The open access nature of groundwater has resulted in the over-exploitation of the resource. Negative externalities are encountered by the users due to the self-interest maximising behaviour of individual agents which increases the social cost of extraction. There is excessive groundwater exploitation occurring in the country, which had led to a policy concern that there is a need for shift of groundwater resources to a Common Property Rights regime. We review the Andhra Pradesh experience in evolving governance mechanisms and suggest certain mechanisms to evolve nested governance mechanisms that could be piloted in the state and there should be a continuous process of learning to refine the governance regime and sustain the gains achieved.
