Drought will cost India $100 bn. Here’s how industry can weather the storm

  • KumKum Dasgupta
  • Updated: Jun 02, 2016 16:44 IST
With more than a quarter of the population in the grip of drought accompanied by drinking water shortage and agriculture distress, the impact on industry is huge. (Hindustan Times)

Drought in 10 states of India is estimated to impact the economy by at least Rs 6,50,000 crore as about 33 crore people across 256 districts are facing the grave situation, a study ---- India’s Deepening Water Crisis, Water Risks for Indian Industries ---- revealed recently.

In an interview with Hindustan Times, Dhruv M Sawhney, Chairman, Confederation of Indian Industry (CII)-Triveni Water Institute, Past President CII, and Chairman and Managing Director, Triveni Engineering Industries Limited, and Kamal Vatta (Director) and Romit Sen (Deputy Director) , Centers for International Projects Trust, the India Office of Columbia Water Center, talk about the crisis and solutions for future.

Q: What has been the impact of drought on Indian industry?

Dhruv M Sawhney: With more than a quarter of the population in the grip of drought accompanied by drinking water shortage and agriculture distress, the impact on industry is huge. The drought entails a loss in the form of productive capital damage as a direct consequence of water scarcity or power cuts. In order to adapt, many sectors are operating below its optimal production capacities. The various categories of industries that have been affected include thermal power plants, iron and steel industry, agro-based industries, food products and beverages, textiles, and pulp and paper. With civic bodies imposing cuts on water supply to industry across several states, the resultant shortage could pull down the Index of Industrial Production growth by around 40-50 basis points while the manufacturing sector alone could take a hit of about 50-75 basis points.

Read: Confederation of Indian Industry (CII)-Triveni Water Institute

Kamal Vatta and Romit Sen: The biggest impact of drought is on the physical access to water for industries. During drought months, the State’s water allocation policies give priority to drinking and agricultural use. This year, there have been instances where thermal power plants in West Bengal, Karnataka and Maharashtra had to shut down due to lack of water. Another impact of drought is on groundwater availability. Groundwater is a major source of water for industries (around 55% of industrial water use comes from it). A rapid decline in groundwater has an impact on both the availability and quality of water for sectors like food and beverages.

Read: Centers for International Projects Trust

Q: Give us some examples of companies taking initiatives tackle the problem

Dhruv M Sawhney: The CII-Triveni Water Institute has undertaken about 120 water audits across industries, resulting in potential annual water savings of about 85 billion litres of water, which is equivalent to supplying one day of fresh water to the rural population. Results show that 15-20% water savings are possible by low-cost strategies with payback in four to five months and 30-40% water savings can be achieved by medium-high cost strategies with payback 12-18 months.

CII-TWI has also undertaken watershed evaluation study in Maharashtra using its Water Resource Evaluation and Planning Tool (WATSCAN) to devise community-centric water management interventions. The study revealed that through implementation of both supply and demand side interventions such as moving to combination of Dams and Dykes (i.e., a combined surface and sub-surface system), enhancing existing storages for optimal utilisation of monsoon flows, initiating municipal-agriculture interface and municipal-industry interface, irrigation optimisation through soil-moisture conservation, it is possible to alter the landscape of the area with impacts visible from second year. The direct outcomes include increased per capita water, per hectare water and increased incomes and livelihoods, leading to transformation of the area.

Read: Water Stress Index – India

Another good initiative has been in Alwar, Rajasthan and in Sonepat, Haryana, where CII in partnership with SABMiller India has been working towards a strategy that enables groundwater sustainability.

Read: Cheap agriculture loans to cushion impact of weather shocks, droughts

ITC Ltd has undertaken Integrated Watershed Management project in Bundi district, Rajasthan. Through mobilisation of local communities to form water user groups to assisting them to revive and maintain micro water harvesting and carrying soil and water conservation measures, the area under irrigation has been increased leading to productivity benefits. These translate into better incomes and livelihoods for the community while saving water.

Read: Drought impact: Maharashtra resorts to drastic water cuts for industries, breweries

Romit Sen and Kamal Vatta: Many companies are undertaking water audits to understand water consumption patterns and develop mitigation measures. In addition, companies are also adopting rainwater harvesting and wastewater treatment and reuse. There are instances where companies located in high-rainfall areas such as Bihar are using harvested water for industrial production and recharge. One of the main reasons for companies to undertake wastewater treatment is the declining availability of freshwater. Industries see a merit and a higher economic value in reusing wastewater for purposes where water quality is not an important criterion. Using the treated wastewater for horticulture, gardening, cleaning, activities like fire-fighting and dust suppression activities is the most preferred choice for the industries.

Read: India’s Deepening Water Crisis: Water Risks for Indian Industries

Q. Water crisis is a reality. What should be the way forward for Indian industry.

Dhruv M Sawhney: Based on the work and analysis undertaken by the CII-Triveni Water Institute, CII’s Center of Excellence on Water, recommendations are: Make water audits compulsory; connect with municipalities, where treated municipal sewage could be used by Industry for its various uses; incentivise wastewater recycling, rainwater harvesting etc., and introduce policy reforms and progressive measures for innovations, conservation and efficient utilization of resources and undertake watershed based district and sub-district level water resources planning using state-of-the-art hydrological tools and techniques such as WATSCAN that scientifically identifies areas of high & low water generation, accumulation and loses, identifying basket of strategies for an improved water scenario.

Romit Sen and Kamal Vatta: The way forward for the industrial sector lies in adopting a mix of measures that range from moving towards adoption of technologies that consume less water, to improving water-use efficiency, to effective water harvesting (both at unit level and at the catchment level), recycling and reuse. A major aspect that policy makers need to look at while developing industrial policies and attracting investments is – how do they ensure that industries coming up in their state have access to resources like water? An approach that defines water availability and demand for each state needs to be drawn out for a realistic estimation current water scenario, its allocation and use by various sectors.

Read: Don’t blame nature for the drought in Bundelkhand

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