Is India’s economic growth story dehydrating country?

Is India’s economic growth story dehydrating country?

India has done worse than other growing nations in managing its water resources. A key factor behind this maybe an inefficient agriculture sector, where the use of tube well-based irrigation in the last three decades has shot up

In 2010, Aurangabad district in Maharashtra grabbed the headlines when it made the record books for placing the biggest bulk order for Mercedes Benz luxury cars; 65 cars worth ₹150 crore were bought in one go. Today, this district is witnessing a booming demand for a completely different kind of product: water tankers. A Hindustan Times story by How India Lives shows that the demand for water tankers between the first week of May and the third week of June in Aurangabad doubled, from 3,934 to 7,830, between 2018 and 2019. Aurangabad had the highest orders for tankers among all districts in Maharashtra (excluding Mumbai) both 2018 and 2019. The story of Aurangabad, where rising private wealth and a deepening ecological crisis have gone hand in hand, is symptomatic of the larger Indian growth story.

The conflict between economic growth and environmental destruction, of which water scarcity is now an important aspect, is often seen as a given. However, India has done much worse on this front than others.

A comparison with China using World Bank statistics proves this point. In 1962, India’s per capita GDP (in 2010 constant dollars) was almost twice that of China. India’s renewable internal freshwater resources per capita (henceforth per capita water), measured in cubic metres, was 75% of what it was for China in 1962. By 2014, the latest period for which water statistics are available, India’s per capita water had become 54% of what it was for China, even as China’s 2014 per capita GDP became 3.7 times that of India.

To be sure, the statistics quoted above also show that the rate of decline in India’s per capita water has been slowing down over the years. The compound annual decline rate in India’s per capita water was more than 2% until the 1980s. It has improved to 1.2% between 2012 and 2014. Even here, China has been able to do even better.

It has managed to restrain its decline of per capita water to under 1% (compound decline rates, again) from the beginning of the century. And it achieved this at much higher rates of per capita GDP growth than what India has even today.

What explains this mismatch between economic growth and water utilisation between the two countries? The answer is a bit counter-intuitive. Normally, it is water crisis in urban areas which grabs our attention. However, an overwhelming share of water consumption in India and other countries is in the agriculture sector. For example, 90% of India’s freshwater withdrawals in 2010, the latest year for which data is available, were for agricultural use. Even in China, where the share of agriculture in GDP is almost half of what it is in India, 64% of total water freshwater use was on account of agriculture.

As is to be expected, the pace of depletion of a country’s water resources is dependent to a large extent on the water efficiency of its agricultural production. A water-inefficient agriculture sector is the main reason for the growing crisis on the water front in India.

A simple calculation can illustrate this point. World Bank statistics allow us to calculate agricultural output per litre of freshwater withdrawal for a country. In 2010, India produced 0.5 dollars (at 2010 prices) of agricultural GDP for a litre of freshwater withdrawal for agriculture purposes.

This figure was 1.4 and 1.6 for China in 2007 and 2012. For Israel, a country which is often seen as a success story in rationalising water use, this value was 3.9 in 2004 itself. What is most disconcerting is that India has seen virtually no increase in its agricultural output per unit of water use in the last three decades.

A lot of the water inefficiency in Indian agriculture can be explained by the rapid expansion of tube well based irrigation in the last three decades. In 1960-61, tube well based irrigated area had a share of 0.5% in India’s gross irrigated area. This increased to 10% by 1969-70, and stood at around 33% in 2014-15, the latest year for which data is available.

The proliferation of tube well based irrigation has also caused more damage on at least two more fronts in addition to depletion of ground water tables. One, it has allowed farmers to cultivate crops which could have been otherwise unviable in given agro-climatic conditions. This has led to problems such as increasing soil salinity etc, which have jeopardized the long-term sustainability of farming practices itself.

Also, because farmers often use subsidized electricity to run their pumps, most state electricity distribution boards run huge losses, adding to the fiscal deficit of state governments. To be sure, tube well based irrigation was an important pillar of India’s green revolution success story in food grain production.

A two-part data series by this author published in the Mint newspaper in 2016 dealt with the issue of water inefficiency of India’s agricultural sector in detail. It used data from Water Footprint Network, a global network on water issues, to show that most Indian states used more water than global averages to grow important crops such as wheat, rice, cotton, sugarcane and maize. What was even worse was the fact that a significant part of India’s water intensive agricultural production was actually exported, amounting to a virtual export of water, as one of those articles pointed out. That article also pointed out that most of India was already facing a severe water crisis, seen from the fact that many river basins were facing a severe to significant water stress, defined as the ratio of total water use and availability, in most months of the year.

As is obvious from the discussion above, India’s water crisis is not a new phenomenon. However, things might have become worse this year. Even though the monsoon has officially arrived in large parts of the country, there is a significant rainfall deficit so far. Cumulative rainfall in 2019 in the week ending 26 June, 2019 was 36% less than the long period average (LPA). This deficit was just 9% of the LPA in the same week in 2018.