STRONGER INDIA
Infrastructure

India Is Running Out of Water and It Is Costing the Economy Trillions

The World Bank says water scarcity will cut India's GDP by 6%. Israel fixed a worse crisis. India can too.

By Alex Berman
Editorial illustration for India Is Running Out of Water and It Is Costing the Economy Trillions
TLDR - What to Fix
  1. Pay farmers the same guaranteed price for low-water crops like millets so they stop planting water-guzzling rice in dry regions.
  2. Put a meter on every agricultural water pump in water-stressed states so farmers know what they use and have a reason to stop.
  3. Copy Singapore and put one agency in charge of the full water cycle so no one can blame someone else when the taps run dry.

The Problem You Can See

In Chennai - a coastal city of 10 million people in southern India - residents once fought over water tankers during a severe drought. One woman was stabbed by her neighbor as she tried to dig a private borewell.

In Latur, a city in Maharashtra state, hospitals stopped performing surgery during a water crisis. They feared infections because there was not enough clean water to sterilize equipment.

Editorial illustration of a vast cracked dry riverbed with a tiny trickle of water surrounded by dense crowds of people, representing the severe gap between India's freshwater supply and its enormous population

The Scale of the Problem

India holds 4% of the world's freshwater but supports 18% of the world's population. That gap explains why 600 million Indians face high to extreme water stress, according to the government's own planning body, NITI Aayog.

The World Bank warns that water scarcity could reduce India's GDP by 6% by 2050. That is roughly $200 billion wiped from the economy every year. Water pollution alone already costs India about 3% of GDP annually.

India is ranked 120 out of 122 countries in the global water quality index. Nearly 70% of India's surface water is contaminated. Around 200,000 Indians die every year from diseases linked to unsafe water. Waterborne diseases cost the economy an estimated 73 million lost working days and $600 million in productivity every year.

The Water Resources Group projects that India will have only half the water it needs if current patterns continue.

Editorial illustration showing a farmer pumping groundwater for flooded rice paddies above ground while a cross-section below reveals rapidly depleting underground aquifers, depicting the cause of India's groundwater crisis

Why This Is Happening

India captures only 8% of its annual rainfall due to poor harvesting infrastructure. The rest runs off into the sea or evaporates. Meanwhile, underground water is being pumped out far faster than rain can replenish it.

India is the world's largest user of groundwater. Over the past 50 years, groundwater consumption has increased by 500%, according to a study published in Nature Communications. Since the 1980s, groundwater levels have dropped by more than 8 meters on average. In Punjab - the country's most important farming region - levels have fallen 30 meters.

India's government guarantees farmers a fixed purchase price for rice and wheat. Both are among the most water-intensive crops on earth. This means farmers grow rice and wheat even in dry regions where neither crop belongs. The Nature Communications study found that these subsidies may have led to 30% over-production of water-intensive crops. In Punjab, rice procurement alone may account for at least 50% of the groundwater table decline over 34 years.

Free or heavily subsidized electricity for groundwater pumping removes any reason for farmers to conserve.

One Punjab farmer quoted by FairPlanet said that wells used to irrigate an entire farm in 10 days. Now the same well takes a month.

About 40 million liters of wastewater enter India's rivers every day with almost none of it properly treated. The Central Pollution Control Board reports that more than 350 river stretches across India are already polluted beyond usable levels.

What Has Already Been Tried

India has launched multiple water programs. Each one moved the needle partially but stopped short of fixing the core problem.

The National Rural Drinking Water Programme focused on public taps at the village level rather than pipes to individual homes. By the time it was replaced, only 16% of rural households had a tap connection at home.

In 2019, Prime Minister Narendra Modi launched the Jal Jeevan Mission with a budget of roughly $43 billion. Its goal was to pipe safe water directly into every rural home. Over 157 million rural households now have tap connections, up from just 32 million in 2019. The WHO estimates this saves Indian women 5.5 crore hours of water-carrying work every day.

But connections were counted as installed even when water did not flow regularly. States like Kerala had only 54% functional household tap connection coverage despite being counted in the national totals. The mission built the pipe but in many places did not build the water source behind it.

The Atal Bhujal Yojana groundwater management scheme was supposed to address underground water depletion in seven water-stressed states. But Punjab, which has a groundwater extraction rate of 166% above sustainable levels, was excluded entirely. Only 20% of allocated funds had been released and less than 15% of released funds had been spent.

The Namami Gange programme was audited by India's Comptroller and Auditor General and found to have significant gaps in execution.

India funds water schemes. It builds connections. It rarely fixes the underlying incentive that rewards pumping more water than the earth can replace.

Editorial illustration with a split scene showing efficient drip irrigation feeding crops on one side and a wastewater recycling facility on the other, representing the water management solutions adopted by Israel and Singapore

How Other Countries Fixed This

Israel - Drier Than India, Now Water Secure

Israel receives one-quarter of the rainfall that India does. It is more than half desert. And yet it has achieved water security and now exports water to neighboring countries.

Israel did three things. First, it deployed drip irrigation across 75% of its farmland, using 70 to 80% of the water applied. India uses flood irrigation across most of its fields, which achieves only around 40% efficiency.

Second, Israel recycled its wastewater. By 2015, Israel was treating and recycling 86% of all its sewage water. Recycled water now provides roughly 50% of Israel's irrigation supply.

