India to run out of water by 2020, the coming of India's national crisis

1. 11 October 2011
India’s Critical National Challenges
Sergei DeSilva-Ranasinghe
FDI Senior Analyst
Key Points:
India is seeking to remain a nationally stable and globally competitive power, by:
Emphasising rapid and substantial economic development.
Aggressively seeking access to new sources of energy to sustain its economic growth.
Trying to mitigate a growing food and water security crisis, worsened by climate change.
Seeking to stabilise its internal and external security situation, which is sharpened by
inter-regional, political, religious, economic and social tensions.
Summary
India has made solid progress in advancing its economic development and international
profile. Yet, it faces a number of major national challenges, such as: rapid, unregulated
urbanisation; providing for a large population; insufficient economic opportunities to satisfy
the aspirations of rural Indians; and growing concerns over food and water security. If left
unchecked, these escalating challenges have the potential to seriously impede its political
stability.
Analysis
Energy Security Dilemma
Given that India is one of the fastest growing economies in the world, the demand for
energy has also grown substantially and will continue to present a major challenge to India’s
quest to achieve energy security. This factor was confirmed by the Ministry of Power’s
Secretary, RV Shahi, who stated in 2006: “To deliver a sustained growth rate of eight percent
to nine per cent through the next 25 years till 2031-32 and to meet the life line energy needs
of all citizens, India needs, at the very least, to increase its primary energy supply by three to
four times and its electricity generation capacity by about six times. It is further estimated
that by 2032, our requirement will be of the order of 800,000 MW.” He added, “Coal
accounts for over 50 per cent of India’s commercial energy consumption and about 78 per
cent of domestic coal production is dedicated to power generation. This dominance of coal
in India’s energy mix is not likely to change till 2031-32.”

2. Since India has seven per cent of the world’s coal reserves and is the third largest coal
producer, it is hardly surprising that it will continue to lean towards coal as a relatively cheap
and accessible source of energy to sustain its economic growth. As a source of fuel, coal
currently generates nearly 80 per cent of India’s electricity. Another major source of energy,
according to the World Bank, is India’s investment in hydropower generation, which now
accounts for 26 per cent of total power generation countrywide, and is also set to expand in
capacity in the decades ahead.
Presently, in demand for oil India is ranked fourth in the world. Due to the paucity of its
domestic oil reserves, which are reportedly 0.5 per cent of global reserves, India has little
choice but to import more than 75 per cent of its oil and 16 percent of gas, much of it
originating from the Middle East. In fact, according to The Energy and Resources Institute,
based in New Delhi, by 2031 India’s rapidly escalating demand for energy will require it to
import 78 per cent of its coal, 67 per cent of its gas and 93 per cent of its oil. Hence, the
Indian government is actively encouraging its state-run energy corporations to engage in
numerous exploration projects overseas, perhaps best exemplified by ONGC Videsh Ltd,
which has 34 projects in 15 countries.
Despite these attempts to increase access to supplies, India remains an energy deficient
country. An estimated 400 million people, and 20 per cent of all villages, have no access to
electricity. Biomass energy is relied upon by two-thirds of households in India. The shortfall
in energy has also affected the commercial and industrial sector, where 60 per cent of
businesses and a sizeable number of households are often compelled to use electricity
generators.
As part of its strategy to alleviate its energy security vulnerability, India has also embarked
on the construction of strategic crude oil storage facilities. In addition, India is attempting to
augur undertake a process of conversion to being less dependent on oil, by diversifying and
increasingly resorting to liquefied natural gas and nuclear energy. In fact, India has plans to
increase its nuclear energy capacity five-fold; with new power plants to be operational by
2020 the sector is expected to generate 20,000 MW.
Economic Development, Population Growth
Over the last six years, India’s economy has grown annually at an average rate of eight
percent. In March 2011, the Reserve Bank of India claimed that foreign exchange reserves
stood at US$303.51 billion. The benefits of rapid economic growth raised the income and
standard of living of an estimated 350 million people or 30 per cent of the country’s
population, many of whom live in large cities where economic activity accounts for two-
thirds of India’s Gross Domestic Product (GDP).1
India’s growth, however, has had the effect of raising food prices, which has put pressure on
salaries that are increasingly inadequate to keep abreast of the rising cost of living. The
World Bank estimates that 41.6 per cent of India’s population lives below US$1.25 per day
and 75.6 per cent earn below US$2 per day. “Inflation poses a serious threat to the growth
momentum. Whatever be the cause, the fact remains that inflation is something which
needs to be tackled with great urgency," stated India’s Prime Minister Dr. Manmohan Singh.
