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The report uses the Soil Water Assessment Tool (SWAT) and a lumped groundwater model to evaluate the Jaldhaka watershed's current hydrology and the effects of shifting land use or increasing groundwater pumping. It finds that while both a deforestation scenario and an electrification scenario increase rice production, deforestation significantly raises flood risks. Electrification increases productivity but may lead to groundwater depletion of up to 8 meters in downstream areas under a 100% adoption scenario, though this may be partially offset by induced recharge from perennial rivers.

The report identifies three primary livelihood strategies in the Jaldhaka watershed: agriculture, off-farm employment, and independent tea production. Smallholders predominantly grow rainfed rice for consumption, with cash crops including jute, tobacco, and potatoes. Irrigation is heavily dependent on groundwater, often via rented diesel pumps, which creates financial constraints and vulnerability. Off-farm income, ranging from 10-70% of total income, serves as a critical buffer against crop failure. Independent tea growing is an emerging, lucrative strategy for those with high-lying land, supported by Self Help Groups (SHGs) for marketing. The most vulnerable group is identified as those solely dependent on agriculture, while those with off-farm income are the least vulnerable. Key challenges include a lack of electricity, unpredictable rainfall, and market price fluctuations for cash crops.

The report examines how rural electrification and expanded independent tea production would affect stakeholders in the Jaldhaka watershed. Electrification is expected to increase crop yields and income but risks groundwater depletion and excludes those unable to afford installation. Expanded tea growing offers higher cash income but threatens food security, worker health due to chemical exposure, and downstream water availability.