The poor growth in agriculture during recent years has been a matter of grave concern for the policymakers in India (Planning Commission, 2008; Bhalla and Singh, 2009). The blame has been on poor natural resource conservation policies; poor design of subsidies; inadequate investments in irrigation; ineffi cient pricing of water, electricity and other inputs for crop production; and poor agricultural pricing policies and regulations such as bans on interstate trading of agricultural produce, particularly cereals. But, least is written about how poor management of water economy is causing long-term effects on Indian agriculture, particularly in regions that are historically agriculturally prosperous.