India's water crisis could lead to unrest, hurt economic growth, Moody's warns

Severe water shortages in India could hurt its sovereign credit strength, according to Moody's Ratings, warning that the water crisis could lead to social unrest if the agriculture and industrial sectors are disrupted.

Rapid industrialization and urbanization, coupled with a meteoric economic expansion, has led to severe water shortage.

Extreme weather conditions including heatwaves and drought have exacerbated the situation, placing the world's most populous country in a dangerous spot, Moody's said in a report on Tuesday, warning that water scarcity might impede the country's sovereign credit health.

The credit rating agency has a stable outlook on India's Baa3 rating.

India relies substantially on monsoon rain for its water supply, but is also prone to severe and extreme weather conditions

Delhi, one of the world's most densely populated cities with over 200 million people, is knee-deep in a water crisis.

"There are 2.8 million people in the city who are aching for just a drop of water," Delhi Water Minister Atishi was quoted as saying on Monday, a day before she ended her hunger strike over the water crisis, as her health deteriorated.

Last week, the minister proclaimed that she would partake in a hunger strike until North Indian state Haryana released more water to Delhi from the Yamuna river, elaborating that it had released 110 million gallons per day less water.

In early June, the minister said the city was facing a water shortage of 50 million gallons daily due to a lack of raw water supply from the Yamuna river and other sources, the Economic Times reported.

The water shortage could interrupt agricultural production and industrial operations, "resulting in inflation in food prices and declines in income for affected