Rating Agency Moody’s Warns Water Shortage May Hit India’s Economic Growth

Growing water stress can negatively affect India's sovereign credit strength as it can impact agricultural production and industrial operations, Moody's Ratings said. "Decreases in water supply can disrupt agricultural production and industrial operations, resulting in inflation in food prices and declines in income for affected businesses and communities, while sparking social unrest," the global rating agency said in a report. "This in turn can exacerbate volatility in India's growth and undermine the economy's ability to withstand shocks." Moody's said India is facing a growing water shortage as water consumption increases amid rapid economic growth and increasingly frequent natural disasters due to climate change. Moody's also highlighted that India is a big consumer of water as its economy is vast and still growing fast, with its large population continuing to expand. The agency said it expects India's economy to grow 6.5% in 2024, faster than all other G20 economies.