Dining options are plentiful but far from spectacular, catering largely to budget travelers more concerned with imbibing marijuana than partaking of quality cuisine; if you're staying at Seventh Heaven or Pushkar Palace, you'd be well advised to make full use of their dining facilities. However, if you're up for a culinary adventure of the backpacking kind, you'll find numerous strange and unusual places around the lake, many of them proud of their multifarious global cuisines, all fairly Indianized. Do be aware that you won't find meat, eggs, or alcohol served anywhere near the sacred lake of Pushkar.
Sai Baba Haveli Restaurant is a favorite with young foreign tourists and aging hippies -- it serves gratifying baked goods and decent (egg-less) croissants (although their idea of espresso is simply stronger-than-usual coffee). We're sure most people come here because of the liberal attitude toward smoking intoxicants, which tends to happen in the garden, lorded over by a statue of Sai Baba ("the living god") himself; on Saturday nights, festivities include a desert gypsy (Kalbeliya) dance program and party. There's also a rooftop restaurant. Prems Venkatesh, a basic eatery overseen by a Brahmin who cooks his delicious chapatis with vegetables of the day and dal over a wood-burning fire, is widely considered the best in town for cheap Indian food; ask anyone to direct you there, but don't expect it to be sparkling clean.
Beware: Please take special care with belongings and chatting to strangers as over the past few years there have been numerous incidents involving drug dealing and the attendant sexual harassment cases -- all involving the notorious bhang or marijuana, and no doubt other drugs too. The Bhang (or "special") lassi is served at numerous outlets around Pushkar; these seem innocent, and invariably taste sweet, but the narcotic after-effects take awhile to set in and will have you losing all sense of reality (and direction). Be sure you know your way back to your hotel.