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Policy uncertainty slows investment and implementation: state agencies and donors hesitate to redesign projects when a new national framework is pending

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Priyanka Vadrevu
Published 19.03.26, 08:23 AM

India is facing a deep crisis of water. Groundwater levels are falling across large tracts of the country, urban supply systems are leaky, rivers and aquifers are polluted, and climate variability is increasing extremes. The draft National Water Policy prepared under the stewardship of Mihir Shah promised a much-needed re-orientation from supply-expansion to demand-management, water-quality first, and integrated surface–groundwater governance. Yet, more than four years after the committee’s submission, the policy remains in limbo. On World Water Day (it falls on
March 22), this delay invites reflection.

The draft that the Shah Committee produced moves beyond the engineer-dominated, dam-and-scheme mindset of earlier decades toward a “One Water” approach that treats water quantity and quality together, insists on conjunctive management of surface and groundwater, elevates demand-management, and recommends decentralised, nature-based solutions and robust data systems for basin planning. It also recommends institutional reforms to enable integrated decision-making.

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So why hasn’t the revised policy been released? There are several interlinked reasons and any one of them would be sufficient to slow the process. First, water
is a state subject. A national policy that proposes changes to groundwater governance has to achieve state endorsement. Reaching consensus across 28 states and 8
Union territories, each with powerful irrigation departments, agricultural constituencies and local politics, takes time.

Second, the draft’s institutional suggestions — creating a national body with authority over both surface and groundwater management — carry legal, administrative and fiscal consequences. Ministries beyond Jal Shakti (agriculture, housing and urban affairs, finance, environment) must clear the text and work through implications for existing schemes such as Jal Jeevan Mission, AMRUT and Atal Bhujal Yojana. Inter-ministerial and legal vetting produces iterations, not instant signatures.

Third, many of the draft’s practical prescriptions — water pricing reforms, linking transfers to performance, greater transparency in allocation, and stronger regulation of groundwater — are politically sensitive. Farmers’ livelihoods, state revenues and electoral politics can all be affected; this generates legitimate pushback and necessitates calibrated, phased approaches.

While the delay is frustrating, it is also an opportunity. The government should use the time to design realistic sequencing, pilots and financing modalities that would allow states to adopt changes with safeguards for vulnerable communities. For example, demand-management in agriculture should be paired with investments in micro-irrigation, assured power reforms, crop diversification support and price assurances so that farmers do not bear disproportionate risk for public goods like aquifer health.

But there are concerns. First, policy uncertainty slows investment and implementation: state agencies and donors hesitate to redesign projects when a new national framework is pending. Second, India has seen many well-written policies that did not alter practice because governance incentives remained unchanged.

What should readers expect when the policy appears? Expect an emphasis on demand management, groundwater governance, water quality, decentralised solutions and improved data systems. Expect also careful language around institutional reform — likely phased, with pilot models and governance safeguards, designed to make the proposal politically tractable. Finally, transparency would help. Publishing the draft text, stakeholder submissions, and a timetable for consultations would reduce speculation and build pressure for decisive action. The pause should be used to forge a realistic, financeable and enforceable NWP, one that protects farmers’ livelihoods and the aquifers that sustain them.

Priyanka Vadrevu is Fellow, Climate Co-Adaptation at PlanAdapt, and an independent researcher

Op-ed The Editorial Board Water Crisis Union Jal Shakti World Water Day
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