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By:

Rajendra Pandharpure

15 April 2025 at 7:55:54 pm

Pune’s drought could dry up business

Water rationing threatens to hit the city’s wedding industry, construction sector, retail trade and livelihoods. Pune : Pune is beginning to feel the economic sting of drought. A 10 percent cut in the city’s water supply has already been implemented, and the municipal administration has indicated that the reduction could rise to 20 percent or more over the next two to three months. What appears at first to be a water-management crisis could soon become a wider economic problem, affecting...

Pune’s drought could dry up business

Water rationing threatens to hit the city’s wedding industry, construction sector, retail trade and livelihoods. Pune : Pune is beginning to feel the economic sting of drought. A 10 percent cut in the city’s water supply has already been implemented, and the municipal administration has indicated that the reduction could rise to 20 percent or more over the next two to three months. What appears at first to be a water-management crisis could soon become a wider economic problem, affecting businesses, construction activity, employment and household budgets. The Pune Municipal Corporation has begun shutting off the water supply every Thursday. Swimming pools and vehicle-washing centres have been closed, while the use of water for construction has been prohibited. The state government has directed the civic administration to ensure that the reserves in the Khadakwasla dam chain, which supplies Pune, last until August 2027. The challenge could become more acute in the months ahead. Meteorological experts have forecast a milder winter and significantly higher temperatures this year. If these predictions hold true, increased evaporation could place further pressure on the city's water reserves, potentially necessitating stricter rationing. For residents accustomed to a relatively abundant water supply, cuts of 20 percent or more would demand a substantial adjustment in daily life. Intense Pressure The economic consequences are beginning to emerge. The closure of vehicle-washing centres has deprived young people employed in low-skilled jobs of their livelihoods. Swimming-pool closures have similarly affected security guards and lifeguards. These may appear to be small, isolated losses, but they expose a larger problem: when water-intensive businesses are forced to shut down, the burden falls disproportionately on workers with few financial reserves and limited employment alternatives. The impact could spread to Pune’s lucrative wedding industry. The wedding season traditionally gathers momentum after Tulsi Vivah in the month of Kartik, generating business worth more than Rs. 200-250 crore. Pune has long attracted affluent families from outside the city who prefer its venues and facilities for wedding celebrations, partly because of its historically reliable water supply. Persistent restrictions could undermine that advantage. Wedding venues, caterers, hotels and other service providers depend on a dependable water supply to operate. If rationing becomes more severe, organisers may reconsider their choice of venue, while businesses could face higher operating costs and disruptions. An industry that generates substantial seasonal revenue also supports a network of workers and small enterprises, making the potential economic fallout wider than the immediate loss of bookings. Rural-Urban Connection Pune’s commercial fortunes are also linked to the health of the rural economy. A good agricultural harvest typically improves rural incomes, supporting spending on goods and services in urban markets. When farm earnings weaken, that spending tends to contract, affecting traders, retailers and other businesses. If rural incomes remain subdued, the city’s commercial sector could face an additional headwind at a time when water scarcity is already threatening business activity. The interaction between agricultural distress and urban water shortages could therefore deepen the economic slowdown. Construction presents another major vulnerability. Like many large cities, Pune depends heavily on real estate and infrastructure development to sustain economic activity and employment. Construction projects generate demand across a broad network of industries, from building-material suppliers and transport operators to contractors and daily-wage workers. A prolonged restriction on construction-related water use could delay projects, raise costs and disrupt work schedules. If projects stall, the effects will extend beyond developers to workers, suppliers and businesses that depend on the real estate sector. Rising Inflation For ordinary citizens, the prospect of tighter water rationing comes amid an already difficult cost-of-living situation. Food and restaurant prices have risen sharply. A cup of tea now costs more than Rs. 30, while a serving of idli-sambar can exceed Rs. 90. Even street food, traditionally an affordable option for working people, has become increasingly expensive. These prices illustrate the pressure on household budgets, particularly those of workers whose incomes have not kept pace with rising costs. If water shortages push up operating expenses for restaurants, caterers and other businesses, consumers could face further increases. The extent of any additional price rise will depend on how severe and prolonged the restrictions become. The working class is particularly exposed. Workers in vehicle-washing centres, swimming pools, construction and allied services may lose income precisely when everyday necessities are becoming more expensive. Unlike larger businesses, many such workers have little capacity to absorb a prolonged interruption in earnings. Pune’s immediate challenge is to conserve enough water to carry the city through the coming months. Yet the implications of the drought extend well beyond household taps and civic supply schedules. Trade, real estate, hospitality and seasonal businesses all depend, directly or indirectly, on the availability of water. The two sectors facing particular uncertainty are trade and real estate. The former could suffer from weaker consumer spending and disruptions to commercial activity; the latter could be affected by restrictions on construction and the risk of project delays. The consequences would be felt across employment and the wider urban economy. Pune’s residents and businesses have not had to contend with water cuts of 20 percent or more on a sustained basis. Adapting to such restrictions will be difficult, especially if temperatures rise and the drought persists.

