Moody’s Warns: India’s Water Crisis Threatens Economy and Future

Moody’s Investors Service has highlighted that escalating water stress poses a significant risk to India’s economy. The report emphasizes how India’s reliance on monsoon rainfall, rapid economic growth, and climate change could severely impact sectors like agriculture, industry, and infrastructure.

Water Availability Concerns

India, with over 1.4 billion people, faces a daunting challenge as water scarcity intensifies. The average annual water availability per capita is expected to drop from 1,486 cubic metres to 1,367 cubic metres by 2031, indicating severe water stress.

Economic Consequences

Decreased water supply disrupts agricultural production and industrial operations, potentially leading to inflation in food prices and declines in income for affected businesses. Sectors like coal power generation and steel manufacturing, which rely heavily on water, are particularly vulnerable.

Climate Change Impact

Rising temperatures and erratic rainfall patterns compound India’s water woes. Recent extremes, such as temperatures reaching 50 degrees Celsius and frequent floods, have strained water supply systems and damaged critical infrastructure.

Government Initiatives

The Indian government is investing in water infrastructure and promoting renewable energy development to mitigate these risks. However, substantial financial backing from both public and private sectors is needed for long-term resilience.

Conclusion

Moody’s underscores the urgency of addressing India’s water crisis, highlighting its far-reaching implications for economic stability and social welfare. Proactive measures today could safeguard India’s future against the mounting threats posed by water scarcity and climate change.