Material Insights · Understanding the Material World

Water and Water and sanitation

Raw water is the resource that water and sanitation utilities abstract, treat, deliver and then collect back as sewage. In India the system is being expanded fast through the Jal Jeevan Mission, but it rests on groundwater that is over-drawn in many areas and on tariffs that rarely cover costs.

Water (commodity) and Water and sanitation (industry): 4 relationships.

How they are linked

1. Raw water intake

Physical flow · Strong · Water to water and sanitation

Utilities sell a treated version of the raw resource, so the quantity and quality of rivers, reservoirs and aquifers they draw on set what they can supply; the site rates water 5 of 5 on criticality for bulk water authorities and utilities.

  • 5 of 5 criticality for bulk raw-water authorities and water utilities; 4 of 5 for sewage plant operators
  • about 85% groundwater's contribution to India's rural water supply
  • about 50% groundwater's contribution to India's urban water supply

Sewage treatment operators depend on the same flow at the other end, as wastewater. Because groundwater carries most rural and half of urban supply in India, aquifer levels and quality are a direct service risk for utilities and village schemes.

Enterprise types that depend on it:

  • Bulk raw-water and reservoir authorities: the raw resource itself (criticality 5 of 5)
  • Water utilities (municipal boards and private operators): raw water intake (criticality 5 of 5)
  • Sewerage and sewage-treatment plant operators: the wastewater stream (criticality 4 of 5)

Sources: Material Insights; Bhabha Atomic Research Centre

2. Groundwater depletion

Shared risk · High in India · Over-drawn aquifers threaten piped supply

Where extraction exceeds recharge, aquifers fall year after year, so new tap connections that draw on them are at risk if the source is not secured.

  • 60.47% India's overall stage of groundwater extraction, 2024
  • 751 of 6,746 assessment units classed as over-exploited, 2024

Nationally India extracts about 60% of its annually extractable groundwater, but the stress is concentrated: about 11% of assessment units already take more than they recharge. Schemes in these units need other sources, such as surface water transfers, or recharge works.

Sources: Bhabha Atomic Research Centre

3. Jal Jeevan Mission

Policy · High in India · Government programme expands piped rural supply

The Jal Jeevan Mission funds a tap connection for every rural household, which raises the volume of water utilities and village schemes must source, treat and deliver.

  • 3.23 to 15.75 crore rural households with tap water, August 2019 to 3 December 2025
  • 16.7% to 81.37% share of rural households with tap water over the same period
  • ₹3.60 lakh crore total outlay, of which ₹2.08 lakh crore central share

The mission has been extended to December 2028 with an enhanced outlay; about 3.6 crore of 19.36 crore rural households were still without a tap in December 2025, and the centre funds 90% of the cost in Himalayan and north-eastern states. Coverage is uneven: Kerala, Jharkhand, West Bengal and Rajasthan were each at about 55 to 58%.

Sources: DT Next (IANS); All India Radio News

4. Tariffs and losses

Cost and price · Strong · Regulated tariffs, not scarcity, set the price utilities get for water

Water is sold at tariffs set by city and state governments, often below cost, and much of what is treated is lost or unbilled, so utilities rely on subsidies to buy, treat and pump raw water.

  • 35 to 70% non-revenue water in Indian cities, against a global average of about 30%
  • ₹1.1 billion vs ₹470 million Nashik's annual water supply spending against revenue realised, reported 2026
  • about 23% to 16% Coimbatore's water losses after a loss-reduction programme, reported 2026

High losses mean a city must abstract far more raw water than it bills. Coimbatore cut losses from about 23% to 16% and raised water revenue from ₹320 million to ₹440 million, which shows that reducing non-revenue water eases both raw water demand and finances.

Sources: Indian Infrastructure

For investors

Key learnings

  1. Water utilities in India are policy-funded rather than tariff-funded, so investable cash flows sit mainly in government-backed EPC and operation contracts, not in selling water.
  2. Non-revenue water of 35 to 70% is the largest efficiency lever: cutting it lowers raw water needs and lifts revenue at the same time.
  3. Source risk from groundwater depletion can strand new schemes, so projects with secured surface sources or recharge carry lower operating risk.

What to track

  • Jal Jeevan Mission connections and functionality: Slowing connections or failing taps signal funding or source problems (Daily · JJM dashboard, Ministry of Jal Shakti)
  • City water tariff revisions: Increases improve utility finances and contract payment security (As announced · municipal corporations)
  • AMRUT water project awards: Pipeline of urban supply and loss-reduction contracts (Monthly · Ministry of Housing and Urban Affairs)

For policymakers

Key learnings

  1. Tap connections are only as reliable as their source; with 751 over-exploited groundwater units, source security has to accompany coverage targets.
  2. Tariffs below cost leave operation and maintenance underfunded, which threatens the assets the Jal Jeevan Mission has built.
  3. Cutting non-revenue water is cheaper than finding new water, as Coimbatore's results suggest.

What to track

  • Stage of groundwater extraction by block: Rising stress flags schemes at risk of source failure (Annual · CGWB Dynamic Ground Water Resource Assessment)
  • Non-revenue water by city: Shows progress on losses and billing (Annual · AMRUT and municipal reports)

India

India raised rural tap coverage from 16.7% of households in 2019 to about 81% in December 2025 under the Jal Jeevan Mission, but groundwater supplies about 85% of rural water and is over-exploited in about 11% of assessment units (2024).

Sources

  1. Water and sanitation: materials, Material Insights (2026)
  2. More than 15.75 crore or 81.37 pc rural households have tap water supply: Union Government (Rajya Sabha reply), DT Next (IANS) (2025)
  3. BARC Newsletter 2025: groundwater article, Bhabha Atomic Research Centre (2025)
  4. Over 15 crore households provided tap water connection under Jal Jeevan Mission, All India Radio News (2025)
  5. Closing the gap: reducing non-revenue water critical to improving ULB finances, Indian Infrastructure (2026)