On June 22, 2024, a Delhi JAL tanker was seen filling up water during the water crisis in Delhi’s Balji Nagar.
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Moody’s Ratings said India’s severe water shortages could damage its sovereign credit strength and warned that the water crisis could lead to social unrest if the agricultural and industrial sectors are disrupted.
Rapid industrialization and urbanization, coupled with rapid economic expansion, have led to severe water shortages.
Extreme weather conditions such as heat waves and droughts are exacerbating the situation, putting the world’s most populous country at risk, Moody’s said in a report on Tuesday, warning that water shortages could damage the country’s sovereign credit health.
Credit rating agencies give stable outlook India Baa3 rating.
India relies heavily on monsoon rains for its water supply but is also prone to harsh and extreme weather conditions
Delhi, one of the most densely populated cities in the world with over 200 million people, is currently in the grip of a water crisis.
“There are 2.8 million people in this city who need just a drop of water,” Delhi Water Minister Atish said on Monday. worsening of health.
Given that more than 40% of India’s workforce is engaged in agriculture, this in turn will increase the volatility of India’s economic growth and undermine the economy’s ability to withstand shocks.
Last week, the Minister Announced that she would join a hunger strike That was until the northern Indian state of Haryana released more water from the Yamuna River to Delhi, citing a reduction of 110 million gallons of water per day.
In early June, the minister said the city was facing a water shortage of 50 million gallons per day due to lack of raw water supply from the Yamuna river and other sources. Economic Times report.
Moody’s warned that water shortages could disrupt agricultural production and industrial operations, “resulting in higher food prices, lower incomes for affected businesses and workers, especially farmers, and triggering social unrest.”
“Given that more than 40% of India’s workforce is engaged in agriculture, this in turn will increase the volatility of India’s economic growth and weaken the economy’s ability to withstand shocks.”
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“Reduced water supplies could disrupt agricultural production and industrial operations, leading to higher food prices, lower incomes for affected businesses and communities, and triggering social chaos.
“This, in turn, will increase the volatility of India’s economic growth and weaken the economy’s ability to withstand shocks,” the report said.
Water supplies are expected to decrease by 1,367 cubic meters by 2031, the company said.
according to Ministry of Water Resources of Indiawater shortage is defined as when the water level is lower than 1,700 cubic meters, and water shortage is defined as when the supply is lower than 1,000 cubic meters.
most dangerous industry
Moody’s stressed that water-reliant industries such as coal power generators and steelmakers will be hardest hit, explaining that operational disruptions will hamper revenue growth and weaken credit strength.
“In India, thermal power plants are by far the largest consumer of water as the country relies heavily on coal for electricity generation,” the report states.
“As water shortages intensify, coal-fired power plants in water-stressed areas may face operational disruptions during droughts, as ensuring drinking water becomes more important than supplying water to businesses.”
Moody’s said greater investment in water infrastructure and renewable energy could mitigate these risks and improve water efficiency.
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