Rational Water Management

Despite being a critical resource for survival, water in India has been viewed as a free good leading to
indiscriminate usage of water. The growing water scarcity situation is now being recognized as a
genuine threat for the future. This situation has requires remedial measures from both the government
and the private sector. Besides large scale infrastructure projects, the adoption of newer technologies,
better water management practices and increased participation of private sector can go a long way in
meeting future water challenges, says Susnato Sen (Practice Head, Infrastructure) of Tata Strategic
Management Group.
Water is generally considered a resource that is
abundantly available and unlimited in supply
given the fact that three-fourth of the Earth is
covered with water. Historically, water has been
treated as a free good. But the current scenario
of water resources presents a very different
picture. ~97.5 per cent of the worlds water
resource is saline and only 2.5 per cent is fresh
water. A large part of these freshwater resources
exist in form of ice caps and glaciers. So for all
practical purposes, only 0.75 per cent of the
global fresh water resources are available for
consumption.

water driven by increasing urbanization,

industrialization and high growth in per capita
income. The UN Millennium Development goal is
availability of safe drinking water and proper
sanitation coverage for the entire population by
2015. The total water availability in India has
been estimated at ~1,120 Billion Cubic Metre
(BCM). Projections of water demand made by the
Ministry of Water Resources, Government of
India show that the demand for water will reach
~ 1,180 BCM by year 2050, thus exceeding the
potential water supply.
Also, the per capita availability of water in India
is 1,820 cubic metre/annum (cum/annum) which
is fast approaching water stress condition as
defined by FAO (Water Stressed category => Per
capita water availability < 1,700 cum/annum).
These are disconcerting facts. The other critical
concern is that water availability varies widely
across regions in India given the wide disparity in
rainfall across regions. While for example the

Breakup of Worlds Water Resources

Fresh Water
2.5 %
97.5 %
Saline Water

30%
Ice Caps
69%

Ground
Water

1%
Surface
Water

Source: The Economist, May 2010

Water Demand in 2010 (BCM)

These statistics reveal that the long held

view of water being an unlimited resource
no longer holds true and hence is an asset
that cannot be squandered away. The fact
is, at present, the world is facing a finite
supply
of
water
as
against
an
unprecedented demand growth in water
from its end users - irrigation, industry and
the household sector. India is at the
tipping point in the water sector where
there is a strong growth of demand for
1

Industrial
8%

Water Demand in 2050E (BCM)

Others
8%

Others
9%
Industrial
13%

Drinking
Purposes
6%

Drinking
Purposes
7%

Irrigation
78%

Total Demand = 710 BCM

Irrigation
71%

Total Demand = 1,180 BCM

Total Water Availability in India =

1,120 BCM
Source: CII-Tata Strategic Management Group Report on Water Sector in
Gujarat, 2010, Planning Commission; Ministry of Water Resources, GOI

Tata Strategic Management Group

North-Eastern region receives a large amount of

rainfall, the western region receives much less
rain. Such disparity also exists within states. The
state of Gujarat is a case in point and also the
focus of discussion in this paper. One of the front
running states in terms of economic growth and
industrialization, Gujarat falls under water
stressed category. Gujarats potential utilizable
water resources are put at ~50 BCM. Even if
conservatively estimated, the demand for water
in Gujarat will exceed the supply of water by
2040.
The per capita availability of water in the state is
~ 908 cum/annum which is much lower than the
national average. The disparity in water
availability can also be seen in the state with
most of the surface water availability (in form of
lakes and rivers) being concentrated in South
and Central Gujarat. This part of the state also
receives much higher rainfall than the rest. So
regions like Kutch, Saurashtra and North Gujarat
depend heavily on groundwater supply.
Water Demand Supply Situation in Gujarat

57

35

2010E

2050E

Total Water Availability in Gujarat = 50 BCM

Source: CII-Tata Strategic Management Group Report on Water

Sector in Gujarat, 2010, Indiastat Data

This brings forward the issue of making water

available from water surplus areas to water
scarce areas. This could be done through large
infrastructure investments in form of canals and
long distance pipelines. The Government of
Gujarat have taken significant steps in this
regard. Schemes like the Sardar Sarovar project
and Sujalam Suphalam and the proposed
2

