Water Crisis And Prolonged Heat Wave Detrimental To India’s Credit Health: Moody’s. A Worsening water crisis can adversely impact India’s credit health and spark social unrest, warned Moody’s Ratings in its report. It highlighted that decreases in water supply can disrupt agricultural production and industrial operations, resulting in inflation in food prices and declines in income.
Moody’s Ratings warned that this could exacerbate volatility in India’s growth and undermine the economy’s ability to withstand shocks.
The report highlighted India as one of the sovereigns that are the most vulnerable to risks associated with water management. India also has poor access to basic services. It said the agricultural sector utilizes the most water.
Research states that India will have only half the water it needs by 2030, with the annual per capita water availability to decline further to 1,367m3 by 2031, indicating severe water scarcity.
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The Observer Research Foundation (ORF) pointed out that water scarcity in India is marked by enormous demand-supply gaps, inefficient water resource management and climate change. There’s also a disparity in water pricing across states. This has resulted in low revenue collection.
Industries Vulnerable to Water Stress in India
The report stated that industries heavily dependent on water for production, such as coal power and steel makers, are the most vulnerable to water stress. It noted that thermal coal power plants are the largest consumers of water in India.
It said coal power plants in water-stressed areas can face operational disruptions during droughts as water shortages worsen.
In 2018, the Indian think tank NITI Aayog said the crisis is only going to get worse. India’s northern states are struggling with declining ground water levels. This poses a food security risk.
NITI Aayog in a July 2023 report stated that water is the core of sustainable development and critical for socio-economic development, healthy ecosystems and human survival.
It acknowledged that India is experiencing variability in availability. The report stated that high spatial variability in rainfall and high inter-annual variability further exacerbate the prevalent water stress situation.
The report added that attaining water positive status calls for collective accountability and responsible actions, and it is a process that will evolve with time given increasing climate variability which impacts resource availability.
