India, home to 16 percent of the world’s population, has only 2.5 percent of the world’s land area and 4 percent of the world’s water resources at its disposal. Precipitation in the form of rain and snowfall provide over 4,000 trillion liters of fresh water to India1. Most of this freshwater returns to the seas and ocean via the many large rivers flowing across the subcontinent. A portion of this water is absorbed by the soil and is stored in underground aquifers. A much smaller percentage is stored in inland water bodies both natural and man-made. Of the 1,869 trillion liters of water reserves, only an estimated 1,122 trillion liters can be exploited due to topographic constraints and distribution effects. The demand for water has been increasing at a high pace in the past few decades. From the period of 1960 to 2013, India’s per capita availability of water has reduced from 4,100 to 1,472 cubic meters, thereby shifting India’s status from being “water adequate” to “water-stressed”. However, National Institute of Hydrology pegs India's utilizable per capita water availability at just 938 cubic meters in 2010 and expects this to drop to 814 cubic meters by 2025; Annual per capita water availability of less than 1,700 cubic meters is considered a water-stressed condition, whereas annual per capita water availability below 1,000 cubic meters is considered as a water scarcity condition.

Water shortage can have significant impact on different industry as it can lead to production cuts or worst it can lead to existential crisis. 70% of India’s energy comes from thermal power plants. Of this about 59% is from coal-based plants. In terms of water consumption, power plants consume 1700 to 7000 m3 per MW per year water. Water is increasingly becoming an area of concern and a very big challenge for power plants, as there is uncertainty associated to sustainable supply of the water resource to the existing plants and the new ones to come. Consider the scenario of a 1,000 MW power plant having to shut operations for one day due to unavailability of water. The potential revenue loss (assuming Rs 3/unit) would be nearly Rs 5-6 Cr. Thermal power alone consumed around 80% of the total demand for water in Industries.

One of the worst droughts in decades this year prompted Maharashtra to cut water supply to industry by as much as 50%. Mangalore Refinery & Petrochemicals Ltd shut a crude unit in southern India, and National Thermal Power Corporation (NTPC) Ltd closed down a thermal plant in the eastern part of the country. In the month of May this year, MRPL reported lower capacity utilization at its 15 mt refinery & stated that it can only operate 8 mt of capacity due to water shortage. MRPL reported to the stock exchanges that the acute shortage of fresh water in the river Nethravathi in absence of summer showers has led to partial shutdown of MRPL refinery complex process units as a force majeure. MRPL has also been trying to maximize use of sewage water and is building a desalination plant that is scheduled to be ready by September 2020 and will use sea water. The Maharashtra Industrial Development Corporation (MIDC) has been forced to impose 50% water cut in Sinnar industrial estate as the water level in Chehadi weir, which supplies water to the area, has depleted. Greater Visakhapatnam Municipal Corporation (GVMC) resorted to cut of around 25 per cent of its supplies from Tatipudi and Raiwada reservoirs to industries from December 1, 2018, due to deficit rainfall this monsoon season.

Modi’s government recognizes the problem. Last year the government required all companies that use groundwater to obtain permission for the first time. In April, environment minister Prakesh Javadekar said India would aim to reduce industrial water usage by half in the next five years using the latest technology to reuse, recover and recycle water. In times of shortages, factories are often the first to get hit. Although industry accounts for only 8% of India’s water use, authorities are reluctant to cut the more than 80% that goes to irrigation and domestic use. According to Anette Andersson, a Stockholm-based fund manager at SEB Investment Management AB who manages $366 million in assets, the dearth of water may deter companies from setting up production facilities in India

The report of a committee that looked into the restructuring of the Central Water Commission and the Central Ground Water Board paints a grave picture, noting that many of India’s peninsular rivers face a crisis of post-monsoon flows. Water tables are falling in most parts and there is fluoride, arsenic, mercury and even uranium in groundwater. The Central Pollution Control Board has doubled the number of 'polluted' rivers from 121 to 275 in the last five years, blaming the huge quantities of untreated sewage being dumped into our rivers for this state of affairs. The CPCB collated monthly water quality analysis figures submitted by all state pollution control boards between 2015 and 2016. The State Pollution Control Boards evaluated 275 rivers across 29 states through 1,275 monitoring stations on the basis of their biochemical oxygen demand – the concentration of oxygen required for sustaining aquatic life – under the National Water Quality Monitoring Programme. The report found that while Maharashtra had 49 polluted river stretches, including Mithi, Godavari, Bhima, Krishna, Ulhas, Tapi, Kundalika, Panchganga, Mula-Mutha, Pelhar, Penganga and Vaitarna, among others, Assam ranked second at 28, Madhya Pradesh third with 21, Gujarat 20, and West Bengal 17.

InfraInsights research report “Quantifying Potential Impact of Water Shortage on Different Industries in India: Identifying Go-No Go regions for new capex & industrial clusters that might face existential crisis”, aims to do a critical analysis of the situation and its anticipated impact on different industries. The report will do a quantitative analysis of the risk quantum attached with each industry and how it is likely to worsen or improve. Report will be indispensable source of information for industry as well as project financiers to take an informed decision on no-go areas as far fresh investments are concerned.

  1. Executive Summary
  2. Research approach & methodology
  3. Water resources in India
    1. Surface water
      1. Dams
      2. Rivers
      3. Lakes
    2. Underground water
  4. Water & Indian Economy
    1. Correlating macroeconomics with water availability
  5. Water demand supply landscape in India
    1. Demand
      1. Agriculture
      2. Industry
      3. Domestic
      4. Others
    2. Supply
      1. Dams
      2. Reservoirs
      3. Lakes
      4. Others
  6. Regulations governing water usage in industries
    1. Governance structure
    2. Regulations & compliance
  7. Water requirement, usage, source & conservation practices adopted in different Industries
    1. Power
    2. Steel
    3. Refinery
    4. Chemical
    5. Paper
    6. Textile
    7. Automotive
    8. Cement
    9. Agriculture
    10. Others
  8. Estimating the total water demand of different Industries in India by 2030
    1. At existing operational capacity
    2. At planned capacity
  9. Projecting Industrial demand for water by 2030
  10. Quantifying potential risk to different industries due to water shortage
    1. Worst case scenario
    2. Best case scenario
  11. Water conversation blueprint / Initiatives in India
    1. river Interlinking project
    2. state level initiative
  12. Identifying states / regions that are likely to face acute water shortage
    1. Industry clusters in the region
      1. Capacities in different sector that may face existential crisis
      2. Steel, Cement, Power, Chemical, Paper etc..plant level analysis
    2. Go-No Go area for new investment across industry segments
    3. Quantitative framework
      1. Monsoon
      2. Water reserves – Surface & ground water
      3. Water infrastructure
      4. Water recycling & reuse
      5. Government initiatives
      6. Domestic drinking water availability
  13. Opportunity for augmenting water treatment and reuse infrastructure in India
    1. Industry level
    2. Municipal level
  14. Opportunity for water de-salination plants in India

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