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.