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Role of Rivers in Indian Economy

  • Last Updated : 09 Nov, 2021

Since the inception of human civilization, rivers have been a significant part of human lives. Water has been the most precious natural resource since time immemorial. In fact, the earliest known human settlements were started around the river banks, for instance, the Indus valley civilization. The primary reason for these developments was the potential of rivers as a source of livelihood and to generate economic activities around them. Over the period, as human civilizations across the nation began to develop, the dimensions of rivers as a source of the economy also increased. Let’s discuss some spheres where we find the economic importance of rivers.

Human Settlement

As discussed above, river valleys provided the perfect space for human civilizations to grow. Even in modern times, we see most big cities across the world are situated around rivers. As a river fulfills several day-to-day needs of modern human lives, this is why areas around rivers are more potent for attracting people to settle around it. Thus, it helps in the development of a city with umpteen numbers of economic opportunities for people. The primary reason for the building and development of cities like Agra (R.Yamuna), Varanasi (R. Ganga), Guwahati (R. Brahmaputra), Prayagraj (confluence of R. Ganga and R. Yamuna), Delhi (R. Yamuna), Kolkata (R. Hooghly) was the fact that they are located around some river. One of the most significant projects is the Sabarmati Riverfront Development project in Ahmedabad. These developments have helped the region to improve the socio-economic atmosphere and eventually, to develop urban centers.


Traditionally, the Indian economy is considered to be an agro-based economy. Thus, to fulfill the need for agricultural activities, there is a high demand for water supply. Arguably the most crucial role that rivers play is in the field of agriculture. Despite the technologies of handpumps available, most farmers, even today, depend on rain for their need for water for the crops. Rainfall is quite uncertain, and with climate change, it has become worse. So, the river water fulfills the need for water for various crops. The river water is carried through the agricultural fields via canals.
Moreover, the area around the rivers is more fertile, especially in the case of Himalayan rivers, which bring requisite minerals from the mountains in the form of silt and sediments. These silt and sediments gradually settle and become fit for the cultivation of crops. This is the reason why the northern plains are the most fertile area of India. Thus, it gives a better possibility to the farmers to maximize their yield.

Industrial Development

Another significance of rivers is the development of industries across their course. One of the biggest blessings of rivers is the development of dams and hydropower projects on them. Today, electricity is so vital that we can’t imagine our lives without it. Jawahar Lal Nehru, the first Prime Minister of independent India, called dams ‘the temples of modern India. Indeed, dams have played a significant role in the nation’s development. They are used for generating hydroelectricity and irrigation purposes; for instance, the Bhakra-Nangal dam on river Satluj in Himachal Pradesh generates electricity and provides water to the farm fields. Moreover, India exports a fraction of hydroelectricity produced to Bhutan. This helps in building constructive bilateral relations.
If we look at the past few years’ trends, we notice that the total production of hydroelectricity has declined. According to the Central Electricity Authority’s(CEA) report, in the fiscal year 2019-20, the power generation from hydropower projects was only 11.2% of the total power generated. This is indeed a concern looking at the continuous increase in the power demand. The government must try to utilize the potential of the power projects.

Apart from the hydroelectricity projects, rivers are also helpful in supporting other industries as well. Industrial waste is thrown into the rivers after proper treatment. For instance, the industrial waste of Delhi and its nearby areas are thrown into the river Yamuna which helps the industries of this area flourish. If it were not for rivers, it would be quite difficult for the industries to boom.

As we know, India is a developing nation, which means that umpteen construction projects are going on. This vast number of construction sites require river sand extracted from river banks, such as the river Sone in Bihar. So, rivers are quite essential for the development of big industries.

Inland Navigation

Rivers also act as a means of transport. As compared to railways and roadways, waterways are the best alternative as far as pollution is considered. Moreover, waterways are much cheaper than the former two. This is why in the past two decades, there have been significantly huge investments in the development of these waterways by the government. In fact, National Waterways have been developed on the lines of National Highways to ensure smooth and secured travel. The National Waterway 1 is on the river Ganga between Haldia to Prayagraj. The Inland Waterways Authority of India(IWAI) which was constituted in 1986 is responsible for the development and regulation of inland waterways and the National Waterways. 
Another significant flagship program of the Ministry of Ports, Shipping, and Waterways is the Sagarmala Project which is a series of projects, approved by the Union government in 2015 to develop the coastline and the inland waterways to boom industrial development.


Fishing has been a significant activity in India for a long time. According to the Economic Survey of 2020-21, “The livelihood opportunities provided by this sector have been instrumental in sustaining incomes of over 28 million people in India, especially the marginalized and vulnerable communities, and has promoted meaningful socio-economic development.” Out of this total figure, a significant share comes from fishing in rivers. With the rise in the demand for meat consumption, the fishing industry has seen a boom in the past few decades. In fact, the Economic Survey also states that in the total agricultural exports, the marine products’ share is close to 19%, the highest of all. 
Rivers, being a source of clean water, acts as an ideal breeding ground for fish. One of the most popular rivers for fishing is the river Ramganga that flows through the Corbett National Park in Uttarakhand.

Boosting Tourism

Rivers also play a significant role in boosting the tourism industry in several ways. Some rivers form lakes on their course that booms tourism of that particular area. The amount of employment that these rivers generate for local communities is enormous. Lakes also provide ample space for sports like boating and water zorbing.
Also, some rivers flowing through mountains provide space for adventure sports like rafting. Thousands of people get attracted to these sports, especially the youth. Some famous rivers where rafting is quite popular are the river Ganga in Rishikesh (Uttarakhand) and river Beas in Manali (Himachal Pradesh). Every year tourists visit these places especially for these activities, thus boosting the tourism of that particular area.
In the past one and a half years, the tourism sector has suffered the most because of the two severe waves of the COVID-19 and lockdown. With the efforts like Aatm Nirbhar Bharat (self-reliant India), it is expected that when the COVID restrictions will ease, people will prefer to go to local tourist spots rather than to a foreign place. 

Looking at the Way Ahead

Indeed rivers are very important in building India’s economy. For more than two millenniums of the existence of Indian civilizations, rivers have played a significant role in the development of cities and in the process of urbanization. Rivers play such a crucial role not only for the development of our country but also for the smooth functioning of our daily lives. Thus, we must try to conserve the most precious natural resource, i.e., river water, as much as possible.

It has been seen that gradually the amount of water used in agricultural needs has been decreased. The reason is that the states of Punjab, Haryana, Uttarakhand, and parts of Uttar Pradesh consume most of the high flow water of the Himalayan rivers through canals, and by the time the river water reaches the plains, the flow decreases. There must be developments made in the conservation of canal water and new ways to construct canals; so that the river water is efficiently used. Otherwise, there would be an acute shortage of river water in the near future.

For the past few decades, it has been noted that river pollution has increased by significant levels because of human activities. To prevent this, the government has taken several steps. Conservation and cleaning projects dedicated to a particular river have been initiated like the Namami Gange (National Programme for Clean Ganga) which is an integrated conservation mission and was started in June 2014 by the Union Government under the Ministry of Jal Shakti. Moreover, the allocated budget for the mission is Rs 20,000 crores.
Also, the government has even banned the illegal mining of river sand bed, which is used for construction activities. People should also acknowledge the significance of rivers in the Indian economy and must do every bit from their respective ends. Or else the future generations would not be able to utilize the economic benefits of rivers.

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