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

It is imperative to note that there is immense pressure on India’s natural resources as with 17% of the world’s total population is dependent on 2.5% of the world’s land and 4% of the total usable water resources

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

 The widening gap between demand for water and its supply is estimated to reach as high as about 50 percent by 2030 and plugging this huge gap would need an additional investment of about US$ 291 billion, noted a just-concluded ASSOCHAM-PwC joint 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 of 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 US$ 215 bn followed by groundwater (US$ 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 US$ 27 bn and US$ 4 bn respectively.

An additional US$ 25 bn would be required as part of capital and Operations and Maintenance (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.

It is imperative to note that there is immense pressure on India’s natural resources as with 17 percent of the world’s total population, its economic activities, ambitions and needs are dependent on 2.5 percent of the world’s land and 4 percent of the total usable water resources.

Thus creating a robust water infrastructure through efforts and funding in capital and O&M 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 report.

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

“The projected 69 percent 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 percent 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 would collectively withdraw five times more water than they would actually consume.”

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 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.

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