This document discusses the economic value of water in India. It notes that water demand is projected to exceed supply by 2025 due to population growth. Non-revenue water losses from leaks and unauthorized usage currently account for over 1000 billion cubic meters annually. To better manage this scarce resource, the document advocates establishing water rights that allow trading of access entitlements between users. This helps transfer water to more productive sectors. It also recommends pricing policies, quantity controls, and exchangeable permits to regulate groundwater extraction and encourage conservation. The ultimate goals are to recognize water as an economic good and enhance its economic value through improved source management, supply reliability, and demand management.

1. Economic Value of Water

2. Page 2
Real or physical losses
Commercial or apparent losses
Unbilled authorized consumption
NRW
0
200
400
600
800
1000
1200
1400
1600
2010 2025 2050
BCM
Current supply Demand
Gap analysis of demand and supply
Current water scenario in India

3. Page 3
Broadened scope of NRW
• Source management
• Supply management
• Demand management
• Ground water
• Rain water
• Pollution of water
bodies
Source
management
• Non uniform
supply
• Virtual water
Supply
management
Wastage of water
and wastewater
disposed off
Demand
management
Are these also NRW ?

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Economic Value of Water
Economic value of water
Reliability of its supply
Role in production of
other goods and
services
Water has economic value in relation to its scarcity Water as a special economic good
Water
Essential
Non-
substitutable
Finite
Fugitive
Is a system
Bulky
Water is essential and finite
Water must be considered as an economic good

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Process of buying &
selling of water access
entitlements – water
rights.
Allows scarce water
resources to be transferred
to their most productive
uses.
Use
Water entitlement
Water allocation
Trade
Water
pollution
Point
source
Non-point
source
Water entitlementsSource management
Ground water extraction
Prices and
charges
Qty. based
controls
Exchangeable
permits
Ground water extraction
Policies for enhancing economic value of water

6. Page 6
Chaitanya Kalia
Partner | Climate Change & Sustainability Services
Ernst & Young Pvt. Ltd.
Contact
Tel: +91 22 61920250
Mobile no : +91 9820108838
Chaitanya.Kalia@in.ey.com
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