Investments worth $291 bn needed to plug water demand-supply gap in India: Study

To put things in perspective, the additional funding required only to plug the demand-supply gap in 2030 is higher than the Government of India’s 2016–17 budget i.e. Rs 20 lakh crore.

“Amid sources that can be used to bridge water demand-supply gap, augmented and sustainable surface water sources would require funds to the tune of $215 bn followed by groundwater ($45 bn),” noted the ASSOCHAM-PwC joint study titled ‘Water Management in India: Channelling the resources.’

While employing technologies like wastewater treatment and reuse together with desalination would require funding of $27 bn and $4 bn respectively.

An additional $25 bn would be required as part of capital and O&M requirements for each market in four types of Indian cities – IA, IB, IC; class II, class III and class IV, the study noted.

“Considering that the share of rural population to the total Indian population is 40 per cent, funding requirement of $25 bn will increase by 40 per cent to reach $35 bn by 2030 if the funding gap for the rural sector is also taken into consideration,” it said.

It is imperative to note that there is immense pressure on India’s natural resources as with 16 per cent of the world’s total population, its economic activities, ambitions and needs are dependent on 2.5 per cent of the world’s land and 4 per cent of the total usable water resources.

Thus creating a robust water infrastructure through efforts and funding in capital and O&M (operation and maintenance) expenditures is therefore need of the hour to plug demand-supply gap of 754 BCM (billion cubic metres) in India’s water sector by 2030, suggested the ASSOCHAM-PwC report.

In view of the factors that impact the sources of and demand for water, the study said that agricultural water demand-supply is projected to be about 510 BCM in 2030 i.e. 69 per cent of the total demand supply gap.

“The projected 69 per cent is an optimistic number and is dependent on improvements in irrigation efficiency. However, if efficiency does not improve, the gap in the irrigation sector alone would be about 80 per cent of 754 BCM, i.e. about 570 BCM in 2030,” added the report.
Highlighting the extent of water use efficiency in the industrial sector, it said that industries would need to withdraw about three times more water (about 57 BCM) than they would actually consume (about 18 BCM) in 2030.

“The power, paper, steel, aluminium, cement and fertiliser industries alone would withdraw five times more water than they would actually consume.”

The ASSOCHAM-PwC study also said that projected municipal and domestic water demand is estimated to double to 108 BCM (seven per cent of total demand) by 2030. “This translates into a deficit of approximately 50 BCM between supply and demand of water in the domestic sector.”

It further said that this gap takes into account the fact that most of the prominent urban centres import water from sources that are 200–500 kilometres (km) away, the gap is therefore with respect to not only the volume of water available but also, if business as usual continues, the distance (and therefore the cost, time, and effort) involved in bringing water to urban areas.

“Stepping up of existing service provisioning including infrastructural up-gradation will be necessary to meet the qualitative and quantitative aspects of the demand,” said Mr Ranen Banerjee, Partner and Leader - Public Sector and Governance, PwC India while addressing an ASSOCHAM national conference – ‘Water Management: Technology, innovation & sustainability.’

“This would need additional sources of investments including technological innovations,” he said.

“For this, commercial financing is a significant source,” he added.

“Water sector will therefore need to enhance the creditworthiness for the players to harness its full potential,” further said Banerjee.