Water Management in India...

Ref. No.: ME0002

Water Management in India: An Offspin of Scarcity?

India is blessed with many rivers. Monsoon rules most part of the country months long. Yet
studies carried out on water management have confirmed scarcity of water in many parts of India.
The issue of water scarcity needs careful handling by the economic agents such as the policy-makers,
producers, politicians and consumers. If the oil prices rise, the economic agents can reduce oil
consumption by sticking to ‘stacations’1, resorting to car pooling, purchasing more fuel efficient
vehicles or shifting closer to their workplaces. But this is not the case with water-related issues as
water is the very basis of food and livelihood. Agriculture, real estate boom, urbanisation, demographic
features, behaviour patterns are among the various factors that account for huge pressure on water.
India being a predominantly agricultural country, there is an enormous need for water to raise a
variety of crops. Nearly 84% of available water is used for the agricultural sector in India and the
remaining 16% is used for the purposes of industrial and household consumption. Farmers in India
largely produce paddy which consumes a lot of water. If they are unable to cultivate paddy, they
assume that they have no resources even if they have huge bank balances. This is due to the fact that
in rural areas, paddy is treated as an embodiment of the goddess of wealth. The people in rural India
are overly dependent on agriculture for their living. In this scenario, it is very difficult to transform the
economy from one based on agriculture sector to one based on manufacture and service-sectors.
Most of the tanks and lakes have been converted into construction sites for housing which has
further intensified the water problem. The frequent droughts, floods and disguised unemployment
across rural areas – reflective of policy failures at various levels in tackling the rural issues in India –
are the major causes of migration from rural to urban areas in India. Migration of this sort has been
continuously building pressure on demand for water across India. Due to rise in population, demand
for drinking water in India has stood at 20 billion Cubic Metre (BCM) per year. With 450 millon
Indians going to cross the age of 19 by the end of this year the future drinking water demand of

1
Stacations means stay at vacations.

This case study was written by Dr. S. Venkata Seshaiah, Associate Dean and Professor (Department of Economics), IBS, Hyderabad.
It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a
management situation. The case was written from published sources.

© 2009, IBSCDC.
No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever
without the permission of the copyright owner.

Background Reading: Chapter 1, “The Fundamentals of Economics”,

Economics (Paul A. Samuelson and William D. Nordhaus)

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 Water Management in India...

young India is projected to be 51.33 BCM per year. Indians now-a-days tend to instal and use
european style toilets which consume a large amount of water. In thickly populated countries like
India, water is becoming a scarce resource year after year. Hence efficient water management has
become the need of the hour.

Present Use and Future Requirement of Water

According to the statistics of the Government of Maharashtra, 95% of the urban population
depend on tap water as their source of drinking water. Of the rural population, 50% depend on tap
water, 27% on wells and 20% on hand pumps (Exhibit I).

Exhibit I
Distribution of Households by Major Source of Drinking Water(%)

Major Source Rural Urban

Tap 50.40 95.00
Tube well/Hand pump 20.60 3.10
Well 27.20 1.60
Other 1.80 0.30
Total 100.00 100.00

Source: “Economic Survey of Maharashtra 2002-03”, Directorate of Economics and Statistics, Planning Department,
Government of Maharashtra

The usage of water increased across all the sectors and was projected to keep this upward trend.
Irrigation continues to exert a major demand on water(Exhibit II).

Exhibit II
Sector-Wise Present Water-Use and Future Requirement (1990–2050)
Year Population Sector wise Water-use and Future Requirements (million hectare-metres)
(million) Domestic Industry Thermal Total
Irrigation and Livestock Power
1990 800 46.0 2.5 1.5 3.0 53
2000 1,000 63.0 3.4 3.6 5.0 75
2025 1,400 77.0 5.0 12.0 16.0 110
2050 1,700 70.0 6.0 20.0 16.0 112

Note: Figures on population, past water-use and future water requirements are approximate.
Source: “Urban Statistics, Hand Book 2000”, National Institute of Urban AffairsStatistics, Planning Department, Government
of Maharashtra

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 Water Management in India...

The demand for drinking water is continuously increasing and will compound in the future. It is
projected to rise from 49,935 BCM to 140,650 BCM as per the UN report and from 43,065 BCM to
100,755 BCM as per the Census report within a span of 50 years between 2001 and 2050 (Exhibit
III).This amounts to roughly threefold increase in the demand for drinking water in India.