Kalpasar project are expected to address

significantly the water needs of North Gujarat
and other water stressed areas of the state.
However,
the
heavy
dependence
on
groundwater, particularly in the irrigation sector,
has created problems of over drawing. In
Gujarat, like many other states in India, this has
led to dipping of ground water levels resulting in
deterioration in the quality of water with
increasing salinity and higher presence of
fluoride and nitrate that can have serious health
implications. Added to this is the further
contamination of groundwater through increased
usage of chemical fertilizers in the irrigation
sector. The existing freshwater resources are
also getting contaminated by release of
untreated industrial waste water (more
significant in the context of rapid industrialization
in Gujarat) and household waste water.
In the urban areas of Gujarat, while the urban
local bodies / municipalities have shown initiative
in improving governance, engaging private
players and financial performance, a lot still
needs to be done. A Study on Benchmarking of
Water Utilities in India by Government of India
and Asian Development Bank in 2005-06 reveal
that major cities of Gujarat like Ahmedabad,
Rajkot and Surat still need to improve on
parameters like water coverage and water
availability. Thus, a lot more needs to be done in
terms of investing in water assets and in
improving the service levels in the urban areas.
Thus, the impending water crisis has dimensions
of both quantity and quality. So what are the
possible solutions to this water crisis? The
starting point is the awareness among all the end
users of the resource that water availability is
finite and needs to be managed efficiently. Also
there is a need for innovative and effective
technological solutions for enhancing both
quantity and quality of water. For example,
water conservation in the irrigation sector can be
strengthened to a great extent through
application of micro-irrigation systems (drip or
sprinkler systems). Government of Gujarat has
Tata Strategic Management Group

invested significantly in enhancing water storage

through building of check dams and boribunds.
Rainwater harvesting is also a very good way to
save and enhance surface and groundwater.
Singapore is a case in point. The rainwater is
very effectively collected from streets, ponds and
buildings and taken by drain to reservoirs and
then on to treatment plants which produces
clean and hygienic water.
Another potential solution is waste water
recycling that results in treated recycled water
which can be have various applications in the
urban, industrial and agriculture sector or it can
be simply used for recharge of groundwater
aquifers. While emphasis should be on
conservation and reuse of existing water, there is
also a need to look at new sources of water. In
this regard, tapping the saline water of the sea
seems to be an obvious solution for future.
Historically, desalination has been a major source
of water for countries in the Middle East.
Prohibitive capital cost and plant running (highly
energy intensive) cost has limited its potential
growth so far. However, recent developments in
technology promise to reduce the cost of setting
up desalination facilities. Gujarat, along with
Tamil Nadu, is one of the leading states in India
in creating installed capacity for desalination.
However these possible solutions require massive
investments in water infrastructure, existing or
new. This has also opened up a plethora of
opportunities across the water value chain for
the private sector. These may be in the areas of
water extraction and long distance transmission,
water and waste water treatment, water supply
and distribution or desalination. There is a clear
role for private sector in this regard in providing
the technical, managerial and financial efficiency.
Government of Gujarat has taken several steps
to promote Public-Private-Partnership (PPP) in
many infrastructure sectors (including water
sector) through creation of an enabling
framework. Gujarat Industrial Development
Board has been set up to facilitate all such PPP
projects within the state. Measures like Viability
3

Gap Funding also act as a major boost in

undertaking PPP projects. There are also several
PPP projects in pipeline in the water sector.
The critical issue and challenge is enhancing
attractiveness of water projects through levying
of water tariff. At present the water tariff is not
even sufficient to cover the O&M of water assets
leave aside the capital cost. Awareness needs to
be brought in among all end user segments that
there is a need to pay for water. The goal should
be moving from recovery of O&M cost initially to
full cost recovery (also emphasized by JNNURM)
through a rationalized tariff plan keeping in
perspective ability to pay of the user segment.
The starting point could be rationalization of
tariff in the industry sector and increasing
coverage of the sector as much as possible.
However, rationalisation of water tariff in the
domestic sector is politically sensitive and will be
the real challenge. This would require creating
public awareness to pay for water in exchange
for uninterrupted availability of quality water.
Also, this may only be possible in urban areas
and that too in the long term. The evidence of
success of levying user charges in the power and
the road sector (toll roads) is encouraging and
may well be possible for the water sector.
However, it would require long and sustained
effort with demonstrated benefits for the end
user segments.
There are no short term solutions to this
challenge of addressing the impending water
crisis. All stakeholders would have to come
together to address this issue. In future, while
we envisage that private sector will join hands
with public sector and play a major role in
creating and managing water assets, end users
agriculture, society and manufacturing industry
would need to play a larger role in efficiently
using the water resources.
Tata Strategic Management Group. All rights reserved

Tata Strategic Management Group

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About the Author:

Susnato Sen is the Practice Head for Infrastructure at Tata Strategic Management Group. He has more
than 17 years of experience in the Infrastructure sector including Transportation, Special Economic
Zones, Real Estate / Land Development, Tourism, Water & Healthcare. He has worked extensively with
the Government, multilateral agencies and the private sector. His experience spans across the areas of
Business planning & Feasibility Studies, Competitive / Growth Strategy, Commercial / Market Due
diligence and Business Process Improvement.

Nirmal, 18th Floor, Nariman Point, Mumbai 400021, India

Tel 91 - 22 - 66376742 Fax 91 22 - 66376600
Url : www.tsmg.com Email : susnato.sen@tsmg.com