Private investments in groundwater have emerged as the main pathway through which small holder farmers in India access irrigation. This paper discusses the role of groundwater irrigation in agrarian growth and small farmer development in the Indian state of West Bengal. It finds that after initial growth in the 1980s and early 1990s, agricultural growth in the state stagnated. It is hypothesized that this stagnation was a direct result of slowdown in growth in groundwater irrigation. The reason for this slow down, was in turn, government policies related to groundwater and electricity. The paper then goes on to discuss the Groundwater Act of 2005 as well as electrification policies of the government of West Bengal and locates these policies within the broader backdrop of groundwater resource endowments in the state. By juxtaposing groundwater policies and resource realities, the paper questions the relevance of current regulations and suggests some policy alternatives – alternatives that are likely to propel the state and its small holder farmers on a path of higher agricultural growth.