challenges.
14 Water shortage will drive up the cost of water and lead to a disproportionate impact on the Small-to-Medium Enterprise (SME) and Micro, Small and
Medium Enterprise (MSME) segment. The industrial developments especially at the
small and medium level interspersed with the dwelling units also provide a challenge
to the management of water quality as the industrial wastewater mixes with the urban
sewage making the resulting mix difficult to treat at reasonable costs.
Worst affected industries are likely to include water-intensive ones such as food
and beverages, textiles and paper and paper products. Amongst these, the textiles
industry alone contributes 4% toward India’s GDP, 14% to national industrial
production, and accounts for 17% of the country’s foreign exchange earnings.
15
Water shortages have already impacted the production processes in several industries in the recent years. These impacts have ranged from industries operating at
reduced capacity, to temporary shutdown of operations, and even curtailment of
expansion projects. In 2016, a steel plant in Vishakhapatnam, Andhra Pradesh was
forced to operate on reduced capacity due to lower water availability.
Box 2: Implications of Water Usage in Industry
16
Industrial water quotas, tradable permits and water availability linked licenses
can help in optimizing water usage in scarce regions and minimize the water
supply deficit. Industrial water use can be optimized by giving permits that put
caps on water consumption by each user, while industrial zoning can restrict
water-intensive industries from setting up in water-scarce regions. This will
help promote water efficiency amongst both small and large industries.
Additionally, a tradable water permit system can be developed, where water
entitlements and allocations are provided to industrial units annually, and they
can freely trade their water quotas to maximize outputs and income by optimizing water use. The water market system in Australia’s Murray–Darling
Basin is one successful example, which supports water trading worth AUD 2
billion annually. It allows buying and selling of water entitlements and allocations amongst different users based on their own preferences and creates
incentives for water to be moved to higher-value uses.
17
14
“Investments worth $291 bn needed to plug water demand–supply gap in India: Study”,
ASSOCHAM India, accessed May 16, 2019, https://assocham.org/newsdetail.php?id=6357.
15
WWF-India and Accenture Services, Water Stewardship for Industries: The Need for a Paradigm
Shift in India (WWF-India, 2013), p. 18, https://www.indiaenvironmentportal.org.in/files/file/
water%20stewardship%20for%20industries_0.pdf.
16
Composite Water Management Index, NITI Aayog, August 2019.
17
“Water Markets and Trade”, Murray-Darling Basin Authority, accessed May 5, 2019, https://
www.mdba.gov.au/managing-water/watermarkets-and-trade.
Sustainable Urban Water Management Strategies
29
14 Water shortage will drive up the cost of water and lead to a disproportionate impact on the Small-to-Medium Enterprise (SME) and Micro, Small and
Medium Enterprise (MSME) segment. The industrial developments especially at the
small and medium level interspersed with the dwelling units also provide a challenge
to the management of water quality as the industrial wastewater mixes with the urban
sewage making the resulting mix difficult to treat at reasonable costs.
Worst affected industries are likely to include water-intensive ones such as food
and beverages, textiles and paper and paper products. Amongst these, the textiles
industry alone contributes 4% toward India’s GDP, 14% to national industrial
production, and accounts for 17% of the country’s foreign exchange earnings.
15
Water shortages have already impacted the production processes in several industries in the recent years. These impacts have ranged from industries operating at
reduced capacity, to temporary shutdown of operations, and even curtailment of
expansion projects. In 2016, a steel plant in Vishakhapatnam, Andhra Pradesh was
forced to operate on reduced capacity due to lower water availability.
Box 2: Implications of Water Usage in Industry
16
Industrial water quotas, tradable permits and water availability linked licenses
can help in optimizing water usage in scarce regions and minimize the water
supply deficit. Industrial water use can be optimized by giving permits that put
caps on water consumption by each user, while industrial zoning can restrict
water-intensive industries from setting up in water-scarce regions. This will
help promote water efficiency amongst both small and large industries.
Additionally, a tradable water permit system can be developed, where water
entitlements and allocations are provided to industrial units annually, and they
can freely trade their water quotas to maximize outputs and income by optimizing water use. The water market system in Australia’s Murray–Darling
Basin is one successful example, which supports water trading worth AUD 2
billion annually. It allows buying and selling of water entitlements and allocations amongst different users based on their own preferences and creates
incentives for water to be moved to higher-value uses.
17
14
“Investments worth $291 bn needed to plug water demand–supply gap in India: Study”,
ASSOCHAM India, accessed May 16, 2019, https://assocham.org/newsdetail.php?id=6357.
15
WWF-India and Accenture Services, Water Stewardship for Industries: The Need for a Paradigm
Shift in India (WWF-India, 2013), p. 18, https://www.indiaenvironmentportal.org.in/files/file/
water%20stewardship%20for%20industries_0.pdf.
16
Composite Water Management Index, NITI Aayog, August 2019.
17
“Water Markets and Trade”, Murray-Darling Basin Authority, accessed May 5, 2019, https://
www.mdba.gov.au/managing-water/watermarkets-and-trade.
Sustainable Urban Water Management Strategies
29