Third, Israel separated water policy from political interference. A single national regulator controls tariffs and water allocation across all users and sets prices based on actual cost recovery. Depleted aquifers are now recharging.

Singapore - One Agency, No Excuses

Singapore has almost no natural freshwater and once imported 50% of its water from Malaysia. Today it no longer depends on any single source.

Singapore's national water agency, PUB, runs the entire water cycle under one roof. In 2001, PUB absorbed the used water and drainage functions that had been split across a separate ministry, ending the bureaucratic separation between clean water supply and wastewater management.

PUB developed NEWater - treated wastewater purified to a quality that exceeds WHO drinking water standards. By 2017, NEWater met 40% of Singapore's total water demand. PUB plans to raise that to 55% by 2060.

One agency with one mandate and full accountability. When the water fails, PUB is responsible. There is no finger-pointing between ministries.

Who Is Accountable

The Ministry of Jal Shakti controls the two budget lines that matter most. The Department of Drinking Water and Sanitation received Rs 77,391 crore in a recent Union Budget. The Atal Bhujal Yojana had Rs 1,000 crore allocated in one recent budget year but spent less than 15% of released funds. The Central Ground Water Board has documented that 17% of India's groundwater blocks are already over-exploited. It has the data. Nobody is getting fired for the pumping that continues anyway.

What Would It Cost

The Jal Jeevan Mission already has a Rs 3.60 lakh crore budget committed. That covers pipes. The missing investment is in what fills those pipes.

Nature Communications researchers calculated that restructuring where India sources grain for its public food distribution system could reduce groundwater depletion without any new spending while increasing average farm income by 30%. The cost of fixing this is less than the cost of not fixing it.

What Needs to Happen

First, India needs to extend the minimum support price to millets, pulses, and other low-water crops. Shifting these incentives could reduce groundwater stress in northern India by 25%. It requires adding the same support to crops that use less water.

Second, every agricultural pump in water-stressed states needs a meter. West Bengal metered all its tubewells by 2007 without significant farmer resistance. Metering stops the race to the bottom where the farmer who pumps fastest wins today and everyone loses in ten years.

Third, India needs to treat and reuse its wastewater at scale. That 40 million liters of untreated sewage entering rivers daily is not waste. It is a resource. The Central Pollution Control Board has the regulatory authority to mandate treatment standards. It needs enforcement funding and political backing to match.

Fourth, the Ministry of Jal Shakti needs a single operational mandate modeled on Singapore's PUB. No single body is currently responsible for the full water cycle. That is why programs are built without water sources and aquifers drain without enforcement. One agency. One scorecard. One person accountable.

Frequently Asked Questions

How many people in India face water stress?

About 600 million Indians face high to extreme water stress, according to NITI Aayog's Composite Water Management Index. That is nearly half the country's population.

How much could water scarcity cost India's economy?

The World Bank projects water scarcity could cut India's GDP by 6% by 2050. Water pollution alone already costs roughly 3% of GDP every year. Together these represent one of the largest single threats to India's economic growth.

What is the Jal Jeevan Mission and has it worked?

The Jal Jeevan Mission is India's program to connect every rural household to a piped water tap. Launched in 2019 with a budget of Rs 3.60 lakh crore, it connected over 157 million rural homes, up from just 32 million at the start. That is a genuine achievement. The gap is in functionality - many connections do not deliver water reliably - and in the water source itself. Pipes without water do not solve the crisis.

Why is India's groundwater running out so fast?

India's government guarantees farmers a fixed purchase price for rice and wheat. Both crops need enormous amounts of water. Farmers grow them even in dry areas because the subsidy removes the financial risk. A Nature Communications study found this policy may have caused 30% over-production of water-intensive crops. In Punjab, rice farming alone may account for at least 50% of the groundwater decline over the past 34 years. Free electricity for water pumps removes any reason to stop pumping.

How did Israel solve its water crisis?

Israel - a country more than half desert - recycled 86% of its wastewater for farm irrigation, freeing fresh water for drinking. It also deployed drip irrigation on 75% of its farmland. Drip irrigation delivers water directly to crop roots at 70-80% efficiency, compared to 40% for flood irrigation. A single national regulator sets water prices based on real costs rather than politics. Israel now has a water surplus.

What is NEWater and could India use a similar system?

NEWater is Singapore's treated wastewater, purified to a quality that exceeds WHO drinking water standards. It now meets 40% of Singapore's total water demand. India produces vast volumes of used water daily and nearly all of it goes untreated into rivers. Building treatment and reuse capacity is technically feasible. The Central Pollution Control Board already has the regulatory authority. It needs enforcement funding and political backing.

Which Indian states have the worst groundwater crisis?

Punjab in northwest India is the most critical case. The Central Ground Water Board warns that at current rates, Punjab's groundwater could drop below 300 meters by . A UN report found that 78% of wells in Punjab are already over-exploited. Haryana, Uttar Pradesh, Rajasthan, and parts of Madhya Pradesh also face severe depletion. These states together produce much of India's food supply, which makes the stakes national, not just regional.

About the Author
Alex Berman

Serial entrepreneur, husband of Kritika Berman from Chamba, Himachal Pradesh. 100K+ YouTube subscribers. Author of "The Cold Email Manifesto." Created Stronger India to compile research-backed solutions for the problems he and his family see firsthand.

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