The furrow method of irrigation is the dominant form of providing water to the crops in India. But its conveyance efficiency in only around 50 % and it has not been able to give a good crop yield. On the other hand, the new methods of irrigation like sprinkler and drip (also known as micro irrigation) promise to cover the deficiencies of the surface irrigation method by having high conveyance and application efficiency of around 80-90 % leading to better crop yield. But this transition has its own impacts – socio economic and technical which have not been discussed in detail in India. Investigating how this transition will affect the small and marginal farmers and how will it impact the water and energy consumption is critical to promote a policy which is trying to reduce the water consumption on one hand and is promoting the concept of ‘more crop per drop’. Recently, the Maharashtra government made it compulsory for all the sugarcane farmers to switch to drip method of irrigation over a period of 3 years. Similar efforts to subsidise the upfront cost to promote adoption of this technology has been underway by both Central and state governments. The report investigates the transition’s effect on small and marginal sugarcane farmers in terms of the initial investment, change in profits, adoption challenges and the said benefits of this technology. Cost analysis shows that the subsidy given by the government is insufficient for the small or marginal farmer which is a major barrier to adoption. Additionally, the delayed settlement of subsidies demotivate the farmers from installing this technology given they already cash constraints due to high input costs. Technical aspects of the system have also been analysed by designing a drip irrigation system for 1 hectare of land growing sugarcane. This illustrates the various pressure head losses due to which energy consumption increases. Calculations have been done for theoretical water and energy requirement of sugarcane crop which is then compared with the primary data collected from Baramati taluka in Pune. The results show that although water consumption decreases by 25 % on shifting to this method, energy consumption increases by 55 %. A similar analysis at the state level shows similar trends. This directly affects the state electricity board’s finances which are already in debt due to non-recovery of costs. Thus the trade-off between water savings and increased energy consumption needs to be properly managed through appropriate policies.