Treat water as infrastructure that must be built, paid for: CEA

Chief Economic Adviser to the Government of India V. Anantha Nageswaran on Monday said water should be treated as infrastructure that “must be planned, built, and paid for”. He called for a policy that did not price water at zero and treat it as limitless. Mr. Nageswaran said the floor space index (FSI) was far below what other cities around the world allowed.

Addressing the special plenary session of CII Tamil Nadu Infrastructure Summit 2026 in Chennai, Mr. Nageswaran said: “The answer is to treat water the way we have finally learnt to treat roads and power: as infrastructure that must be planned, built, and paid for. We need a water buffer storage so that a good monsoon carries us through a bad one.”

He further said: “We price water at zero, so we treat it as limitless. So we waste it, and we underbuild for it. And then, we are shocked when it runs out. The thing we call free is the thing we destroy. This is not a paradox. It is a policy choice, and it can be chosen differently.”

Mr. Nageswaran also listed the floor space index as the second trap, one that was less visible than the first. “We hold the floor space index — the amount one may build on a given plot — far below what other cities around the world allow. If we cannot build upward, we spread outward. Every square metre of built space then ends up carrying more land beneath it, and land grows scarce and also dearer. When land is that dear, the cheapest plot left is often an old tank or a filled-in pond, the very catchment that once held our water,” he said.

“Underpricing does not help the poor. It helps whoever already holds the connection. The household with the piped supply pays a pittance. The household without one buys from the tanker at several times the rate. Cheap water for the connected is, in effect, a subsidy that reaches the comfortable more than the poor it is meant to help. If we get the pricing honest, the genuinely vulnerable can be protected directly and, more precisely, the asset earns enough to reach those who do not yet have it, he added.

C. Devarajan, chairman, CII Tamil Nadu & Managing Director URC Construction (P) Ltd.; Mohan Ramanathan, convener of T.N. Infrastructure Panel and Managing Director, Advanced Construction Technologies Private Ltd.; P. Ravichandran, chairman, CII Southern Region, and president, Danfoss India; M.V. Satish, adviser to Chairman & Managing Director (CMD), Larsen & Toubro Ltd.; and J. Murugavel, vice chairman, CII Tamil Nadu, and Founder & CEO, Matrimony.com, participated.