Panel Recommends Higher, Unified Cess on Water Use by Industry
Nitin Sethi
Times News Network
December 30, 2008

NEW DELHI: The water resources ministry has inched closer to imposing a higher and unified cess on the use of water by industry. A sub-group of the ministry has affirmed that a cess on industrial use of water is necessary. The group has also recommended that those using water as a raw material for their product, such as carbonated drink producers, should pay a substantially higher price as it forms a significant input to their product.

The group has noted that at present the central government has the powers to impose a uniform cess.

The existing operative legislation to impose such a cess is the Water (Prevention and Control of Pollution) Cess Act, 1977. But with water enshrined as a state subject in the Constitution, it is up to the state governments to adopt the central law if they so wish. At present, only a few states enforce the law.

There is a realisation in the ministry that the laws are too pre-dated to manage the new industries that use water extensively and even as their basic raw material. In 2006, new licences were given to 428 applicants by BIS to set up water bottling units.

The fast growing sector, with more than 1,800 existing licensed bottled water units across the country, pays a meagre 30 paise per 1,000 litres of water, at best, as cess.

The problem, the ministry's sub-group had earlier pointed out, got heightened because a far greater volume of water was extracted, polluted and wasted than used in the final product. Therefore, for each litre of water being produced as some product, several litres were lost, in most cases from the groundwater table.

The sub-group had earlier suggested a stronger fiscal regime to control and regulate such use. While the ministry would now seek legal opinion from the law ministry to impose such a cess, another way out that the group discussed to regulate water use by industry was to set standards.

The National Productivity Council has suggested setting up standards for all industries that consume water as raw material and then govern them through this route.

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