Groundwater is the predominant source for the Cuddalore basin for drinking and irrigation purpose. Open cut lignite mines are under operation in this basin which is supplying lignite for the thermal power plant. The lignite is present below the confined aquifer approximately at 90 m depth below ground level, under huge hydrostatic pressure. The thickness of the lignite layer is varying from 15 to 20 m. To avoid the mine floor bursting due to uplift pressure, the water level should be maintained below the lignite bed. Hence it is necessary to extract water from the upper confined aquifer of the basin. This pumping resulted in depletion of groundwater levels and thus it is necessary to find out the suitable pumping strategies for mining purpose without significant impact on the groundwater resources. To achieve this, groundwater balance study has been carried out to evolve strategies for the effective groundwater management of the basin. The numerical groundwater flow modelling was developed using Visual MODFLOW environment and solved for various future condition of operation of mines. The three dimensional ground water flow model of the region was built by using hydrogeological data and boundary conditions. The work out drawdown matched with the simulated drawdown. The calibrated and validated model was then used to facilitate the simulation of the model for the extended period of pumping. The water balance of the calibrated and validated model showed that the total annual deficit in the upper confined aquifer is 26.5 x 106m3. Three future scenarios were considered to predict the response of the aquifer system under varying abstraction, in order to evolve optimal control strategies, so that the groundwater is not over exploited. © Research India Publications.