Government of India has targeted a GDP growth rate of 8 to 10% per annum for the Indian economy over the next decade. This growth rate can be achieved only through significant contribution of the service, manufacturing and the agriculture sectors – water is an essential ingredient for all sectors

India can still store only relatively small quantities of its fickle rainfall. Whereas arid rich countries (such as the United States and Australia) have built over 5,000 cubic meters of water storage per capita, and China can store about 1,000 cubic meters per capita, India’s dams can store only 200 cubic meters per person. Moreover, India can store only about 30 days of rainfall, compared to 900 days in major river basins in arid areas of developed countries.

Today India has a capacity to store about 200 billion cubic meters of water, a gross irrigated area of about 90 million hectares, and an installed hydropower capacity of about 30,000 megawatts. These investments in water infrastructure transformed the economic and social development of India. Most obviously and directly, assured supplies of water meant that crop yields on irrigated land were consistently much higher than yields from rainfed agriculture, allowing India to achieve national food security and associated affordability of food.   Hydropower from many of the large dams also provided the underpinnings for Indian industrial growth and groundwater irrigation.

These direct benefits -- irrigation and hydropower -- are only part of the story of the impact of major infrastructure. They, in turn, generate impacts on other industries – through backward linkages with input industries like fertilizer and tractors and through forward linkages with the food processing industry -- as well as fuel the income-linked consumption of general goods and services.

Natural resource distribution in India also means that several states have poor water availability (E.g. Rajasthan, Tamil Nadu), while in others there is a lot of waste of water due to poor long-term management. This would necessitate emphasis on water management, long term planning and water reuse

Investments in the urban water and sewage sector currently lag behind the minimal requirements. Many industries are adopting water-recycling systems due to environmental regulations and scarcity of water. Leveraging of scarce Government finances, efficient management of water resources, reduction in water losses, water recycling and desalination are the areas that would require maximum attention in the water sector