pumps through the Saral portal. These irrigation technologies are commonly used with sprinkler and drip irrigation.

To further understand if irrigation is a big issue for the farmers in Rewari, farmers were asked about the key barriers to agriculture production where insufficient irrigation, land degradation due to industrialization and smog emerged as top three impediments to agriculture productivity. More than 81% of the farmers reported insufficient irrigation and limited water availability as a significant barrier to agriculture production specially in Khol, Rewari and Jatusana block.  

Figure 3: Irrigations technologies used by farmers in Rewari district

  1. Farmers income: Rewari district mainly comprises small and marginal farmers who have an average income of Rs.88,000/annum. Also, an average farmer’s agricultural holding in Rewari is between 1-5 acres. This limits farmers’ capacity to afford expensive technology or agricultural inputs. 

In continuation with the aforementioned, the next section of the paper dwells on unfolding various other aspects from the survey to categorize and identify parameters affecting sustainable deployment of SWPs. To understand this, this paper discusses two crucial aspects 1. Supply side factors for deployment of SWPs in Haryana – State perspective. 2. District level analysis for deployment of SWPs based on economic viability, social acceptability and environmental sustainability.  

Sustainable deployment of SWPs

  1. Deployment of SWPs: state level analysis

Only 182 pumps have been deployed in Rewari since 2016 and indicate larger concerns on the supply of Solar pumps in the state of Haryana. Unavailability of SWPs themselves hampers the scope of discussing their sustainable deployment. In addition, efforts for demand side push without adequate supply is leading to market failure. The government needs to reflect on the supply side push before pursuing aggressive IEC (information, education and communication)  to increase the demand. 

Interaction with engineers at the Department of New and Renewable Energy reveals that 6 firms have been empanelled to install SWPs in the state. To promote ‘Make in India’ campaign firms producing SWPs using indigenous components are given the tender. However, the average time for installing SWPs in the state is 1 year as there is a lack of monitoring, review and feedback mechanism to ensure timely and efficient implementation of the policy. Moreover, policy on SWPs requires coordination between different levels of government. An application for a solar water pump is scrutinized at 3 levels before approval. At the district level the application is processed by the Project Officer and Additional Deputy Commissioner’s office while at the state level the application is approved by the Department of New and Renewable Energy. With limited communication channels between state and the district several applications remain unattended with no follow-ups or review. 

Breaking away from the current top-down approach, this paper argues for a bottom-up approach where the communication of district government with the state authorities should be streamlined so that district authorities understand farmers’ perspectives and can provide feedback to the state government based on their review of the policy at the ground level. Farmers will have more faith in the government’s intent and ability to deliver when the government will listen to the beneficiaries and lend them with greater support. Taking the bottom up approach forward the next section provides farmers’ perspective on three determinants of the SWPs policy 1. Economic viability 2. Social awareness and acceptability and 3. Environment suitability. The last section of the paper provides recommendations based on the analysis. 

  1. Deployment of SWPs: District level analysis

2.1 Economic viability: Water pumping is an energy-intensive process and its economic viability reflects the feasibility and prospective trends of buying the technology. Broadly, three parameters define the economic viability of any pump 1. Revenue or income generation 2. Cost (fixed and variable) 3. Comparison to alternative irrigation solutions7. Cost of employing a diesel or electric pump includes the cost of buying the pumps (approx. Rs. 22,000) along with monthly expenses of fuel or electricity usage and maintenance costs (approx. Rs. 2200/month) . With lack of fuel availability the cost of diesel and electricity are likely to increase sharply (despite subsidies on electricity) further increasing the variable costs of using these pumps. In this light, SWPs can be an attractive complementary energy source, especially in areas with adequate sunlight and inadequate access to electricity or diesel. While the capital costs of SWPs are high (approx. Rs. 1,00,000 for 10 HP pump) compared to other pumps, a moderate pumps replacement cost is over 15 years depending on their utilization, post which farmers can use solar water pumps with negligible operation and maintenance cost. In addition, with proper access to market and efficient micro-irrigation technologies to prevent water exploitation, SWPs propagate sustainable irrigation practices with increased productivity and revenues for the farmers.

