New Delhi: Moody’s Investors Service warned on Tuesday that India’s heat wave and water shortage, pointing towards a broader raft of weather fluctuations, may affect its sovereign rating. The rating agency shared alarming insights on India’s water crisis, illustrated the reasons behind it and also highlighted the effects of this problem.
Water scarcity may drive up food inflation
According to the credit rating agency, India’s long impending water crisis can fuel food inflation and reduce the income levels of people, sparking social unrest in the country. Moody’s also added that India’s water crisis can disrupt farm and industry sectors and is also detrimental to the country’s credit health. India’s agricultural production and industrial operations may also be hit by the water crisis, according to the rating agency. Coal power generators and steel-makers, sectors that are water-intensive, are likely to face a threat from this crisis, according to the rating agency.
Why is India facing water scarcity?
Moody’s has attributed India’s water crisis to the following factors:
Industrialisation: Water consumption rises whenever a country undergoes rapid economic growth. According to the agency, India’s fast economic growth, accompanied by rapid industrialisation will reduce water availability since industrial operations consume vast quantities of water.
Climate Change: India’s water crisis has also worsened because of the looming malice of climate change in the country which has caused increasingly intense and frequent extreme climate events such as droughts, heat waves, and floods, which in turn add to the water crisis, according to Moody’s.
Urbanisation: Moody’s also attributed India’s water crisis to urbanisation. India’s fast economic growth, accompanied by urbanisation will reduce water availability in the world’s most populous country, it said. India’s urban residents accounted for only 36 per cent of the country’s total population in 2022. This is likely to grow since there is room for rapid urbanisation in India which is likely to increase the dependence of these people on water in Urban India, worsening India’s water crisis.
India’s water crisis: Moddy’s Investors Service has pointed out that India’s water crisis and heatwave conditions are likely to worsen with rapid industrialisation and urbanisation, which is likely to affect its sovereign rating. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
