Crop residue burning is a major concern for many countries since it leads to a deterioration of air quality, which has a number of health implications. This paper examines the unintended consequences of a policy aimed at improving the groundwater level on crop residue burning in India. The Preservation of Subsoil Water Act, 2009 was implemented in the Indian states of Punjab and Haryana in March 2009, and it bans the transplantation of paddy before mid-June to preserve groundwater. Theoretically, this leaves a short window of time for clearing the crop residue before the next crop and thus increases the likelihood of farmers adopting time saving methods like crop residue burning. Exploiting the spatial and temporal variation of the Preservation of Subsoil Water Act, we compare the bordering areas of Punjab and Haryana with that of the neighbouring states and find that the ban results in both delay and an increase in crop residue burning in the winter months. The findings have important implications for environmental policy design.