ParameterGrid electricity powered pumpsSolar water pumps
Capital costsRs. 22,000 Rs. 100000 (10 HP alternate submersible pump)
Operation and maintenance costs2200/monthNo maintenance cost (as per survey conducted)
Life cycle20 years25 years

Table 4:  Cost-analysis between electric pumps and SWPs 

Survey conducted in Rewari district has received mixed responses with respect to the economic viability of SWPs. In Rewari, factors like adequate solar radiance and high availability of banks in the district ensures increased affordability of solar water pumps to the farmers. In terms of income change, 67% farmers in Rewari district have indicated a positive impact on their income after adopting SWPs. Hence, low costs and higher incomes has improved the economic viability of SWPs in the district. On the other hand, a low water table in the district means that only a 7-10 HP solar pump is suitable for the district leading to higher upfront costs. A 7-10 HP SWP should also be coupled with water conversation techniques to prevent any further over-exploitation of water. Moreover, majority of the farmers in Rewari possess an agricultural land of below 5 acres, which further affects their purchasing power and affordability to own SWPs. Hence, innovative financial solutions would be required in the district to facilitate the adoption of SWPs by interested farmers.

Table 5: Factors affecting economic viability of SWPs.

Factors affecting the economic viability of SWPsRelation with SWPsFindings from Rewari district
Favourable factors
Types of crops grownCrops which have less peak daily water needs require a smaller capacity pump leading to lower capital costs7.Wheat, mustard and horticulture crops are popularly grown in Rewari and have low irrigation water requirements. Hence, daily water needs of the farmers are low. 
Efficient irrigation techniquesLow variable cost of SWPs can lead to over-exploitation of water leading to a further decrease in water table. Hence, SWPs are best suited for areas which employ various micro-irrigation techniques. Sprinkler and drip irrigation is used by 98% of the surveyed farmers improving the water use efficiency in the district. 
Quality of the system and maintenance costsFrequent breakdowns, lack of technically trained personnel and availability of spare parts can decrease the feasibility of employing SWPs by increasing the variable cost. Also, breakdown of the system during peak growth season can affect farmers yields7 .Farmers have demonstrated satisfaction on the quality of SWPs as 98% of the farmers have not paid for the maintenance since the purchase of SWPs.  
Cost of alternative solutionsSeveral studies have shown that on a life cycle basis, solar-based irrigation is more economical than irrigation using diesel or electric pumps This is particularly true for remote areas with limited access to fossil fuels or electricity infrastructure7 .A farmer spends approximately 22k on electric pumps with additional monthly variable cost of Rs. 2200. On the other hand, a farmer spends Rs. 83,250 for a 5HP SWP with no additional variable cost. Hence with better accessibility of loan and credit facilities, SWPs can be more economically viable in comparison to electric pumps in the long run. 
Loan and credit facilitiesDue to high upfront costs of solar water pumps despite subsidy, it is crucial that accessibility of pumps is supplemented by loan and credit facilities to improve its affordability for small and marginal farmers. According to the survey, 98% of the solar pumps are owned by wealthy farmers who did not take any loans for SWPs.  In addition, 60% of the  farmers were unaware of the loan and credit facilities in the district. This stands contrary to the information from Rewari’s Lead District Manager who indicated that there is at least 1 bank branch in every 2 villages who have been mandated to raise monthly awareness of loan facilities.
Unfavourable factors
Groundwater availabilityAreas with low water tables require higher capacity solar water pumps which makes its possession difficult for farmers especially, those with financial constraints. Also, pumping in areas with low water tables should be carefully considered as it can lead to a further decrease in the water depth and overexploitation of the aquifer if the recharge is not sufficient. Water table in Rewari is distributed unevenly in the district. Blocks of Bawal and Nahar have sufficient groundwater while Rewari, Khol and Jatusana blocks face water shortages. On an average, the water table in Rewari is at 100 feet which requires  a higher capacity pump (between 7-10HP)for irrigation. This is further exacerbated by lack of surface water sources in the district. 
Scale of farmingScale of farming determines the capacity of the solar pump required, the revenues from cultivation, purchasing power of the farmers ability to access credit facilities and his ability to adopt solar water pumps7.Survey indicated that 66.5% small and marginal farmers cultivate in agricultural land between 1-5 acres while only 21% of the farmers possess land above 10 acres. Hence, farmers in Rewari require additional financial support to afford the high upfront costs of SWPs. 
Access to marketEffectiveness of irrigation and consequent increase in agricultural productivity will increase farmers income only when farmers have access to quality inputs and access to markets to trade their crops with market information about crop prices.According to the survey, the market for wheat and mustard is more accessible in Rewari. However, there is a lack of market for higher revenue yielding horticulture crops which affects farmers motivation to grow them. 

