Fixing India’s oil, water woes

Despite all the strides the country has made since Independence, India has struggled to develop, manage and conserve two vital fluids — water and oil — that are essential for its economic health. Water and crude oil are the fluids that impact every citizen of this country and the sustained supply of both at an affordable cost and reliable quality is absent. Almost every year we have lurched from crisis to crisis because we have not invested enough in the development and management of water and oil.

Dependence on imported oil 

Let’s start with oil. India is suffering from inordinately high fuel prices at the moment and with consumption rising steadily, the country is likely to remain woefully dependent on the import of crude oil. In 2012, India imported just over 171 million metric tonnes of crude oil while in 2017-2018, this figure has grown to over 220 million metric tonnes. The biggest oil suppliers to India include Iraq, Iran, Saudi Arabia, UAE, Nigeria and Venezuela. Statistics also show that the cost of imports has risen over 25 per cent in the past one year to $87 billion in 2017-18 and is expected to grow by another $26 billion in the current year.

It is no secret that the dependence on oil and gas imports for energy is very high for India. Currently, about 95 per cent of LPG and 86 per cent of crude oil that India consumes is imported. So when there is global volatility, the country suffers. The fall of the rupee combined with local taxes ensure that consumers end up with intimidating retail prices for oil and gas. And, with US sanctions on Iran curbing the supply of oil in the global markets, there is no guarantee that oil supplies will come down anytime soon. 

The problems are there, but India is not bereft of solutions. Here are some steps which the country can take to minimize its dependence on foreign sourcing and reduce its fuel burden.

Domestic oil and gas production

The national exploration policy has improved since the NDA government took charge, but still the pace and efficiency of domestic exploration and development of oil and gas have to be enhanced.

Own, develop oil sources abroad 

The second best option after domestic sources are those which may be global but owned by Indian companies. ONGC, Indian Oil and Bharat Petroleum are among the Indian companies that own oil and gas fields abroad. The acquisition of more should be made a key priority.

Enhance alternative energy 

The focus on alternate energy, especially solar and wind energy, has picked up pace in recent years. These energy sources should try to replace fossil fuels as much as possible. Serious challenges remain on the transmission of solar energy which is impeding its large scale usage.

Electric vehicles 

After years of confusion, the government seems to be coming around to a clear policy on promoting electric vehicles. This is the need of the hour as reducing dependence on petrol and diesel is the best option to prevent the shocks of volatile oil prices. These are some of the steps that could solve India’s oil problems.

Tackling India’s water woes 

Moving on to water, India’s biggest problem is its over-dependence on the monsoon. Just 60 per cent of the country receives irrigated water. The rest of the land is dependent on monsoon rains. The major problem here though is that India has not invested in irrigation for decades. Though investment in irrigation is rising, it will take years for the country to reduce its reliance on the monsoon. Even if it does this, the country also has to deal with the problem of water wastage with rainwater harvesting struggling to become popular in many parts of urban India. In non-urban areas, poor water management, deforestation and unchecked development are not allowing water bodies to be sufficiently regenerated.

Lessons from Kerala

The recent floods in Kerala have highlighted another disappointing dimension of India’s dismal water management. The management of river dams by state authorities was so poor that much of the natural disaster’s impact was caused by waters released by the dams. Even though the dams were almost full before that phase of the heaviest rains, the water was not released in anticipation. As a result, when the rains intensified, the dam waters were also released. A combination of heavy rains and dam water flowing together was more than the capacity of rivers which flooded vast stretches of habitation and arable land.

This swing between drought and floods is an enduring tragedy for India’s economy and ecology. Add to this the volatility and import dependence on oil, and it becomes clear that India is wasting vital fluids and resources. Investment in water management and oil production is a priority for the country’s growth, for without it, India will remain stunted and weak. Focusing on these two should be a national priority with equal and urgent action from states.

The writer is an economic analyst and author of Kranti Nation: India and The Fourth Industrial Revolution. Views are personal.