Global rating agency Moody's Ratings has issued a stark warning about India's growing water shortage, stating that it could severely impact the credit health of sovereign and water-dependent industries such as coal power generators and steel-makers.
In a report released on June 25, Moody's highlighted that the worsening water crisis may increase volatility in economic growth and weaken the country's ability to withstand economic shocks.
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The report noted that the swift industrialization, urbanization, and rapid economic growth in the world's most populous country are depleting its water resources.
The agency also pointed out that a diminishing water supply could adversely affect agriculture, leading to higher food inflation and reduced income for certain businesses.
Moody's maintains sovereign rating with a stable outlook for India and projects that the country will be the fastest-growing major economy in 2024, with a growth rate of 6.5 percent.