2.2 Social awareness and acceptability: Social awareness and acceptability of SWPs depends on the perceived cost, risks and benefits of using the technology by its beneficiaries. This means that the acceptability of SWPs is governed by the degree to which a farmer reckons that it would enhance his/her productivity, will be easy to use and will support him/her in catering to the current impediments in the agricultural system (lack of electricity supply, low water table, rising diesel prices etc.). Survey conducted in Rewari revealed that while SWPs scheme has great potential in providing water for small-scale irrigation and reducing environmental costs, low income levels and lack of expertise and education amongst farmers hampers the social awareness and acceptability of the technology. 

In Rewari, 95% of the farmers were aware about SWPs scheme through 3 primary sources 1. Newspapers 2. Word of mouth 3. Local agricultural institutions. However, farmers have limited awareness about the technology as while 95% of the farmers have heard about SWPs, only 10% were aware about the benefits and risks associated with it. Also, awareness of the scheme did not translate into its acceptability due to its high upfront costs. Survey indicated that only 2% were willing to adopt SWPs after they were informed about the high capital costs of SWPs. Also, 78% of the respondents were unaware of the loan and credit facilities to avail the scheme and 30% of the farmers asked for more subsidies indicating a lack of affordability of farmers in the district. 

Farmers who own the technology mentioned two prime reasons for their switch 1. Lack of electricity supply 2. To save money. Based on these reasons 80% of the solar pump owners were satisfied with the technology and were willing to propagate it. Also, 98% of the farmers mentioned that the technology was easy to use and they have not paid for the maintenance of SWPs since its purchase. Hence, SWPs received positive feedback regarding its ease of use and low variable cost. However, farmers have mentioned some drawbacks of the technology, most popular of which is that current SWP owners are not able to irrigate their entire land due to unsuitable weather in the district and low water table. Survey indicates that 63 % of the SWPs users continue to use electric pumps along with SWPs which does not provide economic benefit to them. This is also affected by the fact that 94% of the farmers bought SWPs through self-funding indicating lack of knowledge regarding availing Kisan Credit Card or other banking services. In this case, awareness campaigns, technology demonstration and training exercises will help farmers make informed decisions and clear any information asymmetry. Since, 60% of the farmers heard about SWPs through agriculture institutions like Kisan Vigyan Kendra and newspapers such sources can be used to increase awareness. 

Figure 4: Challenges in using SWPs

2.3. Environmental sustainability: Environmental sustainability is largely defined as meeting the resources and needs of the current and future generation without compromising on the environmental health. This paper considers two parameters regarding environmental sustainability of SWPs 1. Water use efficiency 2. Lower carbon emissions. While low marginal cost of SWPs incentivises farmers to increase agricultural productivity it can also lead to overexploitation of water if the resources are not utilized judiciously. In Rewari, since 90% of the farmers use sprinkler and drip irrigation, employment of SWPs with these efficient water management mechanisms will prevent overexploitation.

In addition, 63 % of SWPs users in Rewari district are using solar pumps with electric pumps which creates private and external costs leading to no remarkable change in water use efficiency or abatement of carbon emissions. Moreover, it further leads to an additional variable cost of operationalization to the farmers. On the other hand, if only SWPs are used in cultivation, it would lead to a considerable reduction in greenhouse gas emission and will also ensure increased revenues for the farmers. However, while promoting deeper penetration of SWPs in the market, policymakers should also cautiously understand the challenges which SWPs can pose at the end of their life cycle.  End-of-life management in SWPs is particularly important for components such as solar panels, controllers, and inverters, which are classified as e-waste, and their improper disposal could adversely pollute the environment. 

Recommendations – the way forward

The study has yielded various important insights that would serve the key stakeholders, policymakers, enterprises, and financiers who are working towards the large-scale adoption and financing of solar pumps. Based on the findings, the following key recommendations are made with the objective of 1. Promoting environment sustainability 2. Improving the accessibility, affordability and feasibility of employing SWPs and 3. Increasing private benefits to the farmers from SWPs. 

