India Ratings’ Devendra Pant on how water shortage can impact economic growth

Devendra Pant, Chief Economist, India Ratings, says how quickly we solve and take steps to reduce water wastage is important. Other than agriculture, manufacturing is also getting impacted; further, hydroelectricity production will be impacted. So, saying that it will not have any impact or it is transitory is not correct. It is a major issue, a major challenge, which the policymakers and citizens have to think seriously about.

We are a country with scarce water resources. What is required to be changed to get back on the path of moving towards the better side? Also, how do you see this not impacting the economic growth? What is it that one will require in this crisis right now?
Devendra Pant: I will just add one more phenomenon. The total water that we receive through 80 to 100 hours of rainfall goes down either to the Arabian Sea or to the Bay of Bengal. We have built all those storage systems but somehow, we are not able to make the best use of the monsoon rainfall. Having said that, as incomes keep growing, we will see more lifestyle changes and more water requirements. Compared to water consumption say a decade back, now the consumption or demand is much more.

The first thing it affects is drinking water. The second it affects is agriculture. We have improved our irrigation intensity. But if the reservoirs do not have that kind of water storage, then that irrigation intensity will not give us the results or will not give the returns. We have made some progress in having some seeds that will be able to withstand some of these rain shocks, which can withstand higher water, or which can grow in less water, but that is again more on the drawing board stage. We have not seen them across the country.

Is this only a transient issue and only a mistiming of monsoon and rains or do you think this is something that can throw a curveball at India's growth story? We were facing a lot of electricity deficit, which was perhaps slowing down the potential of growth; is water another lever that could slow down the GDP growth?
Devendra Pant: Unfortunately, it is not transitory because of the climate change we are seeing across the globe. Extreme weather event frequency is continuously increasing and it leads to everything like CO2 emission because of deforestation. So, yes, water scarcity is going to have an impact. and not only in agriculture, unless we develop or have those seeds and those crops that can withstand extreme weather conditions.

For example, in the northeast, annual rainfall is way too high. So, even in the northeast, there is a 20% rainfall storage, but the amount of rainfall that takes place in the northeastern region, it is unlikely to have a significant impact on agriculture. In Punjab, Haryana, western UP, land is irrigated. But at the end of the day, that irrigation water is the stored rain water that is being used. So, there is no doubt that the water problem is not transitory. It is there to stay.

How quickly we solve and take steps to reduce water wastage is the issue. Other than agriculture, manufacturing is also getting impacted; further, hydroelectricity production will be impacted. So, saying that it will not have any impact or it is transitory is not correct. It is a major issue, a major challenge, which the policymakers, they are thinking about but everyone, citizens also have to think seriously about this.