Jal Jeevan 2.0 Is Back, But India’s Water Contractors Still Don’t Trust States With Payments

By Dev Chandrasekhar

When Prime Minister Modi launched the Jal Jeevan Mission in August 2019, the promise was a working tap connection in every one of India’s 19.36 crore rural homes within five years. 

By March 2026, the dashboard reported 15.80 crore households connected, around 81.6% of rural India. Still, Sunil Katial, who runs Electrosteel Castings, India's largest ductile-iron pipe maker and a top supplier to JJM's pipe-laying contractors, told analysts in February that water actually flows reliably from only about 50 to 55% of those taps. 

An independent check points the same way: the National Sample Survey's 79th round found just 30% of rural households had piped water as their main source at home, against the more than 60% the mission's own administrative data claimed at the time.

Coverage thus has fallen well short of the claim, and the firms that closed even that smaller gap, by laying the pipes and building the schemes, have been saddled in turn with the cost of the failure, in the form of bills the government has not paid. 

On 10 March, the Cabinet relaunched the scheme as JJM 2.0, with a longer deadline and a larger outlay. The contractors who built the first phase have not waited to find out if this time is different.

Why? 

Budget 2025-26 had set aside Rs 67,000 crore. The Revised Estimate, presented in February, came in at Rs 17,000 crore: a cut of three-quarters, leaving roughly Rs 50,000 crore unspent. The new Budget restores the headline allocation to Rs 67,670 crore. The mission is funded again on paper.

Many invoices submitted more than a year ago, signed off as work completed, are still waiting to be paid, most in Uttar Pradesh and Maharashtra. Industry body Assocham has written to the Jal Shakti ministry asking for a public payment dashboard and a mechanism to compensate firms for the wait.

Katial estimated that roughly Rs 30,000 to 35,000 crore is owed to contractors across the sector. He described demand for pipes, once half of Electrosteel’s domestic market, as having hit a “pause button”, with funding releases stalled and central audit teams investigating reports of “sham fulfilment” on the ground. — connections logged as complete in the mission's records that do not, in practice, deliver water.

Another leading infrastructure company, NCC Ltd, the most exposed listed contractor, sits on Rs 7,000 crore of unfinished JJM work, around a ninth of its order book.  

Why It Matters 

With JJM 2.0, the government has effectively conceded that the original 2024 deadline was missed, that the headline coverage figure was flattered by counting pipes that did not always carry water, and that delivering through state governments was always going to be vulnerable to local capacity and politics.

The new outlay is Rs 8.69 lakh crore through December 2028, with the Centre’s share rising by Rs 1.51 lakh crore to Rs 3.59 lakh crore, well short of the Rs 2.79 lakh crore the Jal Shakti ministry had requested. Sujalam Bharat, a national digital register, will track water from source to household tap; certification will require village panchayats to confirm that local maintenance is in place, not just that pipes have been laid.

None of which addresses the cash-flow problem.

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$2.849 billion

That’s how much foreign portfolio investors (FPIs) have poured into Indian equities in August 2026 so far, the highest monthly inflow since September 2024, according to data by the National Securities Depository Limited (NSDL).

FPI data in recent months:

• May 2026: Net outflows of $3.5 billion

• June 2026: Net outflows of $5.2 billion

• July 2026: Net inflows of $2.3 billion

• August 2026: Net inflows of $2.8 billion

Origin: Analysts say FPIs are returning as Indian corporate earnings show signs of recovery, the rupee remains relatively stable and global investors rotate money out of the overheated “chip trade” in markets such as South Korea and Taiwan. Expectations of US rate cuts have also improved sentiment.

Despite the recent buying, FPIs remain net sellers in Indian equities in 2026, with cumulative outflows of $24.31 billion so far this year.

What’s Next: Further FPI flows are likely to remain sensitive to US Treasury yields, the dollar, crude oil prices and corporate earnings. As Shankkar Aiyar told The Core Report, foreign investors also remain concerned about the predictability of rules, compliance requirements, delays in permits and clearances, and court delays.