Table 6: Recommendation for sustainable deployment of SWPs

Measures/approachesEnvironmental sustainabilityEconomic viabilitySocial acceptability and awareness
Improved awareness and availability of loan and credit facilities Awareness on loan and Kisan Credit Card will provide access to finance and improve the purchasing capacity of the farmers. 
Providing financial incentives like higher subsidies to the farmers with water harvesting/storage systems and micro-irrigation systemsIt will improve water use efficiency of SWPs and will prevent groundwater exploitationHigher subsidies will make SWPs more affordable. Reducing the cost of the SWPs will encourage more farmers to adopt the technology.
Supplementing SWPs policy with horticulture schemesIt will improve water use efficiencyGrowing high value crops with adequate market access will increase agriculture productivity and farmers income. Increased income will improve social acceptability and awareness.
Insurance for SWPsIt will provide security to farmers especially in theftReduce the risks of acquiring SWPs for the farmers.
Training of farmers and technology demonstration to increase awarenessIt will lead to proper disposal of e-waste generated from SWPs at the end of their life cycle. Training of farmers on proper use and maintenance will improve life cycle and reduce repair and maintenance costs.Technology demonstration and peer learning through training sessions will improve social acceptability as 80% of the current users are satisfied with SWPs. 
Prioritizing areas with higher water tableSince SWPs is a new technology, a pilot should take place in the regions with higher water tables with the objective of increasing income of the targeted farmers. Success stories within the district will improve social acceptability
Defining a timeline on Antyodaya Saral for online applications (2 months)Better response rate will encourage more farmers to apply online.
Promotion of co-operative cultureFarmers purchasing capacity will improve if marginal farmers buy SWPs with help of self-help groups
District level helplineAdvise farmers about the best SWPs system to buy will lead to economic viability in using SWPsSuccess stories in SWPs will improve social acceptability
Strengthening of the reviews at the state levelReviews will ensure timely and quality delivery of SWPs and after sale services.


Ensuring access to irrigation in a reliable and affordable manner continues to be a policy imperative in Haryana. For this purpose, the Haryana government initiated a policy to provide 75% subsidy on SWPs in 2016. This paper seeks to understand the implementation of the SWPs policy in Rewari district of Haryana on 4 parameters 1. State level supply factors 2. Economic viability 3. Social acceptability and 4. Environment sustainability. The research is based on extensive interviews of the district and state level stakeholders of the renewable energy department, survey of 269 farmers and field visits.  Based on the primary research, this paper argues for a more comprehensive approach towards promotion and design for a sustainable solar based irrigation.

The analysis indicates that while the policy has been implemented and farmers availing the service have demonstrated satisfaction, the implementation has several pitfalls which affect its sustainable deployment. This paper seeks to understand the situation of agriculture in Rewari, factors affecting the sustainable deployment of SWPs and then make recommendations for a more sustainable solar based irrigation. This paper is focused on Rewari but provides insights applicable to the state and country as well. It will help policy makers, SWPs users, and other different stakeholders on availing and deploying SWPs effectively.  

The views expressed in the post are those of the author and in no way reflect those of the ISPP Policy Review or the Indian School of Public Policy. Images via open source.


  1. Department of New and Renewable Energy. List of applications received on solar pumping systems.
  2. Wu, W., & Ma, B. (2015). Integrated nutrient management (INM) for sustaining crop productivity and reducing environmental impact: a review. The Science of the total environment512-513, 415–427.
  3. Jain, A., & Shahidi, T. (2018). Adopting Solar for Irrigation: Farmers’ Perspectives from Uttar Pradesh. January, Council on Energy, Environment and Water, New Delhi, http://www. ceew. in/sites/default/files/CEEW-Adopting-Solar-for-Irrigation-Farmers-Perspectivesfrom-UP-Report-17Jan18. pdf.
  4. Zhou, D. (2017). The acceptance of solar water pump technology among rural farmers of northern Pakistan: A structural equation model. Cogent Food & Agriculture3(1), 1280882.
  5. Beaton, C., Jain, P., Govindan, M., Garg, V., Murali, R., Roy, D., … & Pallaske, G. (2019). Mapping Policy for Solar Irrigation Across the Water-Energy-Food (WEF) Nexus in India. International Institute for Sustainable Development.
  6. Census of India 2011. District Census Handbook, Rewari.
  7. Agrawal, S., & Jain, A. (2019). Sustainable deployment of solar irrigation pumps: Key determinants and strategies. Wiley Interdisciplinary Reviews: Energy and Environment8(2), e325.

