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Why a groundwater cess won't work

By Dr Sudhirendar Sharma

The proposed cess on groundwater extraction will only give big players such as the bottled water industry carte blanche to extract as much as they need. A water cess in the absence of blanket checks on over-extraction is not a good idea

That groundwater across the country has been extracted to exhaustion is not breaking news. However, news that a water cess is being considered to regulate the unscrupulous mining of groundwater not only breaks new ground, it's an indication that the country's planners have run out of ideas.

The announcement of a cess was made recently by Montek Singh Ahluwalia, deputy chairman, Planning Commission, at the 12th National Symposium on Hydrology on 'Groundwater Governance: Ownership of Groundwater and its Pricing', in New Delhi on November 14-15, 2006. The symposium was organised by the Central Groundwater Board and the National Institute of Hydrology, Roorkee.

Ahluwalia's contention that amending the 125-year-old Indian Easement Act, which provides absolute rights of the people to groundwater on their own land, would solve the problem of groundwater overuse and scarcity at best remains a dream. Further, an expert group has been set up in the Planning Commission to study various aspects of levying a cess on groundwater extraction. Although the terms of reference of the committee are not yet available, Ahluwalia made it clear that, in addition to studying various aspects related to levying a cess on groundwater, the committee would also examine the implications of bringing groundwater into the 'concurrent' list (it is presently in the 'state' list). A Comprehensive Groundwater Bill has been in circulation with the states for this purpose.

To be included in the Eleventh Plan approach paper, the expert group's recommendations will be available within the next two months. At the core is the continued exploitation of groundwater by a large number of well-owners engaged in groundwater irrigation. Of the 5,723 hydrological units in the country (hydrological units are different from wells; each unit has a number of wells falling into a designated hydrological unit), 839 units have been declared overexploited and are reaching danger-levels. In several parts of Punjab, Haryana, Rajasthan, Maharashtra, Andhra Pradesh and Karnataka, groundwater levels have dipped to below 300-400 metres and lower.

Curiously, the overall development of groundwater hasn't kept pace with its exploitation.

From an economic standpoint, raising revenue through a groundwater cess (read: commercial use) in order to invest in recharging groundwater may sound like a good idea. However, in no way does it guarantee a blanket check on groundwater over-extraction. Unless limits to groundwater extraction are defined, a soft drinks or mineral water company would be only too pleased to pay a cess to gain unrestricted access to groundwater. The state will no doubt prosper, but at the cost of unsuspecting consumers. And the commercial player will be the net gainer, ready to harvest replenished groundwater again and again!

That's only part of the story. Groundwater constitutes over 50% of all water used for irrigation; a sizeable portion of municipal water supply across urban India is groundwater-dependent; and farmers with small landholdings across the country prefer trading groundwater over non-remunerative farming. Whether or not these fall within the strict definition of 'commercial use' is open to interpretation.

Separating commercial from non-commercial use of groundwater is a matter of conjecture. Leaving it to the planners will open up a Pandora's box of undesired legal wrangles.

Unless legal pluralism, related to the complexity of water rights, is addressed, the problem of water misuse will stay unresolved. Understanding legally plural conditions may be the first step towards finding location-specific solutions to the existing problems of water scarcity, overexploitation and redistribution. The Planning Commission would be better advised to develop policies to make the water sector more efficient -- studies reveal that a 10% increase in efficiency in surface irrigation systems could significantly reduce the demand for groundwater. Introducing water-saving crops would further reduce demand. A set of diverse strategies for varied eco-zones is the order of the day.

That Ahluwalia is reiterating the World Bank's advice of a few years ago, to bring water under the concurrent list, doesn't come as any surprise. Bringing water under the concurrent list is what the apex lending institution and multinational companies desire; single-window negotiations are always preferred in most commercial transactions. A 9% growth rate target, and a 10-11% growth in industry in the next five years are seemingly reasons for centralising groundwater control. In other words, this could well be construed as another attempt at privatising water, albeit via the groundwater route.

A lot can be read into the proposal for groundwater regulation, the most surprising being recharging groundwater. If the report of the Parthasarthy Committee, constituted by the ministry of rural development, is any indication, the over Rs 17,037 crore spent upto March 2005 on surface water harvesting through watershed development has not done much to replenish groundwater. Could the mere collection of a groundwater cess do much more?

Viewing groundwater in isolation is a fallacy, as it is part of the hydrological cycle. Building strategies to help recharge groundwater must fit into the bigger picture of restoring the country's hydrological cycle. With surface water resources being highly polluted, expecting it to recharge groundwater would mean polluting what nature has bestowed on us as a 'fixed deposit' of sorts. Ironically, to meet our current requirements, not only have we destroyed our 'savings' (surface water), we have also squandered our 'fixed deposit'. Only someone obsessed with juggling growth rates can view groundwater as a resource that can be traded or bartered for financial gain.

InfoChange News & Features, December 2006