In January 2011, The Economist reported that India’s current-account deficit had widened to
4.3 per cent of GDP; while in February 2011, BBC News Business also reported that India’s
1According to a February 2010 report compiled by Deutsche Bank Research, entitled: “The middle class in India”; citing
different sources, the report claimed that the Indian government had no official definition of its middle class and that the
middle class itself could vary in number significantly from 30 to 300 million people.
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3. inflation rate had reached 8.4 per cent and food price inflation had risen to 17 per cent.
Furthermore, as affirmed by the Asian Correspondent, India’s GDP stands at $2.55 trillion
and its national debt is 78% of GDP.
As the second most populous country on earth, comprising 1.2 billion people, India
constitutes nearly 17 per cent of the world’s entire population. Given current trends, the
United Nations Population Division forecasts that India will bypass China’s population shortly
after 2020. The US Population Reference Bureau claims that India’s population will reach 1.4
billion by 2025 and 1.7 billion by 2050.
Although the increase in India’s population has abated to a large extent, the base of its
population remains very large. There is also substantial variation across Indian states in the
rate of population growth, both of these facts were highlighted in India’s 2011 census.
Attempts to engage in population control have had mixed results, for a variety of reasons
ranging from differences between federal-state politics, weak governance and corruption,
and overlapping economic, ethnic, social and cultural factors.
While India’s average fertility rate has declined from an average of 6 children per woman in
the 1950s, to about 2.6 today, this decline has been registered primarily in the south of the
country. According to current population growth trends, there is an emerging discrepancy
between the northern states and southern Indian states, such as Kerala and Tamil Nadu,
which claim to have stabilised birth rates. The states of Bihar, Chattisgarh, Jharkhand, Madya
Pradesh, Orissa, Rajasthan, Uttarakhand and Uttar Pradesh, which happen to also be India’s
least developed states, reportedly accounted for 46 per cent of India’s 2011 population and
53 per cent of its population growth.
Food and Water Situation
Compounding the problem of a large and growing population is the escalating problem of
food and water security, which is among India’s most serious crises. The situation is so
serious that a recent World Bank study, entitled India’s Water Economy, Bracing for a
Turbulent Future, estimated that, based on current consumption trends, demand for water
in India will exceed all sources of supply by 2020. Although India has 15 large, 45 medium
and over 120 minor rivers, most are not perennial, which explains why around 400 million
people live in the Brahmaputra, Ganges and Indus river basins, which are fed by the glaciers
in the Himalayas.
Similarly, as a result of poor infrastructure, growing scarcity in surface water and increased
variability in weather patterns due to climate change, most people have little choice but to
rely on groundwater, which provides up to 80 per cent of domestic water supplies and 70
per cent of India’s irrigation requirements. In fact, today India reportedly has an estimated
20 million tube wells. Nonetheless, the sustainability of India’s aquifers is proving to be a
critical long-term problem as a result of excessive extraction of finite groundwater
resources. According to the Water Centre at Columbia University, the ground water tables in
the Punjab, a state considered to be India’s bread basket, have been declining at almost 1
metre per year, compelling farmers to extract water from depths up to 20-50 metres below
the surface. Similarly, in the state of Gujurat, aquifer levels are reportedly declining at a rate
of 3-5 metres per year. According to reports, the depletion of aquifer levels appears to be a
growing nationwide problem that will have widespread implications for India.
Aside from poor or inadequate infrastructure, another significant factor contributing to the
declining availability of drinking water is contamination of rivers and subterranean aquifers
from industrial effluent, fertilisers, pesticides and untreated sewage (the World Bank claims
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4. that only 35 per cent of India’s population have access to toilets). Under such circumstances
it is hardly surprising that around 30 per cent of India’s population, primarily in rural areas,
do not have proper access to clean drinking water. In fact, only seven out of India’s 35 states
have sufficient availability of drinking water. A large part of the reason for this is the
agricultural sector, which consumes nearly 90 per cent of India’s water resources, but
accounts for only 21 per cent of India’s GDP.
Living with water scarcity has become a way of life in many parts of rural India. Ominously,
there are indications that scarcity could lead to serious political and social problems, as
exemplified in May 2010 in the state of Madya Pradesh, where tensions over water-related
issues sparked riots and left five people dead. Similarly, the incidence of suicide has shown
signs of increasing among farmers, who have been seriously affected by prolonged drought
and are therefore often unable to repay their debts. In April 2009, The Independent reported
that in Chattisgarh over 1,500 farmers committed suicide because of a combination of
drought and debt.
