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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.

Surplus ethanol leaves the industry uneasy

Dec 22, 2025
2 min read

THE ETHANOL CONUNDRUM - Part - 1


Entrepreneurs unhappy as expansion plans stall

Kolhapur: An ambitious government programme that once drew enthusiastic participation from industry is now threatening to trip up the very sector it sought to promote. India’s ethanol manufacturing industry is grappling with a paradox: despite strong policy backing, assured pricing and generous financial incentives, producers are staring at excess capacity and inadequate procurement orders.


The Centre’s push to blend ethanol with petrol — initially pegged at 30 per cent — was accompanied by long-term financial support, low-interest loans and firm purchase guarantees. The policy certainty encouraged rapid capacity addition, with manufacturers investing heavily and ramping up production. However, supply has now far outstripped demand, leaving the industry anxious about how to absorb the surplus.


Unless addressed urgently, industry insiders warn, the situation could echo the collapse witnessed during the UPA years under then Prime Minister Manmohan Singh, when policy uncertainty led to a near-decimation of the ethanol sector.


The ethanol blending programme was conceived against the backdrop of rising foreign exchange outgo on fuel imports, increasing pollution from fossil fuels, and mounting surplus sugar stocks during crushing seasons. In 2018, the Centre unveiled the National Bio-Energy Policy, setting targets of 10 per cent ethanol blending by 2022 and 20 per cent by the end of 2025.


Sugar Stability

A robust floor price for ethanol brought stability to the sugar sector, with surplus sugar diverted towards ethanol production. The 10 per cent blending target was achieved well ahead of schedule. The government expanded the scope to include ethanol production from grains, bringing the food processing sector into the fold.


To promote grain-based ethanol — from cereals, mixed grains and maize — the Centre rolled out long-term credit and interest subvention schemes. Before the scheme’s deadline in 2024, over 196 entrepreneurs came forward, leading to a rapid build-up of ethanol plants and a sharp rise in production. But procurement orders issued by oil marketing companies (OMCs) have now left many of these investors worried.


At present, India’s installed ethanol production capacity stands at about 19.9 billion litres (1,990 crore litres). With several projects nearing completion, capacity is expected to touch 22 billion litres by the end of December. In contrast, achieving 20 per cent blending requires only about 13.5 billion litres of ethanol.


Accordingly, OMCs have issued procurement orders for around 14.82 billion litres — barely 50 per cent of the available capacity. This effectively leaves half the ethanol produced without buyers. Some plants have received orders for just 30 per cent of their capacity, forcing producers to consider shutting operations for over 45 days, and in some cases up to three months.


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