India Economy

Water the elixir of growth

Nalinakanthi V. | Updated on September 15, 2012 Published on September 08, 2012


With an erratic monsoon about to draw to a close, where does India’s water supply stand? And how will it affect the economy? An analysis of the historical trends in reservoir storage, hydro power generation and agricultural production reinforces a strong relationship between them.

Storage levels and output

With almost 65 per cent of India’s cultivable land being rain-fed, storage levels in the country’s major reservoirs decide the nation’s food security. A jump in water storage levels in reservoirs has usually led to an increase in foodgrain output and hydro-power generation. The reverse is true when storage levels dip.

For instance, in 2003, foodgrain production jumped 22 per cent and hydropower generation rose 17.5 per cent over the previous year. The year saw an increase in the storage levels to 60 per cent of the full reservoir level as compared with 50 per cent in the preceding year, as the South-West Monsoon was bountiful after a drought year.

In 2009, foodgrain production fell 7 per cent and hydro-power generation slipped 6.5 per cent on account of lower rainfall in the monsoon season and lower water storage in the reservoirs.

Erratic rainfall

However, in 2004, despite a 5 per cent rise in the reservoir storage over the previous year at 65 per cent of the full storage level, foodgrain production slipped 7 per cent. This was primarily due to erratic distribution of rainfall during June and July, which impacted kharif sowing. The current storage level in major reservoirs, as a percentage of full reservoir capacity, is 61 per cent.

Though this is lower than the last year’s level of 74 per cent, it is in line with the ten-year average.

Given the delayed pick up in monsoon this year, the reservoir storage is likely to improve over the next few weeks, if the monsoon continues into September. While the delay in rainfall may have a marginal impact on the kharif output, improvement in the water storage over the next few weeks may help rabi sowing.

Published on September 08, 2012
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