A study was carried out to determine the economics of paddy production under Jala Samvardhane Yojana (JSYS) tanks in Dharwad district of North Karnataka using the primary data. A sample size of 60 demonstrated and 60 traditional farmers was selected using random sampling method and required information’s was elicited for the agriculture year 2010-11 through survey method. The Cobb-Douglas production was used to analyze the resource use efficiency while the output decomposition model was used to analyze the structural break in technology. The per hectare cost of cultivation in case of demonstrated farmers was `  30065 which was lower than traditional ` 32445. The gross returns per hectare by demonstrated farmers were `  55018 as against traditional farmers being `  43639. The value of co-efficient of determination (R2) was found to be 0.89 and 0.83 in the case of demonstrated and traditional farmers respectively. The technological component of the demonstrations conducted, contributed about 26 per cent higher yield in On-Farm Demonstration (OFD) farmers when compared to the traditional farmers.