Exhibit III
Future Drinking Water Demand in India
Year Total Water Demand* BCM/Year
Based on Past Based on UN Based on Past Based on UN
Census Projection Census Projection
2001 43,065 49,935 15.72 16.03
2011 54,810 63,555 20 23.2
2021 66,555 83,375 24.29 30.43
2025 71,340 91,350 26.04 33.34
2050 100,755 140,650 36.77 51.33
* The water demand has been worked out @ 170 lpcd for 65% of the urban population presumed to
be living in Class 1 cities and @ 100 litre per capita daily (lpcd) for balance 35% of the urban
population living in Class 2 cities. (Report of the National Commission for Integrated Water Resource
Development Plan.)

Source : National Commission for Women

While the dam-wise water level in India has been declining for all the water reservoirs except
Matatila reservoir (Exhibit IV), waste water generation in India keeps on increasing decade after
decade (Exhibit V).

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 Water Management in India...

Exhibit IV
Dam-wise Water Level in India (2007–2008)
Dam Reservoir level (ft.) Reservoir level (ft.) Deviation
Date Level Date Level (-)/ (+) of
level w.r.t.
last year
Bhakra 6.3.08 1,553.53 6.3.07 1,596.10 (-)42.57
Pong 6.3.08 1,297.98 6.3.07 1,344.69 (-)46.71
Thein Dam (Ranjit Sagar) 6.3.08 1,632.02 6.3.07 1,648.98 (-)16.96
Rihand 6.3.08 842 6.3.07 843.70 (-)1.7
Matatila 5.2.08 997.11 5.2.07 994.19 (+)2.92
Gandhi Sagar 6.3.08 1,273.98 6.3.07 1,291.21 (-)17.23
Bansagar 28.2.08 1,079.13 28.2.07 1,084.78 (-)5.65
Indira Sagar 6.3.08 815.94 6.3.07 817.78 (-)1.84
Bargi 23.2.08 1,353.35 23.2.07 1,356.96 (-)3.61
Source: Lok Sabha unstarred question no. 2192, dated on 14.03.2008.

Data may be reproduced for research, analysis, survey, review, studies and such other academic purposes with due
acknowledgement.

In less than two decades (1977–1995) waste water generation in India has more than doubled
from 7,007 mld to 16,662 mld.

Exhibit V
Population and Waste Water Generation in India
Year Urban Litres/Capita/ Gross Waste Water
Population Day (lpcd) Generation (mld)
1977–1978 60 116 7007
1989–1990 102 119 12,145
1994–1995 128 130 16,662
2001 285 – –
2011 373 – –
2021 488 121 (A) 59,048 (P)
2031 638 121 (A) 77,198 (P)
2041 835 121 (A) 101,035 (P)
2051 1,093 121 (A) 132,253 (P)
Source : Ministry of Environment and Forests, Government of India
P: Indicates Projected A: Indicates Assumed

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 Water Management in India...

Situation Analysis and Strategy Agenda

As per the projected statistics given in Exhibit II, the population of India could be between
1.7 billion by the year 2050. With the rise in population, the demand for water is going to
intensify for domestic use, farm irrigation and industrial purposes. It is, therefore, imperative
that everybody involved in the process of consumption of water should coordinate and take
measures to make optimal use of scarce water resource. The municipal corporations should
focus on providing water services and other government agencies should handle the development
and monitoring aspects of water management. Through proper distribution of functions and
responsibilities, efficient water management can be carried out. The usage characteristic of water
has both the necessity and luxury dimensions. Hence, there is a need for introducing user fee.
While imposing the user fee, the government should pay attention to charging lower fee for
necessary consumption and higher fee for luxury consumption.
Proper awareness programmes need to be designed and conducted for the public by appointing
water saving and usage committees in villages, towns, cities and metros. These committees should
explain the repercussions of water wastage and water pollution on health, environment and overall
economic activity. These committees should also raise awareness among the farmers on cash crops
and encourage them to cultivate the crops that consume less water. It is very difficult to manage water
problem in India until and unless water usage is guided by the principles of market driven economy.
But it is debatable whether market price of water – reflective of its scarcity – holds the promise for its
efficient allocation.

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