Once serene and a treat to the eyes, the diminishing freshwater habitat of Madhavaram poses a grave threat to the groundwater needs of the city while enhancing the risk of monsoon flooding. Biodiversity in and around Retteri Lake (or Madhavaram Tank) is fast depleting, thanks to a multitude of industrial units and shops that have sprung up in the area. Effluents from these establishments and unmonitored dumping of garbage have taken a heavy toll on the fragile lake.

The population of Madhavaram has grown by leaps and bounds since the area was brought under Corporation of Chennai limits in 2011, alongside the proliferation of industrial units that pumped sewage directly into the Retteri Lake and other water bodies in the vicinity. At the canal near Vadaperumbakkam, a network of pipes carry sewage from surrounding restaurants and shops into the lake. With rampant construction activity round the year, debris is dumped with unscrupulously.

The wetlands of Madhavaram are among the city's 3 most fertile bio-diversity hotspots; the others are around Ambattur and Korattur lakes nearby. The freshwater habitat is home to exotic flora and avian species like the common kingfisher, pied kingfisher, myna, great heron, purple heron, spotted dove and spot-billed pelican. The construction of a national highway that runs through the lake, has divided the Retteri lake. The blocked waterway has clogged inlets and outlets, leading to flooding during monsoon. Unplanned construction and dumping of construction and demolition waste has robbed the wetland of its property to act as a sponge when it rains, absorbing and filtering water, and recharging the city's groundwater, causing an imbalance in the habitat.

Another major pollutant is the chicken waste dumped by butchers on the roadside, particularly along the periphery of Retteri Lake. Antibiotic residue in hormone-injected chickens spreads through water and soil, and lands up in crops, making way for a number of serious infections. The diminishing water level of Retteri Lake is a big threat looming large over the city's groundwater needs.

Retteri Lake acts as a tank that supplies water to the southern parts of the city. But now the tank water is polluted with heavy metals and toxins through dumping of sewage and garbage. As a result, the localities that depend on it are being affected too. The ecosystem has depleted steadily over the years. Many rare species of flora and fauna have disappeared from Madhavaram forever. Local NGOs are vociferating for immediate action by the government to relocate encroachers and penalise the offenders. They suggest construction of bunds to make the lake out of bounds for humans to protect it from any human interference. Banning of human activity such as bathing and washing along the lake periphery is being advocated for.