Nestle's Condition for Food Labels

Nestle CEO Philipp Navratil wants companies to be part of drafting the rules about what front-of-pack food labelling in India should look like and to ensure it is done ‘scientifically’.

Navratil said this to Economic Times after a Reuters report revealed that Coca-Cola, Nestle and industry groups successfully pushed back against India's food warning label proposals in a March meeting with regulators.

Context: Nearly 80% of India's packaged food and beverage products, a market worth over $100 billion, could be classified as high in fat, sugar or salt, according to industry estimates.

Both Coca-Cola and Nestle have voluntarily used front-of-pack warning labels in European markets for years.

A can of Fanta in London has 63 calories; the same-sized can in India has 185 calories and three times as much sugar, Reuters reported.

Flashpoint: The Reuters report triggered a wave of consumer anger on social media. India's Supreme Court has slammed the government for delays and called for front-facing warning labels.

E20 Stays, BPCL Clarifies

Government-owned oil and gas company Bharat Petroleum Corp Ltd (BPCL) has clarified that there is no decision to replace E20 petrol with E10. Chairman Sanjay Khanna said the debate centres on whether older vehicles should get access to lower-ethanol fuel, not on scrapping E20.

The Shift: Switching from E20 to E10, if the government decides, would pose no operational challenge for oil companies, Khanna added.

The Core earlier reported how some customers are bearing the unintended costs of this fuel transition.

Setup: The renewed debate follows the government's Chief Economic Advisor V Anantha Nageswaran, alongside Akash Poojari, who is a consultant in the Department of Economic Affairs, suggesting E10 be restored to protect India's 75-80 million older, carburettor-based two-wheelers vulnerable to E20, even as officials maintain no decision has been made.

Temasek’s Air India Headache

Singapore opposition lawmaker Kenneth Tiong has opposed any further funding of Air India by Singapore Airlines (SIA), after the Indian airline sought about $1.5 billion in fresh equity from its owners, Tata Sons and SIA.

Context: SIA owns 25.1% of Air India, while Temasek is its majority shareholder. Tiong argues that any further funding by SIA could indirectly affect the Singapore state investor.

Flashpoint: Tiong said SIA should fund its Air India investment independently and has asked Singapore’s transport minister whether losses from SIA’s foreign associates could affect its ability to provide essential transport services. Parliament will take up his questions on September 8.

The pushback comes as Air India struggles through a costly turnaround. Air India and Air India Express reported a combined $2.33 billion loss in FY26, while SIA booked $945 million of its share of Air India’s losses. Tata chairman N. Chandrasekaran has said the turnaround could take up to a decade.

Nuclear Reform Faces New Hurdles

India's new draft nuclear rules could weaken the country's biggest nuclear reform in years, as the rules add extra approval steps for foreign-made reactors, Reuters reported.

The draft follows a law passed last year that opened India's nuclear sector to private companies for the first time. The Core earlier reported on how there is still a long road ahead to India's nuclear ambitions.

Catch Up Quick: Under the new rules, foreign reactor technology needs approval from its home country, plus a separate safety review from India's nuclear regulator, before construction can even start. Experts say this could kill off newer technology like small modular reactors and cause long delays, since companies can't begin site work until the design is approved.

The Lead: The rules also don't explain important business details, like how much companies can charge for power or what profits investors can expect, resulting in companies holding back on investment decisions.

The government will accept feedback until September 4, and final rules are expected in about three months.

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Benchmarks Slide Again Despite Oil Prices Falling

On Episode 961 of The Core Report, financial journalist Govindraj Ethiraj talks to Ajay Srivastava, Founder at the Global Trade Research initiative (GTRI) as well as Dr. Michael Chui, senior fellow at QuantumBlack, AI by McKinsey.

• Benchmarks Slide Again Despite Oil Prices Falling

• Only 40 Of 53 Companies That Listed Their Shares In 2026 Are Trading Above Their IPO Issue Price

• What India Needs To Learn From Canada’s Trade Response To US

• More Indians Are Acquiring Credit Cards But They Aren’t Using Them

• Companies Are Investing More In Ai But Where Is It Paying Off?

• Why Gold Vaults Are Running Full World Over