Water is renewable resource, made available by the natural hydrologic cycle of the coupled atmospheric-oceanic-terrestrial system. In this sense, continued flows of water are not affected by withdrawals and use. Unlike non-renewable resources such as coal or oil, the amount of water available or use in a basin in the future is not necessarily altered by past withdrawals of water in that basin.
Water finds application in many competing areas as a multi-use resource. Water is the very basis of all life forms. Human body needs a regular intake of water to sustain itself and make a productive existence possible.
The provision of safe drinking water through easy sources becomes the prime responsibility of a civilised society and a welfare state. It is, therefore, important that not only drinking water should be available whenever and wherever it is required, but also it should be free of pollutions. Polluted water is a big threat to health, and hence to human capital.
Water is the basis of all agricultural activities. All crops, whether dry or wet, require water in some degree. Some crops may require it in a small quantity other crops may simply be water-guzzlers. A large part of the Available supply of water in the economy needs to be diverted for use in Agriculture as rain water never suffices. Water is required in industry as it is an important intermediate good in a number of manufacturing industries. In construction too, water is an indispensable input.
Water is an important source of energy-hydro energy-in the economy. A large mass of water is collected in man-made reservoirs and energy is produced out of it. Energy in turn, is a single major factor that distinguishes a developed economy from a developing economy.