Why Punjab CM wants Rajasthan to pay Rs 1.44 lakh crore for water used since 1960

Under this arrangement, Bikaner paid Punjab a royalty or usage charge, typically linked to irrigated acreage. This was essentially a commercial agreement between a princely state and the colonial administration, with payments continuing till around 1960.

How did things change in 1960 with the Indus Waters Treaty?

The signing of the Indus Waters Treaty between India and Pakistan marked a structural shift. The treaty gave India full control over the eastern rivers, Sutlej, Beas and Ravi, for “unrestricted use”.

This allowed India to reallocate internal water distribution. Large post-Independence projects such as the Harike Barrage and the Rajasthan Canal (later the Indira Gandhi Canal) were developed to divert water to arid regions.

According to former chief engineer, canals, Punjab, Amarjit Singh Dullet, this also marked the point when the earlier royalty-based system was discontinued. Water sharing began to be treated as an inter-state allocation within India, not a paid arrangement, and Rajasthan stopped making payments.

What changed in 1981 under then Prime Minister Indira Gandhi?

In 1981, a tripartite agreement was signed between Punjab, Haryana and Rajasthan, all ruled by Congress governments, with the backing of Prime Minister Indira Gandhi.

This agreement reallocated Ravi-Beas waters based on an estimated availability of 17.17 million acre feet (MAF). Rajasthan was allocated 8.6 MAF, the largest share, despite being a non-riparian state.

The allocation formalised Rajasthan’s entitlement and supported the expansion of the Indira Gandhi Canal system, which carries water from the Harike Barrage in the Tarn Taran district of Punjab deep into the Thar desert.

Did Punjab ever revoke these agreements? Did it target Rajasthan?

In 2004, under then Chief Minister Amarinder Singh, Punjab enacted the Punjab Termination of Agreements Act, seeking to scrap water-sharing agreements.

However, while the law appeared sweeping, it protected “existing utilisation”. In practice, this meant that ongoing supplies, particularly to Rajasthan through established canal systems, were not disrupted. This Act was aimed largely at the Satluj-Yamuna Link canal (SYL), which has been stalled for decades due to the long-standing water-sharing dispute between Punjab and Haryana.

In 2016, the Supreme Court held that a state cannot unilaterally terminate inter-state agreements, effectively restoring the earlier legal framework.

What has changed in river water availability since then?

The original allocations were based on assumptions of “surplus” water that have since weakened. Estimates of available Ravi-Beas waters have declined over time, while Punjab’s groundwater has sharply depleted due to intensive agriculture. As per the Central Ground Water Board assessment for 2024-25, Punjab has the highest groundwater extraction rate in India at 156.36% of the annual extractable resource, far above the national average of 60.63%.

At the same time, canal systems within Punjab have not always operated at full capacity, while Rajasthan’s canal network has expanded significantly, drawing large volumes consistently.

Of late, however, the state claims that canal irrigation coverage has surged dramatically: From about 26.5% (around 20-26 lakh acres) of cultivable land receiving canal water in March/April 2022, it reached 78% (approximately 58 lakh acres) late 2025 .

This has led to a situation where historical allocations remain largely fixed, even as hydrological realities have changed.

Technically, what is Punjab’s argument against Rajasthan?

Punjab’s core argument rests on the riparian principle: that states through which rivers flow should have primary rights over their waters.

Rajasthan does not lie in the basin of the Ravi, Beas or Sutlej, making it a non-riparian state. Punjab argues that allocating a larger share to such a state, especially in a water-stressed scenario, is inequitable.

The state is also now framing the issue in economic terms, suggesting that long-term diversion has imposed a measurable cost.

What explains the CM’s statement now?

The timing appears driven by multiple factors. Punjab is facing acute groundwater depletion and rising concerns over water sustainability. At the same time, there is renewed national focus on river management, including developments linked to the Indus system.

Politically, quantifying the claim at Rs 1.44 lakh crore turns a historical grievance into a concrete demand, potentially strengthening Punjab’s negotiating position with both Rajasthan and the Centre.

What is the way out?

Former special chief secretary of Punjab, KBS Sidhu, says any claim for compensation or revision of allocations would have to be pursued through constitutional mechanisms.

Punjab could move the Supreme Court under its original jurisdiction in inter-state disputes or press its case before the Ravi-Beas Tribunal, which has been pending for decades.

At a broader level, a resolution would likely require revisiting allocations based on current data, balancing riparian rights with national priorities, and negotiating a politically viable settlement among states.

For now, the Chief Minister’s statement has reopened a layered dispute, one that spans colonial-era agreements, post-Independence policy, and present-day water stress.