In this paper we have made an attempt to understand farmers' response to the continuing water scarcity. Results show that farmers' education status (primary school and high school level) and plot size are encouraging farmers to go for explorative extraction while farming experience and awareness (about causes of the scarcity) are discouraging it. Explorative extraction results in higher investments, lower gross farm income and shorter well life. Respondents' awareness about human causes of resource scarcity is prompting adoption of conservation measures. Decision to introduce drip irrigation as a major demand management strategy is positively influenced by plot size, government subsidy support and externality cost of well failures.

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