Treat water as paid infrastructure, not a free resource: CEA Nageswaran

Chief Economic Adviser V. Anantha Nageswaran on Monday called for a fundamental shift in how India views and manages water, urging policymakers to treat it as infrastructure that must be planned, built, and paid for — just like roads and power. Speaking at the CII Tamil Nadu Infrastructure Summit 2026 in Chennai, he warned that the current approach of pricing water at zero encourages waste and underinvestment, leaving the country vulnerable to shortages.

“We price water at zero, so we treat it as limitless. So we waste it, and we underbuild for it. And then, we are shocked when it runs out. The thing we call free is the thing we destroy. This is not a paradox. It is a policy choice, and it can be chosen differently,” Mr. Nageswaran said.

He emphasised the need for water buffer storage, stating that a good monsoon should be able to carry the country through a poor one. “The answer is to treat water the way we have finally learnt to treat roads and power: as infrastructure that must be planned, built, and paid for,” he added.

The Economic Adviser also highlighted a second, less visible policy trap: the floor space index (FSI), which regulates how much one can build on a given plot. He argued that India’s FSI is far below what cities around the world allow, forcing urban expansion outward. This sprawl consumes land, including old tanks and ponds that once served as water catchments.

“If we cannot build upward, we spread outward. Every square metre of built space then ends up carrying more land beneath it, and land grows scarce and also dearer. When land is that dear, the cheapest plot left is often an old tank or a filled-in pond, the very catchment that once held our water,” he said.

Mr. Nageswaran also addressed the social equity dimension of water pricing. He argued that underpricing water does not help the poor; instead, it benefits those who already have piped connections, while the unconnected are forced to buy from tankers at much higher rates. “Cheap water for the connected is, in effect, a subsidy that reaches the comfortable more than the poor it is meant to help. If we get the pricing honest, the genuinely vulnerable can be protected directly and, more precisely, the asset earns enough to reach those who do not yet have it,” he explained.

The plenary session was attended by C. Devarajan, Chairman, CII Tamil Nadu and Managing Director, URC Construction (P) Ltd.; Mohan Ramanathan, Convener, T.N. Infrastructure Panel and Managing Director, Advanced Construction Technologies Private Ltd.; P. Ravichandran, Chairman, CII Southern Region and President, Danfoss India; M.V. Satish, Adviser to Chairman & Managing Director, Larsen & Toubro Ltd.; and J. Murugavel, Vice Chairman, CII Tamil Nadu and Founder & CEO, Matrimony.com.

Mr. Nageswaran’s remarks come amid growing concerns over water scarcity in several Indian cities. His call for a more realistic pricing mechanism and higher density development is likely to spark debate among policymakers and urban planners.