How would you define poverty? There are several definitions and each one of them helps us imagine poverty in different ways. One way to define poverty is the lack of resources required to lead a basic life. By this definition, as long as your basic needs of food, clothing and shelter are met, you are not in poverty. The United Nations defines poverty as the “inability of having choices and opportunities, a violation of human dignity.” A more quantitative definition from the World Bank defines poverty as living under $1.90 (Purchasing Power Parity) per day. This is the international poverty line. Amartya Sen’s capability approach describes poverty as “a failure to achieve certain minimum capabilities.” This means that poverty is not seen purely as an issue of economic development but includes measures of human rights and access.

It does not take long to realize that poverty has many faces. In a recent project called One Hundred Homes, researchers conducted a visual survey of India to examine what a household falling under a particular income or consumption level as per a standard government survey (IHDS, NSS) would look like in real life. The result was a collection of hundred visual essays showcasing the living conditions of families to understand the connection between wealth and poverty visually. A key insight is that it is almost impossible to predict which household is wealthier just based on the appearance of living conditions. We cannot simply look at assets owned to determine who is better off or worse off. Surveys usually measure poverty through consumption spending in a given period of time on a fixed category of things. This does not account for the value of the house, credit borrowed, subsidies received from the government, etc. In addition to this, the poverty line in itself is based on several assumptions such as calorie requirements and ignores indicators of education, health and wellbeing.

Figure 1: A snapshot from the One Hundred Homes project website (Source: One Hundred Homes)

Poverty, through its appearance and measurement, presents several puzzles. Some obvious facts about poverty may not be true. On the other hand, results from experiments to understand the lives of the poor may be counterintuitive.

For example, one knows about the vicious nature of poverty. But why do the poor remain poor? Do bad decisions cause poverty or does poverty cause people to make bad decisions? Sendhil Mullainathan and other researchers ran a series of experiments to understand how scarcity affects cognitive capability and decision making. For an illustration of how poverty affects thinking, they asked people to memorize a list of words similar to the one below in 20 seconds and asked them to recall as many as they can from memory.

Figure 2: List used by researchers in the experiment to determine effects of poverty on cognitive capacity (Source: Chicago Booth Review)

What’s interesting is that, although “money” was not on the list, people with low income are more likely to remember seeing money in the list than people with high income because words on the list are related to financial concerns. This portrays that money occupies a significant part of the cognitive load of the poor. Further, experiments also depict that people under financial stress perform poorly in cognitive tests such as Raven’s matrices and cognitive control tasks compared to those who are not. This implies that poverty in itself impairs sound cognitive performance. 

A more realistic experiment conducted on Indian sugarcane farmers tested their cognitive abilities pre-harvest and post-harvest. Sugarcane has one harvest cycle per year. Before the harvest, farmers are relatively poor and uncertain about their finances whereas post-harvest, the same farmer is relatively rich. A random sample of small farmers was tested pre- and post-harvest on Raven’s matrices, a measure of fluid intelligence and the traditional Stroop task, which gauges cognitive control. Controlling for other fixed effects such as nutrition, work effort, etc., the experiment showed that being poor reduces cognitive capacity. Farmers post-harvest performed better on cognitive tests compared to pre-harvest.

This research suggests that the poor are less capable not because of their inherent capabilities but because poverty in itself imposes a cognitive load. Imagine if you were to make a decision after staying awake an entire night. Would you be able to make the right decision? The effect of poverty on cognitive function is comparable to losing a full night’s sleep. The poor constantly make important decisions of education, health, consumption and saving in this state of mind. The implication of this is that policymakers need to be aware of the psychological nature and cognitive tax of poverty. Welfare programs with complex ordeals aimed at better targeting may be counterproductive. The timing of welfare policies is also critical. Cognitive aids such as nudge can go a long way in offsetting the effect of poverty on cognition.

