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    Indian Economy is at Jeopardy due to water crisis

    Not politics or interest rates, but Water Crisis: India's Economy is at Jeopardy


    Finance Outlook India Team | Thursday, 04 July 2024

    For almost two hours every day, community taps in the Vivekananda Camp slum, which is next to the embassy in New Delhi, provide brackish water. Each of the 1,000 inhabitants receives an extra pail of water for cooking and drinking from tanker deliveries.

    One hour's worth of tap water is accessible every four days in some areas of the dry state of Rajasthan, which lies southwest of the Indian capital. Women and children in rural communities near Mumbai had to trek over a mile to obtain water. Bengaluru, a 14 million-person IT metropolis in India, struggled with water scarcity this year and was forced to depend on tanker supply.

    Sampa Rai, 38, lives in Delhi's Vivekananda Camp and wakes up early every day to meet the first tanker providing water. "We don't wash the floor or do the laundry for days sometimes," Rai said. Not even the dishes. With what we have, we must make due."

    Water shortages have plagued the most populous country in the world for decades, but the frequency of crises is rising. For instance, the summer of this year has been among the warmest on record, and the water table has dropped and rivers and lakes have dried up, aggravating the drought.

    Both rural and urban Indians are being impacted by the shortages, which are also endangering industry and agriculture, causing food inflation, and raising the possibility of civil unrest. The government estimates that every year, 200,000 Indians pass away from drinking contaminated water. Both the economy and people are hurting.

    This makes efforts by the public and commercial sectors to preserve the resource more urgent, as well as to create methods of recycling waste water and lessen the nation's excessive reliance on the yearly monsoon, particularly in the agricultural sector. The ratings agency Moody's issued a warning last week over the potential impact of India's increasing water stress on the country's GDP, which is expected to be the highest among major countries at 7.2% for the April–March fiscal year.

    "Decreases in water supply can disrupt agricultural production and industrial operations, resulting in inflation in food prices and declines in income for affected businesses and workers, especially farmers, while sparking social unrest," according to Moody's.

    A federal government strategy paper dated October 21, 2023, outlining goals for the following five years, said that the government wants to more than increase waste water recycling to 70% by the end of the decade. In an interview conducted last week, top official Krishna S. Vatsa of the government-run National Disaster Management Authority reaffirmed the goals.

    According to a document examined by Reuters that has not been made public, authorities also intend to reduce the extraction of fresh water - that is, surface water from rivers and lakes and groundwater - to less than 50% by the end of the decade from 66%, the highest percentage in the world. This year, Vatsa added, it would also introduce a nationwide program at the village level that will suggest crops to farmers depending on the availability of water in the area.



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