Mr Palaniswami said the government would urge builders to use an alternative to sand.
Illegal sand mining has led not only to a fall in water level in river beds and basins, but also affected flow of rivers across the state.
The failure of both South West Monsoon and North East monsoon and over-exploitation of available groundwater for both residential and commercial purposes have only exacerbated the problem.
The chief minister said steps would also be taken to improve the water table in Tamil Nadu.
The chief minister was here to participate in various programmes, including inauguration of some bridges.
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