Water Charges for Industry Set to Rise
New Delhi: Industry may soon have to pay a lot more for the water
it uses. The Union government is in talks with various state governments
to draft a model Bill that would lead to a multi-fold increase in
water charges for industry, senior government officials told Business
Since water is a state subject, the Union government cannot legislate
on it and state governments would have to draw up their own laws.
The move will impact industries that use large amounts of water, particularly
the beverages industry.
As of now, different states have different charges for water. These
charges are typically higher than what is charged for agricultural
use. This gap is now proposed to be widened with the new legislation.
“Water pricing for both agriculture and industry is peanuts,” says
the National Programme Coordinator (Land and Water) of the Food and
Agriculture Organisation, P Somasekhar Rao.
A 2007 study by the Asian Development Bank showed that the average
water rates in India are low. The average rates for all customers,
including industrial, commercial and public customers, is Rs 4.90
per cubic metre and the average residential rates is even lower.
The ministry for water resources has already formulated some draft
guidelines and circulated to states for their consideration.
While the extent of the hike is not immediately known, the beverages
industry — which relies on both surface and ground water as its main
resource — has already appealed to the government against such a move.
The industry claims to work on razor thin margins and would be forced
to increase the price of drinks if water charges rise, officials informed.
It is learnt that most other industries are not averse to paying higher
charges, as water is only a small component of their expenses.
In the past, the beverages industry has been accused of over-exploiting
ground water resources while paying minimal charges for it. Recently,
a committee of the Kerala Assembly recommended imposition of curbs
on extraction of water by PepsiCo at Pudussery in Palakkad district,
following allegations of exploitation of groundwater.
As drinking water shortages increase in large parts of the country,
even communities are willing to pay for the scarce resource. In Gujarat,
for instance, the Water and Sanitation Management Organisation (WASMO)
a non-government organisation sponsored by the government, works at
providing drinking water to rural areas.
“The community contributes 10 per cent of the total cost of supply
in their area, while the government puts in the rest,” says Atul Pandya,
programme director for Centre for Environment Education, partnering
in water supply for over 100 villages in the area.
A recent report, tabled in the Kerala Assembly, said that a plant
of the multinational cola giant, Pepsi, spread over 53 acres in Palakkad
district, was using nearly 48.5 per cent of the ground water. The
committee said industrial units using groundwater as the main raw
material should be generally discouraged. A high-level panel is finalising
its report on “socio-economic” damage allegedly caused by the Coca
Cola plant at Plachimada, also in Palakkad district, which has been
declared a drought-hit area.
Beverages companies in their representation to the government against
a steep price hike have pleaded they were replenishing the water resources
that they were using and not causing pollution.
A PepsiCo India spokesperson declined to comment on the issue.
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