Building Water Accounts: Physical Supply and Use Tables for India’s Water Resources

Chetana Chaudhuri, Raktimava Bose and Sanjib Pohit
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Chetana Chaudhuri: National Council of Applied Economic Research
Raktimava Bose: National Council of Applied Economic Research

No 188, NCAER Working Papers from National Council of Applied Economic Research

Abstract: This paper presents a comprehensive analysis of India's water resources through the construction and application of Physical Supply and Use Tables (PSUT), providing a systematic framework for understanding sectoral water allocation, consumption patterns, and policy implications. Using the System of Environmental-Economic Accounting (SEEA) methodology, we examine water flows across agricultural, industrial, energy, and municipal sectors, revealing critical insights into India's water security challenges. Expectedly, our analysis shows that agriculture dominates water consumption at 859 billion cubic metres (BCM) (81% of total abstraction), with rice alone accounting for 341 BCM, followed by wheat (106 BCM) and sugarcane (70 BCM). The industrial sector consumes 20 BCM, with engineering and pulp-and-paper industries being the largest users, while the energy sector requires 12 BCM, predominantly for coalbased electricity generation. We find that surface water provides 690 BCM and groundwater contributes 239 BCM to total abstraction of 1,122 BCM. The return flows amount to 1,053 BCM, indicating substantial potential for wastewater treatment and reuse expansion. The paper demonstrates how water accounting frameworks can inform evidence-based policy formulation, particularly for demand management, pricing reforms, and intersectoral water reallocation. The research contributes to the growing literature on environmental-economic accounting by providing the first comprehensive PSUT analysis for India's water sector, offering a replicable methodology for other developing economies facing similar water stress challenges.

Keywords: Water accounting; Water Supply and Use Tables; SEEA methodology; sectoral water allocation; sustainable water management (search for similar items in EconPapers)
JEL-codes: E16 Q25 Q28 Q56 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2025-10-03
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