India’s water and wastewater sector is moving beyond the traditional build-out phase towards a more performance-driven model of infrastructure management. Over the past year, this shift has become more visible across policy formulation, programme regulation and project execution. National programmes are increasingly bringing water supply, sewerage, drainage, river rejuvenation and water conservation under a more integrated framework. At the same time, the expansion of used water treatment capacity is being supported by its reuse mandates, stricter compliance requirements, digital monitoring, decentralised solutions and greater attention to operations and maintenance (O&M).
From schemes to systems: Government programmes broaden the mandate
Government programmes continue to drive large-scale investments in the sector; however, their focus is gradually moving beyond asset creation towards ensuring effective service delivery and operational sustainability. The extension of the Jal Jeevan Mission (JJM) as JJM 2.0 in March 2026, with an outlay of Rs 8.69 trillion, is a major step in this direction. The revamped programme places greater emphasis on service delivery, source sustainability, O&M and institutional reforms. As of August 2026, around 82 per cent of rural households have functional household tap connections, while multiple states and union territories have stepped up efforts to strengthen programme implementation under its reforms-linked implementation framework.
Urban programmes are following a similar trajectory. Under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and AMRUT 2.0, a wide range of sewerage, septage, stormwater and waterbody rejuvenation projects are under implementation. Around 5,611 million litres per day (mld) of water treatment, 7,380 mld of sewage treatment and 1,457 mld of recycle/reuse capacity has been created under the programme as of August 2026. The efforts extend to river management as well. The National Mission for Clean Ganga has completed Urban River Management Plans for 13 cities as part of its programme to cover 60 cities, linking river rejuvenation with wastewater, drainage and urban planning. The emerging approach is, therefore, less about individual schemes and more about connecting different parts of urban and rural water systems more efficiently.
Used water reuse as the central tenet of circularity
One of the strongest trends of the past year has been the transition from treating used water as a waste stream to treating it as a potential water resource. State governments are now forming unique policies to set and achieve definite reuse goals. West Bengal’s Policy on Safe Reuse of Treated Wastewater is an important example. The policy requires bulk users to maximise reuse for non-potable applications and targets meeting at least 20 per cent of the state’s industrial water demand through treated municipal wastewater by 2030. Bihar has adopted a similar policy framework covering industrial use, construction, irrigation, firefighting and other applications. Haryana has gone a step further, targeting 100 per cent reuse of treated wastewater by March 2031, with thermal power plants, industries, parks, green belts and agriculture among the priority users.
Cities are beginning to translate these policies into projects. Agra is developing a city-level reuse plan covering irrigation, lake rejuvenation and non-potable applications at railway and metro stations. Bengaluru is planning a major expansion of its treatment capacity, with total capacity expected to reach around 2,511 mld by 2029.The constraint, however, is no longer simply treatment capacity. It is the creation of a viable reuse ecosystem, encompassing pipelines, quality standards, pricing mechanisms and assured offtake.
Advanced industrial wastewater treatment and stringent compliance
Industrial wastewater treatment is becoming a more demanding proposition as environmental compliance tightens and industries face growing pressure to reduce freshwater consumption. The focus is moving beyond conventional effluent treatment towards advanced treatment, recycling, resource recovery, and wherever feasible, zero liquid discharge. This is particularly relevant for the cement, steel, chemicals, pharmaceuticals and other water-intensive industries. Moreover, there is increasing water demand from the data centre and semiconductor industry, with servers and chipsets typically consuming millions of litres of water daily.
Technology development is also becoming more industry- and application-specific. Researchers at BITS Pilani, Hyderabad, have recently developed a three-stage treatment technology for pharmaceutical and vaccine manufacturing effluents, reflecting the growing search for solutions that can handle complex industrial wastewater while improving water recovery. Similarly, data centres are increasingly adopting advanced cooling technologies such as direct-to-chip liquid cooling, adiabatic cooling and immersion cooling.
