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India faces ‘relative scarcity' of water. Drip irrigation system - a water saving technology simultaneously enhances crops' productivities. This paper on economic worth of the system has been undertaken in a hilly state through objectives: to analyse existing status of water resource potential, drip system and crops' productivity; work out cost effectiveness and find out remedial measures for providing input to the policy frame work. The results have revealed positive economic impact with respect to 18 % higher benefit cost ratio by adoption of this system on account of enhanced apple productivity. Huge unexplored water potential in the state can further be explored for increasing irrigation and potential area for installing this system. The system related problems, existing water policy guidelines and scientific recommendations have lead to future policy implications.
