The second phase of the Jal Jeevan Mission (JJM 2.0) is set to create a massive ₹3 lakh crore opportunity in operations and maintenance (O&M) for the Engineering, Procurement, and Construction (EPC) sector, according to a recent report by ICRA.

The report highlights that the government’s increased financial commitment and extended project timeline are expected to provide strong support to infrastructure and EPC companies during the next phase of the mission.

Bigger Budget, Extended Timeline

The total outlay for Jal Jeevan Mission has been significantly increased to ₹8.69 lakh crore, compared to the earlier ₹3.60 lakh crore. The Centre’s share has also gone up to ₹3.59 lakh crore from ₹2.08 lakh crore.

To achieve 100% tap water coverage for 19.4 crore rural households, the deadline has been extended to December 2028, from the earlier target of 2024.

Since its launch in 2019, the mission has already made substantial progress. Household tap water connections have increased nearly five times, from 323.6 lakh to 1,582.3 lakh, covering more than 81% of rural households as of February 2026.

Shift Towards Service Quality and Sustainability

ICRA noted that the focus in JJM 2.0 is gradually shifting from just building infrastructure to ensuring reliable service delivery. This includes stronger emphasis on:

• Operations and maintenance systems
• Water quality monitoring
• Digital tracking through platforms like Sujalam Bharat

This transition reflects a more long-term approach, where the goal is not just to provide connections, but to ensure consistent water supply and quality.

Challenges in Execution and Payments

The report also pointed out some challenges. There has been a gap between budgeted allocations and actual spending since FY2025, indicating execution delays and quality-related concerns.

For EPC players and vendors, payment delays remain a key issue, with receivable cycles currently extending beyond six months in several states. However, ICRA expects this to improve and come down to less than 60 days by September 2026.

Opportunities for EPC Players and Manufacturers

Despite these challenges, the O&M segment is expected to offer stable, annuity-like revenue streams, even though margins may be slightly lower compared to construction projects.

Additionally, manufacturers in sectors like PVC and HDPE pipes are likely to benefit, especially those with the capacity to scale production and maintain quality standards.

The focus on functionality and uptime is also expected to favour technically strong and branded manufacturers, creating a more competitive and quality-driven ecosystem.

Progress Across States

While 11 states and Union Territories have already achieved 100% coverage, around eight states are still below the 80% mark, indicating that there is still significant work ahead.

A Transformational Rural Initiative

Despite the challenges, the mission continues to deliver meaningful benefits, including better health outcomes, time savings, and improved livelihoods in rural areas.

Overall, Jal Jeevan Mission 2.0 represents a shift from infrastructure creation to sustainable service delivery, while also opening up large-scale opportunities for the EPC sector and allied industries.

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