In a move towards ensuring water sustainability and advancing a circular economy in urban development, the state government recently came up with a policy to reuse at least 50 per cent of used water by 2036, when Odisha will complete 100 years of formation.
Notified under the Policy on Reuse of Treated Used Water of Urban Odisha, 2026, the policy aims to provide a comprehensive roadmap to transform used water from waste by-product into a valuable economic resource.
Importantly, it addresses the growing seasonal and spatial water stress across urban centres of the state.
The policy promotes the use of treated water across multiple sectors to reduce dependence on freshwater sources, including municipal and institutional uses such as road cleaning, firefighting, sanitation, gardening and HVAC systems.
The policy decision comes at a time when the world including India faces water shortages. According to the NITI Aayog, nearly 600 million Indians face high to extreme water stress, with demand projected to outstrip supply by 2030. Odisha’s cities generate over 1,100 million litres per day (MLD) of wastewater. If even 50% of this is reused by 2036, the state could save roughly 550 MLD of freshwater every day, claim experts. It is enough to meet the daily needs of nearly 4–5 million people, based on standard urban consumption norms.
Odisha has notified the TUW Policy, 2026, marking a significant step towards sustainable water management and circular economy practices. The policy targets 100% treatment of used water across ULBs by 2030 and aims to scale reuse to 50% by 2036, while promoting the use of treated… pic.twitter.com/qstFzQklbA
— CMO Odisha (@CMO_Odisha) April 30, 2026
The advantages
Reduce pressure on freshwater stress
The reuse of water will go a long way in reducing pressure on key water sources such as the Mahanadi River and groundwater reserves, ensuring that potable water is prioritised for households rather than diverted to industrial or non-essential uses. In a future marked by erratic rainfall and rising temperatures, this shift alone could prevent urban water crises.
Fiscal efficiency
The policy makes strong economic sense. Treated wastewater is expected to be priced 20–30% lower than freshwater, creating a natural incentive for industries to switch. For water-intensive sectors such as steel, aluminium, and thermal power where daily consumption can run into millions of litres, this can translate into annual savings of ₹10–20 crore for a single large plant. Such cost efficiencies can significantly enhance Odisha’s attractiveness as a manufacturing destination.
Boost to agriculture
The benefits extend beyond industry. Treated wastewater can be channelled into agriculture, particularly for non-food and industrial crops. Even a modest diversion of 100–150 MLD could help irrigate 20,000–30,000 hectares annually, reducing farmers’ dependence on monsoon variability and groundwater extraction. In a state where agriculture remains a key livelihood source, this could stabilise incomes and improve resilience.
Environmental and health gains
India currently treats only about 30% of its sewage, leading to severe river pollution. Odisha’s plan to move towards 100% treatment will not only cut untreated discharge into rivers and lakes but will also improve water quality in urban ecosystems and reduce water-borne diseases like Cholera, Typhoid, and Diarrhea by breaking the contamination cycle. Treating sewage before discharge can prevent pathogens from entering rivers and groundwater, improving overall water quality. Cleaner water bodies mean safer domestic use and less human exposure, especially in urban areas with poor sanitation.
The most underappreciated advantage is climate resilience. As Odisha faces floods during intense monsoons and water scarcity during dry months, by treating and reusing wastewater, cities can create a reliable, rainfall-independent water buffer. A city recycling even 200 MLD can maintain essential services during drought-like conditions, insulating both citizens and businesses from climate shocks.
There is also a fiscal logic to this approach. Developing new water sources such as dams, inter-basin transfers, or long-distance pipelines is capital-intensive and often environmentally disruptive. In contrast, wastewater reuses existing urban flows. Estimates suggest it can be 30–40% cheaper than creating new freshwater supply systems over the long term, making it a financially prudent strategy for the state.
Odisha may not be the first mover, but it could well be the defining gamechanger. In a country where water scarcity is fast becoming a constraint on growth, the state’s shift from extracting more to using better marks a decisive break from the past. If executed with discipline, this policy can turn wastewater into a strategic asset, fuelling industry, stabilising agriculture and protecting public health.
