Water shortage detrimental to India's credit health

Moody's Ratings on Tuesday said India's growing water shortage can disrupt farm and industry sectors and is detrimental to the credit health of the sovereign as rising food inflation and decline in income may spark social unrest.

It said decreases in water supply can disrupt agricultural production and industrial operations, resulting in inflation in food prices and hence can be detrimental to credit health of sectors that heavily consume water, such as coal power generators and steel-makers.

India's fast economic growth, accompanied by rapid industrialisation and urbanisation, will reduce water availability in the world's most populous country, it said.