The Gist of Yojana: September 2016

The Gist of Yojana: September 2016

Role of Water Resources Management in Economic Development

India is experiencing a high average annual economic growth of 7.28 percent since 2002-03. The growth by consumption of fixed capital (man-made capital), but also by natural resources. Apart from goods and services, production and consumption processes also generate pollution and wastes which are deposited into the environment (air, water and land). In addition to direct use as inputs, environment acts as sink of wastes and assimilates the pollution load. If pollution load exceeds the assimilation capacity of the environment (air, water and local), it causes environmental degradation (air and water pollution, soil (land) degradation). The unpaid ecosystem services of the environment (e.g., pollution assimilation) as a factor of production and the depletion and degradation of some natural resources (like air, water and soil pollution) are not accounted into the present System of National Accounts (SNA); as a result it is difficult to understand the actual environmental debt of Indian economy.

In India, growing population and rising demands will further enhance the dependence on environment both as a source of natural resources and as sink for wastes. Apart from local environmental impacts, climate change induced vulnerability of 300 million coastal population of India, temporal and spatial variability of monsoons, retreat of glaciers and so on could be detrimental to our socio-economic development. In the Global Risks Report 2016, World Economic Forum (2016) lists water crisis as the largest global risk in terms of potential impact. There are several dimensions of water scarcity - physical, economic and environmental (related to water quality). Increasing population pressure, large scale urbanisation, rising economic activities, changing consumption patterns, improving living standards, climate variability, expansion of irrigated agriculture and changing cropping pattern towards water intensive crops are among the major drivers for rising demand for water. Ever-increasing demand for, freshwater in the last few decades and large scale temporal and spatial variations in availability and demand are among the major causes for water scarcity. The origin of water scarcity is the geographic (spatial) and temporal mismatch between freshwater demand and availability.

Being the largest user of water, water scarcity impacts the irrigated agriculture substantially. Depending on severity of the scarcity, impact on agriculture varies. Any fall in agricultural productivity or crop failure in the extreme situation leads to loss of livelihoods for the farmers. However, water scarcity induced impacts on livelihood is not -uniform across all farmers. It depends on mitigation and adaptation capacity/ strategy of the farmers to absorb any volatility in water availability as well as socio-economic situation of the farmers. Crop choice plays an important role to mitigate water scarcity in arid and semi-arid regions. Farmers’ access to information on water availability arid any probability of drought prior to sowing the crops could help them to choose the right crops to mitigate the impact of water scarcity. The diversification of the livelihood basket could be the best option for adaptation. Famers who do not depend on agriculture alone for their livelihoods could adapt to water scarcity. Fall in income in agriculture spreads across all sectors of the economy through backward and forward linkages.

Impact of water scarcity on manufacturing and service sectors will differ depending on their water intensities. It is expected that in the manufacturing sector, water intensive industrial activities like textile bleaching and dyeing, leather processing, food processing and beverages, pulp and paper industries will bear the maximum impact of water scarcity. In the service sector, maximum impacts will be on hospitality (hotels and restaurants), medical services (hospitals) and construction/real estate sector. In textile bleaching and dyeing clusters in South India, water is purchased in tankers from surrounding villages. Though the industrial use of water is very low when compared to agricultural use, the disposal of industrial effluents on land and/or on surface water bodies make water resources unsuitable for other uses. By avoiding cost of pollution abatement, which is a private cost, manufacturing units could transfer the cost to the society at large by not following prescribed standards for industrial effluent disposal.

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