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The Economics of Water in India

India's Water Future

The key reforms for managing India's water - pricing, efficiency, storage and governance - and a recap of the module.

Managing water is one of India’s biggest economic challenges.

Key reforms

  • Price water above a basic free amount.
  • Reduce farm water use through crop choices and micro-irrigation.
  • Fix city pipes and reduce non-revenue water.
  • Treat and reuse wastewater.
  • Protect wetlands and recharge groundwater.
  • Cooperate across states.

Governance

  • The Ministry of Jal Shakti (2019) unified water ministries.
  • Atal Bhujal Yojana (2019) supports community groundwater management.

Module recap

  • Water is both a right and an economic good.
  • Agriculture uses around 80 percent of India’s water.
  • Cities lose 30 to 50 percent to leaks and theft.
  • 24x7 supply with metering can work.
  • Tanker markets fill gaps at high cost.
  • States fight over rivers like the Cauvery.
  • Dams bring benefits but also displacement.
  • Drip irrigation saves water.
  • India exports virtual water through rice.
  • Wastewater reuse and flood prevention save money.
The water-smart town

A town meters every connection, fixes leaks, reuses wastewater for industry and protects its lakes. It weathers droughts and floods better than its neighbours.

Thinking India lacks water entirely

Better management could stretch existing water much further.

Key takeaways
  • Pricing, efficiency and reuse are key reforms.
  • The Ministry of Jal Shakti unified water governance.
  • Community groundwater management helps.
  • Better management can stretch water further.
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