Maharashtra’s water crisis puts India’s economic powerhouse under pressure

Water Resources Minister Girish Mahajan said the department has prepared a reservoir-wise and use-wise water management plan through August 31, 2027, with drinking water receiving the highest priority, the Indian Express reported.

The plan factors in evaporation, siltation and unauthorised water extraction when assessing available supplies. Authorities will also maintain a 10% emergency buffer in reservoirs to deal with uncertain rainfall and deteriorating water conditions.
In extreme circumstances, water from the dead storage of a reservoir could be used after a technical assessment.

Industry, agriculture face tighter water rules

The restrictions extend beyond households. Maharashtra has ordered factories to reuse or recycle at least 30% of the water they consume, while local authorities have been instructed to identify and plug leakages.

Sewage treatment plants are also required to operate at full capacity, with treated wastewater to be used instead of fresh water for gardening, construction and washing.

For agriculture, drinking water, livestock and fodder needs will take priority over irrigation. The Indian Express reported that authorities will prioritise rabi foodgrain and fodder crops, followed by other rabi crops. Water for perennial crops will be supplied only if resources remain.

The government is also encouraging water-saving irrigation methods.

Weak monsoon adds to economic risks

The measures follow one of India’s weakest monsoons in years. Bloomberg News reported that rainfall during the June-September monsoon was 12.6% below the long-term average, the largest shortfall since 2015.

Maharashtra has declared drought conditions in about three-quarters of its 358 sub-districts, while the state has announced more than ₹6,700 crore in relief measures, including farm-loan restructuring and emergency rural employment funding.

Bloomberg News said poor rainfall has depleted reservoirs, threatening crops including rice, sugar cane and soybeans as well as hydropower generation. Food inflation has already accelerated for seven consecutive months, increasing the risk that supply shortages could feed into broader inflation.

Illegal extraction under scanner

The state will form joint squads to patrol dams, rivers and canals and take action against unauthorised water extraction, the report said.

Maharashtra’s water stress also carries wider economic implications because the state is home to Mumbai, major banks and companies including Reliance Industries, Tata Group and Mahindra & Mahindra, Bloomberg News reported.

With water restrictions now extending from households to factories and farms, Maharashtra’s drought is increasingly becoming an economic and business risk, rather than only an environmental crisis.