Investing in Gold—The Smart, Systematic Way

Writer: Sayli Gadakh
Sayli Gadakh
Mar 4
3 min read

Indians love buying gold, but jewellery is tradition — not investment.

Gold has always held a special place in Indian households. From Dhanteras purchases to wedding jewellery, gold is deeply woven into our culture. However, beyond tradition, gold has also proven itself to be a powerful financial asset.


Today, India is among the world’s largest consumers of gold, with annual demand typically ranging between 700 and 800 tonnes. Indian households are estimated to hold over 25,000 tonnes of gold, making it one of the largest private gold reserves in the world.


However, while cultural buying continues, financial investment in gold requires a disciplined and systematic approach.


Gold by the Numbers: Why It Matters

Over the last 20 years, gold in India has delivered an approximate 10–12% annualised return, broadly in line with inflation-beating assets.


In 2003, gold was priced around ₹5,600 per 10 grams. In recent years, it has crossed ₹60,000 per 10 grams, showing substantial long-term appreciation.


During periods of market stress (such as the 2008 financial crisis and the 2020 pandemic), gold prices surged while equity markets corrected sharply.


These numbers highlight gold’s real strength and wealth protection during uncertainty.


Why Include Gold in Your Portfolio?

Gold plays a strategic role in financial planning:

•Acts as a hedge against inflation

•Provides stability during stock market volatility

•Diversifies overall investment risk

While gold does not generate dividends or interest income (except certain instruments), it reduces portfolio volatility when combined with equities and debt.


An Emotion, Not an Investment

Despite widespread belief, jewellery is not an efficient investment due to:

• 8–25% making charges

• Wastage charges

• Storage and safety concerns

• Lower resale value


On resale, investors often lose a significant portion of these charges. Jewellery should therefore be treated as consumption, not investment.


Smarter Ways to Invest in Gold

1. Sovereign Gold Bonds (SGBs) – These bonds are issued by the Reserve Bank of India on behalf of the Government of India. SGBs combine price appreciation with fixed returns.


Key advantages include 2.5 per cent fixed annual interest, no storage risk, capital gains tax exemption if held for 8 years and government-backed security.


Since its launch in 2015, lakhs of investors have participated in SGB schemes, making them one of the most tax-efficient gold investment avenues.


2. Gold ETFs – Gold ETFs are traded on exchanges such as the National Stock Exchange and Bombay Stock Exchange.


Benefits include high liquidity, no making charges, transparent pricing, and being held in Demat form.


Assets under management (AUM) in Indian Gold ETFs have grown significantly in recent years, especially during periods of market volatility, reflecting rising investor awareness.


3. Gold Mutual Funds – These funds invest in Gold ETFs and are ideal for investors without a Demat account. They allow monthly investment through SIP (Systematic Investment Plan), helping investors benefit from rupee cost averaging and disciplined investing.


Power of Systematic Investment

Instead of investing a lump sum during festive seasons or market rallies, allocating a fixed monthly amount ensures better cost averaging, reduced emotional decision-making and alignment with long-term financial goals.


Data consistently shows that disciplined investors tend to achieve more stable long-term returns compared to those who invest based on short-term market movements.

How Much Gold Is Enough?


Financial planners typically recommend allocating 5% to 15% of the total investment portfolio to gold.


Higher allocation may reduce overall portfolio growth, as gold does not generate active income like equities or business investments. Its role is protection, not aggressive growth.


Taxation Considerations

Tax treatment depends on the investment mode and holding period:

• SGBs offer a capital gains exemption if held till maturity.

• Gold ETFs and mutual funds are subject to capital gains tax as per prevailing laws.


Investors should review updated capital gains provisions before investing.

Gold should not be your primary wealth creation tool, but it should certainly be your financial safety cushion.


In a country like India, where gold is both emotional and economic, the right approach is balance. Move from impulsive buying to systematic investing. Allocate wisely, invest regularly, and let gold quietly strengthen your portfolio against uncertainty.


Tradition may inspire gold buying, but a disciplined strategy ensures financial security.

(The writer is a Chartered Accountant based in Thane. Views personal.)

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