The Indian Express (Delhi Edition)
MOODY’S WARNING
Rating agency’s report on water stress affecting India’s credit profile should spur conversations on sustainable use
INDIA’S PERSISTENT WATER crises and increased vulnerability to climate change could dent its sovereign credit strength, at a time when the country is gearing up to be the world’s third-largest economy. The rare use of this non-economic metric is especially pertinent given the difficulties people face in several cities and towns this summer. With meteorologists warning of more exacting heat waves in the coming years, water security would be critical to the country’s economic ambitions. Any drop in water supply could disrupt operations in farms and factories, Moody’s has said. This, the firm, has cautioned can precipitate a rise in food prices and lead to a decline in people’s real incomes. The agency identifies coal-fired power generation and steel production as the industrial sectors most vulnerable to water stress.
According to government estimates, per capita water availability in the country is likely to fall from an already low 1,486 cubic met res—much below the ministry of water resources’ benchmark of 1,700 cubic metres — to less than 1,400 cubic metres by 2030. India’s historical inclination to address water-related deficits by focusing on supply-side parameters has led to uneconomical use of this resource, especially the overutilisation of groundwater. Water pricing mechanisms do not adequately account for the perilous state of the country’s aquifers. In 2019, the Water Resources Ministry launched the Jal Shakti Abhiyan for rainwater harvesting and water conservation. Metros such as Delhi, Bengaluru and Mumbai do have laws on using rainwater. But, by all accounts, these have remained on paper. India’s metros do not have any data on buildings with water-harvesting structures. State governments and municipal corporations do very little to either incentivise housing societies — by linking rainwater harvesting with tax regimes such as property taxes, for example — or penalise builders who do not factor water efficiency in construction projects.
In the next 20 years, India will likely add more than 270 million people to its urban population, intensifying the competition between businesses and households for water. Conversations on water audits are at a nascent stage in industry. The Moody’s report could occasion such discussions. For instance, as the International Energy Agency has pointed out, 70 per cent of India’s projected electricity generation for 2040 will come from plants not yet commissioned. Technologies — dry cooling and non-fresh water cooling, for instance — to reduce pressure on water resources are available today. Moody’s warning should push policymakers to arrive at innovative ways for ensuring sustainable use of water.