Abstract Taking into account the different fixed and operating costs components of water production, a mathematical model was developed for optimal spacing of shallow tubewells in relation to channel lining and conveyance losses for multicropped tubewell command area. For this purpose, different depths of irrigation and area allocation to various crops were considered. The model was solved for light textured soil and shallow aquifer condition of North Bihar, India using the existing market rates of materials. However, the mathematical concept is universally applicable. Optimum spacing of 400 m is found when 70% of the channel length is lined. The cost of water production for the study area worked out to a minimum of Rs.84.76 (1 US$ =Rs. 33.00 approx.) per 100 m 3 of volume of water. For unlined channel an optimum spacing of 180 m is found for which the cost of water production comes to Rs.89.65 per 100 m 3 volume of water.