MUMBAI: India’s worsening water shortage, triggered by high consumption amid rapid economic growth and frequent natural disasters, can negatively impact the South Asian nation’s sovereign credit strength, Moody’s Ratings said on Tuesday (Jun 25).
Millions of Indians face water shortages every summer when water demand rises in farms, offices and homes against a limited supply, but a prolonged heatwave this year has worsened the shortfall, including in Delhi and the southern tech hub of Bengaluru.
“This is detrimental to the credit health of the sovereign, as well as sectors that heavily consume water, such as coal power generators and steel-makers,” Moody’s Ratings said in a note.
“In the long term, investment in water management can mitigate risks from potential water shortages,” it added.
India’s average annual water availability per capita is likely to drop to 1,367 cubic meters by 2031 from an already-low 1,486 cubic meters in 2021, according to the Ministry of Water Resources.
A level below 1,700 cubic meters indicates water stress, with 1,000 cubic meters being the threshold for water scarcity, according to the ministry.
