Economics of Water:Understanding India’s Water Balance in a Globalized Economy

By : Krishna Raj

Page No: 343-354

Abstract
This article deals with economic conception of water as economic good as well as natural capital for equitable and efficient management of water under the globalized economy. Understanding of water as an economic good ensures devising various new market instruments which help allocation of water efficiently and equitably among competing sectors of the economy. The recent international attempts to include Natural Capital in the Integrated Economic and Environmental Accounting or Green GDP consider the role of total economic value of water to economic growth. The growing scarcity of water, already reflected in market prices, limits future economic growth of India, unless the government takes policy measure of supply-side (water enhancement) management through catchment area conservation and demand-side (efficient) management by reducing the demand for water in the cities. The study of New York and Bangalore in the context of climate change led water scarcity helps in understanding the status of urban water management by the respective water utilities. Water scarcity, water use inefficiency and inequity in water distribution have already resulted in prevalence of water poverty all over India. In this context, this paper favours that the production and consumption behaviours of industry and consumers should be on the path of sustainable development practices.

Authors :
Krishna Raj : Associate Professor and Head, Centre for Economic Studies and Policy, Institute for Social and Economic Change, Bengaluru – 560072.