Trends also suggest that growing water scarcity across India is forcing increasingly larger
numbers of people to head to the cities in search of employment and new opportunities,
due to the difficulty in maintaining farming as a livelihood. Although close to 70 per cent of
India’s population is rurally based, the rate of urbanisation has increased markedly, due to
increasing economic and environmental difficulties faced by rural communities. The urban
population across India has doubled over the past 30 years, now representing nearly 30 per
cent of India’s total population. It is forecast, according to some estimates, to reach 50 per
cent of the total population by 2025. Currently, India has three of the world’s 21 mega cities,
Mumbai (19 million), Delhi (22 million) and Kolkata (14 million). The growth of slums has also
been widespread. For example, 35 million people presently live in slums, which account for a
quarter of all urban housing.
Internal and External Security
Although senior Indian officials accuse Bangladesh, Myanmar and Pakistan of either
harbouring, or not doing enough to intercept, cross-border terrorism, there is growing
consensus among officials of the Indian security forces that internal security is taking greater
importance in national security calculations. For example, a January 2011 report tabled by
the Institute for Defence Studies and Analyses, entitled: Internal Security and Centre-State
Relations, affirmed that: “Internal threats to national security have assumed centre-stage in
the debates on Indian security. They are arguably more serious than the external threats.”
The issue has also resonated strongly with India’s Prime Minister, Dr. Manmohan Singh, who
said in February 2010: “Internal security is a critical issue which affects the pace of growth of
development.”
India faces complex and varied internal security threats different to those of any other
country, partly due to its sheer ethnic and religious diversity and its accompanying political
dynamics. There are reportedly over 100 extremist, terrorist and insurgent groups engaging
in subversive activities in India. The fractious province of Jammu and Kashmir has been the
scene of major violence for decades, which has forced India to deploy tens of thousands of
security forces personnel. Indian authorities in 2008 officially declared that, since its
inception, the ongoing insurgency had claimed over 47,000 lives, including 7,000 Indian
police and 20,000 insurgents.
India’s national security apparatus has been overhauled over the last decade by the Kargil
War and the Mumbai 26/11 terrorist attacks. Nevertheless, its restive eastern hinterland,
often referred to as the ‘Red Corridor’, has been seriously affected by militant activity by so
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5. called ‘Naxalites’, ‘Maoists’ or ‘Left-wing extremists’, a loose definition frequently used by
Indian government officials. According to India’s Ministry of Home Affairs, by mid-2009
insurgent activity severely affected 182 districts and 10 states, equating to some 92,000
square kilometers. However, the situation appears to be showing signs of escalation in a
conflict that has already accounted for over 6,000 lives over the last two decades, with 1,180
reported deaths in 2010 alone. Latterly, in 2011, the New Delhi-based Institute of Conflict
Management made the following assessment: “310 of the country’s 636 Districts are
currently afflicted by varying intensities of chronic activity, including subversion, by
insurgent and terrorist groupings. 223 Districts across 20 States register Maoist activity;
another 20 Districts in Jammu and Kashmir are affected by Pakistan-backed Islamist
separatist terrorism; and 67 Districts in six States in the Northeast are affected by numerous
ethnicity-based terrorist and insurgent movements.”
Although there are evident social and economic undertones to the so called Naxalite
movement, it could hardly be referred to as a homogenous entity. The movement is more
akin to a disparate set of sub-groups, organised more along the lines of region, ethnicity,
religion, language, caste and class. Although the Indian central government has attempted
to address the underlying issues, especially the skewed focus of economic development
between western and eastern India, these measures have not shown the desired results.
As it is each state’s responsibility to maintain security, for political reasons the Indian central
government deploys military forces for internal security operations when it is requested by
the state in question. On only three occasions has the Indian central government unilaterally
deployed forces on internal security operations, without the consent of state governments.
Due to the nature of forming a central government and the complications of coalition
politics, effective action has been hindered by a lack of political will. In addition, most
political parties in India are heavily reliant on rural votes to win elections, making the
problem more difficult to resolve.
While there is no doubt that India is experiencing rapid economic growth, it also faces
formidable and escalating challenges. The serious challenge posed by food and water
insecurity has the potential to erode political stability, particularly along ethnic, religious,
caste and class lines. This is particularly the case between Hindus and Muslims. There is also
the potential for a surge in either Maoist or secessionist violence in regions where economic
development has had a limited impact. Whether India can tackle these monumental
challenges by itself is debatable, but it is likely to require significantly greater international
cooperation and assistance, financial, technical and otherwise, to successfully confront and
diffuse what may otherwise become seriously destabilising forces.
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