It is not just huge water storage infrastructure that is needed; in many parts of the country there are also substantial returns from investments in smaller-scale, community-level water storage infrastructure such as tanks, check dams and local water recharge systems. And there are massive needs for investment in water supply systems for growing cities and for underserved rural populations. India’s cities and industries also need to use water more effectively, and there will have to be massive investments in sewers and wastewater treatment plants.

The need arises also because much of India’s existing infrastructure is crumbling. The implicit philosophy has been aptly described as ‘Build-Neglect-Rebuild’ and so there is an enormous backlog of deferred maintenance. The end result is the familiar sight -- crumbling, rusting, leaking dams, canals and pipes.

However, the water sector is facing a major financing gap. The annual requirements forrehabilitating existing infrastructure alone is estimated to be around Rs 200 billion while the India Water Vision expects new investments – with very modest allowances for sewage treatment – to cost about Rs 180 billion a year. Annual allocations in the recent past have varied between Rs 90 and Rs 170 billion a year. These needs are amplified by the fact that large proportions of recurrent budgets are spent on personnel, not on real maintenance, and on electricity, irrigation and water supply subsidies. On the “supply side” there are ultimately only two sources of financing – tax revenues and user charges – and both are falling. The resulting financial gap can only be met by a combination of methods which include greater allocations of budgetary resources, more efficient use of those resources, and greater contributions from water users.

 But simply building additional infrastructure cannot ameliorate India’s looming water-stress. There is a concomitant need -- described in the recent World Bank report “India’s Water Economy:  Facing a Turbulent Future” -- to ensure that water is managed in a much more flexible, efficient and environmentally sustainable manner.