Analyze the relationship between groundwater depletion in north-western districts of Haryana (such as Kurukshetra and Kaithal) and long-term agricultural productivity growth. Which economic concept best explains the hidden cost of intensive paddy cultivation in this region?

💡 Solution & Explanation

Paddy cultivation in water-stressed alluvial tracts generates severe negative externalities through falling water tables, which eventually escalate pumping costs and threaten the sustainability of agricultural output. Externalities occur when economic activities create uncompensated spillover costs on third parties or future generations. Sustainable agricultural policy in Haryana increasingly focuses on crop diversification schemes like Mera Paani Meri Virasat to counter this resource degradation.