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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.

Sugar Rush, Structural Hangover

Writer: Parashram Patil
Parashram Patil
Aug 30
3 min read

India’s sugar crisis is less about one bad season than about the uneasy trade-offs between food, fuel, water and farm incomes

India’s latest sugar-price shock is a reminder that agricultural markets rarely obey the neat logic of supply and demand. Retail sugar prices surged towards Rs. 62–Rs. 67 a kilogram before easing after government intervention. But the episode exposes a deeper problem: India is asking its sugar economy to serve too many objectives at once - support farmers, supply consumers, produce ethanol, conserve water and compete globally.


The immediate squeeze was caused by several forces arriving together. Domestic sugar production fell short of initial expectations after erratic monsoons, waterlogging and uneven rainfall affected major cane-growing regions. At the same time, the rapid expansion of the E20 ethanol programme has diverted more cane juice and heavy molasses towards distilleries and away from sugar production. Ethanol is an important component of India’s energy strategy, but every tonne of cane redirected towards fuel has implications for the availability of sweeteners.


Inventory Troubles

Then came the inventory problem. Closing stocks fell to multi-year lows just as festive and wedding-season demand began to rise. Bulk consumers accumulated supplies, while speculative holding added to the pressure. What began as a supply squeeze therefore became a confidence problem, amplified by expectations of further scarcity.


The familiar response is to intervene. Yet abrupt export restrictions, emergency duty-free imports and changes in release quotas may calm prices today while making investment decisions harder tomorrow. The real requirement is not less government, but better government: one that anticipates shortages rather than reacting to them.


India needs a real-time sugar intelligence system combining satellite-based weather information, actual mill yields and independently verified inventory data. Policy makers should know much earlier whether the crop is heading for a surplus or deficit. Ethanol procurement prices should also be calibrated against minimum domestic sugar-reserve requirements. Energy security should not accidentally become food-price insecurity.


The problem is particularly acute in Maharashtra, one of India’s great sugar-producing states. Its cooperative sugar belts demonstrate both the strengths and limitations of the traditional model. Government intervention has historically shaped cane prices, mill operations and monthly sugar releases. Some regulation remains necessary, especially where millions of farmers depend on the industry. But rigid controls can also discourage efficiency and innovation. Mills need greater operational flexibility, accompanied by transparent safeguards for consumers and growers.


Water Woes

Water is the harder question. Sugarcane is a thirsty crop, and its intensive cultivation in semi-arid regions creates an uncomfortable contradiction: a crop that provides livelihoods and supports an enormous processing ecosystem can also consume resources that are increasingly scarce. Maharashtra cannot indefinitely treat water-intensive cane cultivation as though water were unlimited.


The answer is not to abandon sugarcane, but to grow it more intelligently. Precision irrigation, including micro- and subsurface-drip systems, can reduce wastage and ease pressure on groundwater. Farmers also need greater encouragement to diversify, adopt climate-resilient varieties and use mixed-cropping systems. Lower chemical dependence and better soil management can reduce input costs while making farms more resilient to erratic weather.


Environmental management must extend beyond water. Pre-harvest burning releases smoke, toxic gases and fine ash, imposing costs on local air quality. Mechanised green-cane harvesting and better management of crop residue offer a route towards cleaner production without sacrificing agricultural productivity.


The larger opportunity lies in moving India’s sugar industry up the value chain. India has the land, processing capacity and cooperative infrastructure to become a global leader. But leadership cannot mean simply producing more bulk sugar and seeking overseas markets whenever domestic stocks permit.


Indian mills and farmer organisations should capture more of the value created after the cane leaves the field. Farmer-producer organisations and cooperatives can participate more deeply in ethanol derivatives, cogenerated power, refined and specialty sugars and other downstream products. Traceability and sustainable production could help Indian sugar command better prices in premium international markets.


None of this will work without predictable trade policy. Exporters cannot build reliable global businesses if the rules change abruptly whenever domestic prices rise. Nor can farmers make long-term planting decisions when the economics of their crop are repeatedly altered by administrative intervention.


India needs a sugar policy that thinks several seasons ahead. For Maharashtra and the rest of the country’s sugar economy, that means better data, smarter water use, predictable trade rules, more diversified farms and greater value addition.


(The writer is a member of Maharashtra Agriculture Price Commission. Views personal.)

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