This also begs the question, why do the poor have to make more decisions than the rich with regards to essential utilities like savings, healthcare, insurance and so on? A poor person, who may not have access to banking services or formal employment, must decide to save for his or her retirement. On the other hand, the decision is already made by the organization of a rich person through the provident fund. The same goes for insurance, healthcare and even water. A rich person in an urban area can simply open a tap in the comfort of their home and clean water flows out, whereas a poor person has to choose where to procure water from, uncertain of whether it is clean or not, and decide what to do if it is not clean. Poverty impedes cognitive function and affects decision making. Above this, the poor make a significantly greater number of decisions amidst a lot of uncertainty. Both these facts are detrimental to leading a good life. Human beings have bounded rationality and self-control problems, hence fewer the decisions, the better. This is the reason why in developed countries like the United States, essential utilities such as insurance, savings are left to institutions and not the individual. If a poor person has to consistently choose to save every month for his or her retirement, they are bound to run into self-control problems. It is unfortunate that despite evidence on this, policymakers have made little effort to minimize the decisions taken by the poor. What, if not this, is an indication of inequality?

Another puzzle is that of risk and entrepreneurship. More number of poor people are self-employed and own businesses compared to the rich. Entrepreneurship involves risk and uncertainty. If the rich are better at managing risk due to their endowments and safety net, why is it that more poor people start businesses than the rich? This is the mystery of self-employment. That a person for whom it is easier is less likely to do it whereas a person for whom it is harder is more likely to do it.

A possible explanation for this is that the poor are natural entrepreneurs. But the question to ask is whether poor people are creative or does poverty force them to find creative ways of earning their income? This is not to say that poor people cannot be creative. An average poor person is probably as creative as the average rich person. However, there is an overrepresentation of entrepreneurs among the poor. The poor are entrepreneurs not because they want to be, but because they have to be. 

Economics teaches us that people are generally risk-averse. So, they must prefer a salaried job to starting a business. A survey question asking parents regarding their ambitions for their children confirms this belief. The results from rural Udaipur and around the world are that most poor parents want their children to be in a salaried job. Only 7% of parents want their children to run businesses. For the poor, a job is a means to achieve stability and move up the social ladder. However, public policy does not seem to understand this. The policy view is that poor people are more entrepreneurial in nature and several policies have been created to encourage the poor to turn into entrepreneurs. Rural areas have the RSETIs (Rural Self Employment Training Institutes), which focus on providing training for rural youth on entrepreneurial development. There is no such equivalent for urban areas. However, for the urban poor specifically, there is a Self-Employment Programme (SEP) under the NULM, which provides financial assistance to set up self-employment ventures.

From my field experiences of visiting and working with SHGs (self-help groups) of Maharashtra and Madhya Pradesh, the thrust has been for SHGs to begin businesses. NABARD, NRLM and civil society are invested in this idea, providing loans and market support. It is likely that most of the SHGs are not even interested in business but have to involve themselves in order to take advantage of the credit and market support. Even in the recent COVID relief package by the Government of India, the specific relief measure for SHGs was to increase the collateral-free loan limit to Rs. 20 lakh so as to meet their business needs. This differential focus on self-employment for the poor is concerning. 

Additionally, the traditional investment theory of risk-reward ratio does not work for the poor because of capital and technological constraints. Most businesses owned by poor people are not profitable. Different occupations are filled with different amounts of risk and uncertainty. Agriculture is one of the riskiest, yet least profitable occupations. Agriculture is subject to whether uncertainty, price uncertainty, market uncertainty, credit uncertainty, government uncertainty and what not! Hence, a poor farmer is not the same as a poor plumber and public policy needs to give attention to this fact. A reason why agriculture is one of the most intervened sectors by the government is not just populism but also the level of uncertainty tagged with the occupation.

There are many more such puzzles in the world of poverty. To unearth these puzzles, we need to rigorously test the traditional theories we hold about the poor. In a developing world, everybody is undergoing a transformation, with the poor transforming at a faster rate at the margin. Thus, we not only need to ask the right questions but also revisit the existing answers to update our understanding of poverty. Each piece of evidence gives us insights into the lives of the poor and incorporating these insights helps us create better poverty alleviation policies.

The views expressed in the post are those of the author and in no way reflect those of the ISPP Policy Review or the Indian School of Public Policy. Images via open source.