Background
The long-running drought in southern India appears likely to continue into the early months of 2017. All 32 districts in Tamil Nadu have been declared drought-affected with annual rainfall between 35 and 80 per cent below average in 2016.
Both the south-west monsoon, between July and September, and the north-east monsoon, between October and December, failed. Kerala, a state to the west of Tamil Nadu, has struggled through its most severe drought in 115 years.
In Karnataka, a state to the north of Tamil Nadu, the drought is now in its third year. It is rare, but not unheard of, for both monsoon systems to fail in the south of the country. In times of drought, farmers in southern India tap into reservoirs to meet the shortfall. In some areas, however, these reserves are only expected to last for another 90 days. Preference has been given to using the remaining water for drinking, household use and industry instead of the very thirsty agricultural sector.
Analysis
Competition over water resources in southern India is likely to grow in coming years. Southern states, such as Kerala and Tamil Nadu, have embarked on industrialisation projects with mixed levels of success. These states are competing with China to become major textile producers. These ambitions are built on the relatively cheap cotton that is grown in the country, but recent years of erratic rainfall and low yields could threaten these plans.
Tamil Nadu relies on rain-fed rivers from Karnataka and Kerala for its surface water supply, but this arrangement has come under increased pressure in recent times. In September 2016, there were widespread protests as tensions rose between Karnataka and Tamil Nadu over the sharing of water from the Cauvery River. There are also fears that Kerala will withhold water from the Periyar River. Tamil Nadu has requested that Andhra Pradesh release more water from the Krishna River to service the drinking water needs of Chennai, a large city on the east coast of the state. Of the four south Indian states, Tamil Nadu is at the greatest risk of water insecurity due to its heavy reliance on the goodwill of its neighbours.
Chennai has experienced extreme water insecurity in the recent past. In 2003/04, its four reservoirs went dry and, as the city turned to groundwater reserves, these also declined. The city’s piped water supply was turned off and, apart from sporadic service, did not function for the best part of a year. During this time, the 4.5 million residents of Chennai required 600 million litres of water per day. To meet demand, water was transported from aquifers 150 kilometres from the city on trains and trucks.
As the failure of two consecutive monsoon seasons was blamed for the water shortage, the city turned to climate independent water sources. Three desalination plants have been built in Tamil Nadu since 2009, with a fourth, and possibly fifth, in the pipeline. City residents are worried about construction, maintenance and operating costs while the state’s high reliance on coal-powered electricity plants have also fuelled concerns about the effect additional desalination plants could have on Tamil Nadu.
The Minjur and Nemmeli desalination plants have operated since 2010 and 2013, respectively. Together, the two plants provide Chennai with up to 200 million litres of water per day. The third plant, commissioned in 2009, was built by the Chennai Petroleum Corporation to provide water for a local oil refinery.
A new plant at Perur will have a capacity of 150 million litres per day while a fifth will be able to produce up to 400 million litres per day. If all the planned plants are built, Chennai’s desalination capacity would increase to 750 million litres per day. Unless per capita demand for water has declined since 2003/04, this will not be enough to satisfy the 8.2 million people now living in the city in times of water scarcity.
As water levels in dams diminish, the region also faces a looming electricity crisis. Water reservoirs in Tamil Nadu are reportedly 82 per cent lower than normal. Poor water management is partly responsible for the state’s dire situation. In 2015, parts of the state, mainly around Chennai, flooded. Due to poorly maintained rainwater harvesting infrastructure, much of the water, which could have been harvested and stored for later use, was lost.
Desalination plants alone will do little to strengthen Tamil Nadu’s water security. While they will improve the resilience of Chennai in times of drought, and possible serve as a model for other Indian cities to emulate, they will not resolve the problems that arise when the city floods. Neither will they be capable of producing enough water at a cheap enough price to sustain the industrialisation of the region. If the state is serious about resolving its water security challenges it will also need to focus on demand-side solutions and repair and maintain its rainwater harvesting and drainage infrastructure.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.