ABSTRACT Tanks are important means to conserve water resources in semi-arid areas. Tank irrigation in general, and in Tamil Nadu in particular, has a long history, and it can be traced to prehistoric times. Poor management of the integrated tank system including its structures and distribution system is one of the major reasons for decline of tank irrigated area. Rehabilitating tanks enhanced groundwater recharge leads to increased water table in the wells located in the command area. Hence well owning farmers can able to cultivate three times paddy crop in a year with the available ground water. Also they can provide water for adjacent non-well owning farmers for their second crop (during maturity stage) and third crop (whole season) cultivation by charging either cash or kind. This local ground water market helps villagers to cultivate more area and season, leads to efficient water use and increased income generation for the villagers. To prove the above statement a study was carried out in rural village of South India with an interview schedule and the data were analysed using SPSS (Statistical Package for Social Science). The result shows that the tank rehabilitation is highly correlated with local ground water market in post rehabilitation period.
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