Drip irrigation system has been one of the technical means to improve water use efficiency. In India, this system is gaining popularity among fruit growers and in water scarced area but a substantial area is being covered annually under vegetables crops. One of the major concerns raised by farmers about this system is its economic viability. In present study, the economic viability of drip irrigation system for growing capsicum crop based on discounted cash flow technique (Net present worth and Benefit cost ratio) was explored. Eight irrigation treatments were laid under drip with and without plastic mulch. The irrigation levels were taken as 1, 0.8 and 0.6 of the crop evapotranspiration. The pan evaporation method was used for estimation of reference evapotranspiration and Water Balance Approach was used for irrigation scheduling. The average amount of water supplied under treatment VD (100% irrigation requirement supplied with drip) was found to be 415 mm for whole growing season of the crop. Similarly the amount of water was found to be 332 mm and 249 mm for the treatment 0.8VD (80% irrigation requirement supplied with drip) and 0.6VD (60% irrigation requirement supplied with drip) respectively. Highest yield was recorded in case of treatment VD + PM (100% irrigation requirement supplied with drip plus plastic mulch) followed by VD. Yield under treatments 0.8VD, 0.6VD, 0.8VD + PM and 0.6VD + PM were significant while treatments VD, VF and VF + PM were at par with the treatment VD + PM. Net Present Worth (NPW) was found to be positive for all the treatments. The highest NPW was obtained under treatment VD as Rs. 309,734.90 and lowest was in case of 0.6VD + PM as Rs. 144,172.24. The yield per mm of water used was reported to be at higher side as 35 in both the treatments VD and VD + PM. But the yield per mm of water used was found to be lowest as 18.07 and 19 in case of VF and VF + PM respectively.