“Growing water stress can negatively affect India’s sovereign credit strength”, it said in a report.
Investment in water management for the long term can mitigate risks from potential water shortages, it added.
While fast economic growth and rapid industrialization and urbanization, are reducing water availability higher severity or durations of extreme climate events could exacerbate the situation because India heavily relies on monsoon rainfall for water supply.
The decrease in water supply can disrupt agricultural production and industrial operations, leading to inflation in food prices and lower income for affected businesses.
Among the industries, coal-based power generators and steelmakers that heavily depend on water can see disruption in their operations and impact on revenue generation.Investment in water infrastructure and renewable energy can mitigate risks for the country, power generators and steelmakers in the long term.The Indian government is investing in water infrastructure and making a push for the development of renewable energy, the report said.
Heavy industrial consumers of water are also looking to improve the efficiency of their water use.
The efforts can reduce water management risks for both the country and the companies in the long term.
India’s burgeoning sustainable finance market can help companies finance water investment. The sustainable finance market in India is small but developing fast. It can provide companies and regional governments with a critical avenue to raise funds.
Some states facing severe water shortages have used the sustainable finance market to raise funds for investment in water management.
Content Source: economictimes.indiatimes.com