The micro irrigation scheme has received considerable attention from policy makers, researchers, and economists etc. for its perceived ability to contribute significantly to groundwater resources development, agricultural productivity, economic growth, and environmental sustainability. In this paper, the impact of micro irrigation scheme has been studied on farming system in terms of production, productivity, cost and returns. At overall level Input-Output Ratio (over total variable cost) was worked out be 5.45, 5.65, 2.23, 5.40, 5.86, 2.84, 17.47, 16.38 and 38.78 for capsicum, tomatoes, brinjal, cauliflower, cabbage ,potatoes, mango, kinnow and pomegranate crops respectively. Returns over variable cost were found to be positive and more than one respectively for all crop, which reveals that farmers cultivating this crop were recovering variable cost as well as getting returns over variable cost incurred. The micro irrigation has been found to have a significant impact on resources saving, cost of cultivation, yield of crops and farm profitability. Hence, the policy should be focused on promotion of micro irrigation in those regions where scarcity of water and labour is alarming and where shift towards wider-spaced crops is taking place.