Approximately 16% of the world’s population resides in India, while the country has only 4% share of the global water resources. Demand for water has increased rapidly in the past few decades with the growing population. India’s per capita water availability has come down from about 5,177 m3 in 1951 to 1,654 m3 in 2007 to about 1250 m3 at present. India stands water stressed and is close to being categorized ‘water scarce’ country. About 75% of India’s population lives in water-stressed regions India’s fourteen major river systems are already stressed due to overconsumption. Water tables have gone down at a widespread scale, along with rising levels of contamination. A combination of water mismanagement and climatic conditions has created a scenario of water crisis in India, which is set to get worse in the times to come as the overall population is expected to increase to 1.6 billion by year 2050.
India’s water crisis is often attributed to lack of government planning, industrial and human waste and government corruption. However, a fast growing economy and a large agricultural sector are constantly adding pressure on the water resource. Industrial water demand in India may surge 57% by 2025, with the Asian country being the most water-stressed among the Group of 20 nations, and it has begun pinching India Inc already. Disputes with farmers demanding rights to their irrigated land have stalled about $80 billion of investment by companies including Posco and ArcelorMittal. Tata Steel Ltd. (TATA), India’s biggest maker of the alloy, is setting annual targets to cut water usage as two-thirds of the country faces a scarcity.
In India, agriculture consumes the largest quantity of water. The industrial and residential segments account for the rest of water consumption. On an average, India’s current water consumption is approximately 581 TL (teraliters), with irrigation needs accounting for a massive 85-90%, followed by domestic use and industrial consumption at about 5% each.
Population growth and increased per capita water Consumption are driving demand for water at the household level. Expansion of the water intensive industries like power, iron & steel and chemical is adding to the existing water demand at a very accelerated pace. The fast rate of population growth is proportionately translating into rise in demand for food grain. Widely grown crops such as wheat and rice are water intensive. Poor water management, especially in the primary sector can be held responsible for increase in demand in a way.
The dual concerns of ever increasing demand and unsustainable use of water resource can be tackled to a large extent by improved water management. I believe it is essential to talk about measurement before management. Effective management strategy critically depends on assessment of the problem, and hence the importance measurement of the consumption of water at every stage is but a necessary step before devising any water management strategy.
Reporting of water footprint should become a government mandate for commercial units that consume more than a critical benchmark. A lot of focus country-wide must be laid on water metering as well. This must be done all the more in the agricultural sector given that the sector consumes well over 80% of the available water resource and that any right move in this sector will potentially fetch greater benefits in magnitude. Adequate water pricing is another important area that leads to reduced wastages. Water is mostly under-priced, and not even implemented largely because of missing meters.
Widespread promotion of simple yet effective technologies such as drip irrigation or micro irrigation (which saves water by allowing it to drip slowly to the roots of plants, either onto the soil surface or directly onto the root zone, through a network of valves, pipes, tubing, and emitters) must be adopted and large number of training workshops must be conducted all over the country. This one practise alone can address water woes on many farm lands.
Conservation techniques form yet another area where India needs to take steps. The most essential conservation measure pertains to stopping wastage due to leakages. Old and faulty water distribution systems, including rusted pipelines and loose valves, have been reasons for loss of volumes of water beyond imagination. For example, in 2012, Pune Municipal Corporation suffered water loss due to leakages anywhere between 25% and 40%. Just to put things in perspective to highlight the leakage saving potential, let me give you an example from one of Envecologic’s internal research on water sustainability. National Water Company (NWC), a major player in the Kingdom of Saudi Arabia, saved about $160m worth of water in 2011 by fixing leakages along some of their pipelines. Pune is just one example, however, there are many other municipal corporations that are facing the similar challenge of loss of large volumes of water due to leakages. A lesson needs to be learnt from NWC who used modern technologies to detect invisible water leaks. Audio equipments and radars were used to examine water networks and detection of leakages, which India essentially needs to put to use, especially by the major municipal corporation in the country.
Rising population and industrial growth coupled with growing government compliance for treating and using sewage water for non-potable purposes, will help the sewage treatment plants to hold a major share in waste water treatment plants market over the next half decade. The wastewater treatment plants market in India will grow at an average rate of 13-15% per annum over the next five years. Mandatory obligation for every industry to have effluent treatment plant in their vicinity to treat wastewater has been boosting this segment of the water industry. The government of India is expected to make it compulsory to install effluent treatment plants in restaurants and food joints as well, further adding to the prospective growth potential.
The funding allocation for Water Supply and Sanitation in the 12th five year plan (2012-2017) is estimated to be Rs 5,000 crore. Private sector and PPP-based investments, which contributed to about 30% of the total investments in the 11th five year plan, has risen to 50% in the 12th plan. A Viability Gap Funding Scheme has been set up as a special facility to support the financial viability of those infrastructure projects that are economically justifiable, but not viable commercially in the immediate future. It involves upfront grant assistance of up to 20% of the project cost for state or central public-private partnership (PPP) projects that are implemented by a private sector developer selected through competitive bidding. Such huge allocations are sure to boost the sector in the coming years, which will witness the upsurge of large number of private players. There is also growing interest in private equity funds to invest in water and wastewater treatment companies.
Besides the municipal corporations, growth of certain sectors will continue to drive the wastewater industry’s growth. Power sector is a fast growing end-user segment for both water and wastewater treatment. Similarly, the growth of pharmaceuticals and chemicals has supported the high purity process water markets.
While the wastewater treatment sector offers immense opportunities, it is not devoid of challenges that can stun the growth if not addressed. The biggest impediment towards achieving scale in the sector is large sums of initial investment which keeps many private sectors players at bay. Although major allocations have been made in the five year plans, more of public private partnerships are yet to be seen. The market is fragmented with more than 500 participants of which around 20 are large and the rest are small companies. Operating as a small company is not very fruitful and only large investment can help them achieve the benefits of economies of scale that will keep cost of operation low. Finally, the biggest challenge comes from the fact that both government and private players are slow with technological advancements. Large number of foreign collaborations and technology transfers are still far from reality, making it difficult for supply to catch up with the pacing demand.
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