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The Raniganj area has a long history of coal mining starting from 1744. This has resulted in major change in land use pattern and high groundwater abstraction leading to drinking water crisis especially during the premonsoon period. In the present study, land use /land cover conversions in Raniganj area from 1972 to 1998 and groundwater potential zoning for future groundwater development has been delineated using the techniques of Remote Sensing and Geographic Information System (GIS). The study indicates that land covered by vegetation and settlement has decreased at the expense of mining activity, which is reflected in the increase in area of overburden dump, barren land, waste land and abandoned quarry filled with water. Land use/land cover conversion has taken place in about 99.6 sq km, which accounts for 34.9 % of the total area, over 26- year period. Overlay analysis using multi-criteria such as drainage texture, geomorphology, lithology, current land use and steepness of slope and frequency of lineaments has been utilized to understand the potentiality of groundwater for future development. The analysis indicates that the groundwater potentiality of Raniganj area is medium (yield: 25 –50 m3/hr) with high potential (yield: >50 m3/hr) in the stretch along the Damodar River and in small pockets in the northern part of the study area. The groundwater abstractions structures feasible in the each of the various potential zones have also been suggested.