what kind of water must be used for the industrial purposes and Why?

Answer 1

In general they use the water from the water mains because it is convenient. That water is filtered and treated to kill germs and to eliminate chemical impurities. That is a shame but it is the price of convenience.

Plants that need a lot of water for cooling (like power plants) will often get a permit to pump water directly from a river and return the slightly warmed water into the same river. Permit specifies how much temperature rise is allowed. It is non-potable but cheaper.

Sewage treatment plants will separate the sewage solids from their sludge. That leaves them with stinky but usable effluent water that serves their purposes as plant water. When they need to dilute or wash-down anything they can use that (basically-free) non-potable water without occuring any other costs.

Answer 2

In industrial, they use soft water in order to avoid the deposition of boiler scales which decrease heat transfer, since boiler scales are effective heat insulators, and to avoid explosion of boilers which may be due to the accumulation of boiler scales