Rising water scarcity in agriculture has been a major concern worldwide. As resource managers seek to address this issue, Integrated Water Resources Management (IWRM) has become a widely accepted sustainability paradigm. The purpose of this study is to evaluate restoration alternatives of irrigation tanks by applying multi-criteria and probabilistic benefit–cost analysis for a rural watershed in India. We incorporate the principles of local-IWRM, namely, hydrological balance, efficiency, equity, stakeholders’ involvement, and uncertainty. We use the mixed-method approach of data collection, including remotely sensed hydro-ecological data, walk-through field observations, focus groups, and household surveys. The study region produces a large percent of runoff water (i.e., about 67% of the total precipitation) which can be partially captured to sustain irrigation tanks. The majority of the tanks in the study area do possess moderate to high irrigation potential yet remain in poor conditions. A proposed lift irrigation scheme with a 75% or more increase in water availability could return from ₹ 1.23 to ₹ 1.73 on every Indian rupee (₹) invested, in addition to other socio-ecological benefits. The increase in water availability could lead to future crop area expansion, which comes with a high price tag. Therefore, using additional water on the existing crop area can be just as economically viable as water-induced crop expansion. A coordinated effort on the part of local agencies and water users is necessary for efficient and equitable use of incremental water that comes from any restoration efforts in the study area or elsewhere.
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