Smaller footprints, faster solutions: Decentralisation gains ground
Decentralised treatment is gaining traction as cities confront the limitations of extending conventional sewerage networks everywhere. Delhi is a prominent example. In July 2026, the Delhi Jal Board approved 15 decentralised sewage treatment plants (STPs) with a combined capacity of 103.5 million gallons per day at an estimated cost of nearly Rs 20 billion. The programme also includes sludge management systems for 10 STPs and in-situ treatment of the Najafgarh and Delhi Gate drains. Such interventions can help address localised treatment gaps, reduce the need for long-distance sewage conveyance and provide more flexible solutions in areas where conventional network expansion is difficult. The challenge will be to ensure that decentralised assets do not become isolated treatment islands. Their effectiveness will depend on reliable O&M, sludge management, monitoring and integration with the wider city water system.
Every lost litre becomes more expensive; higher stakes for 24×7 water supply
With freshwater resources under increasing pressure, reducing non-revenue water is becoming as important as creating new supply. Leakages, unauthorised connections, inaccurate meters and ageing networks continue to account for significant losses in urban systems. The sector is, therefore, seeing an increased thrust on drink-from-tap (DfT) services with 24×7 water supply and pressure management, district metered areas (DMAs), network rehabilitation, bulk metering and smart metering. Under AMRUT 2.0, 408 DfT projects have been approved, covering 1,153 DMAs across 349 urban local bodies (ULBs), as of March 2026, benefiting around 1.67 million households.
The focus is shifting from how much water a utility can produce to how much of that water actually reaches the consumer. To this end, the Bangalore Water Supply and Sewerage Board (BWSSB) has undertaken an advanced metering infrastructure (AMI) project with the procurement, installation and operations of artificial intelligence (AI)-enabled AMI smart water metering infrastructure for 100,000 water meters across BWSSB’s jurisdiction on a public-private partnership model. Similarly, the Drinking Water Department of Goa is planning to replace old water meters with smart meters.
O&M moves from fine print to a business model
The growing emphasis on service outcomes is making O&M critical for water infrastructure planning. For years, capex dominated the sector, while the quality of post-construction operations received comparatively less attention. This is changing. Cities are adopting a “one city, one operator” model, with a single private operator managing the development and O&M of infrastructure under a unified contract. For instance, the Greater Noida Authority has planned to hire a single private agency to undertake water supply and civic management in Greater Noida under the model. Similarly, VA Tech WABAG is operating and maintaining 22 STPs and 22 pumping stations under a 10-year O&M contract in Agra and Ghaziabad under the model.
The trend is also creating opportunities for specialised operators and technology providers. Performance-based contracts, design-build-operate models, remote monitoring and preventive maintenance are likely to gain ground as utilities seek to improve asset utilisation and plant performance. The real test, however, will be institutional capacity. Utilities will need stronger contract management, benchmarking and performance measurement to ensure that O&M arrangements deliver sustained improvements rather than short-term compliance.
Digitalisation pushes smart water transition
Digitalisation is increasingly moving from pilot projects to utility operations. Internet of things (IoT) sensors, supervisory control and data acquisition (SCADA), geographic information systems (GIS), smart metering, online quality monitoring and data analytics are being deployed to improve visibility across water and wastewater systems. To this end, the Municipal Corporation of Gurugram plans to set up its first micro data centre at its new Manesar office to digitise water supply and related assets. The facility will integrate GIS, AI, SCADA and IoT sensors for real-time monitoring of water infrastructure, while maintaining a digital asset inventory with unique IDs and early fault alerts. Greater Hyderabad Municipal Corporation has taken a similar stride by partnering with IIT Kharagpur and AIIMS New Delhi to establish an AI-driven water quality monitoring and early warning system in Hyderabad, with implementation expected in the third quarter of 2026. The main challenge for ULBs around technology uptake will be interoperability. They will need to move from isolated digital systems towards integrated platforms covering the complete water cycle.
Closing the loop
Water supply, used water treatment, reuse, drainage and river systems are increasingly being considered as interconnected components rather than separate infrastructure segments. Yet, significant gaps remain. Reuse markets need to be developed, tariffs and cost recovery mechanisms strengthened, digital systems integrated and ULBs equipped to operate increasingly complex assets. Treatment capacity also needs to be matched with adequate sewer connectivity and assured end-use reusable demand.
The sector is, therefore, entering a second phase of infrastructure development. The first phase was about building the pipes, plants and networks. The next will be about making these systems efficient, connected, measurable and financially sustainable. The ability to close this loop, technically, institutionally and financially, will determine how effectively India can convert its growing water infrastructure into genuine water security.
Shubhangi Goswami
