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© Confederation of Indian Industry Sectoral Allocation & Pricing of Groundwater V. Damle Confederation Of Indian Industry
Applicability of this paper Primary focus: Predominantly agricultural watersheds & aquifer commands, and rural watersheds & aquifer commands where industrialisation is spreading Hydrological systems of 7,500 to 15,000 ha scale Surface hydrology as well as hydrogeology Hydrological units may include MI Tanks & Smaller Medium Projects w.r.t. surface hydrology May include perennial GW availability areas © Confederation of Indian Industry
Proposed Allocation Policy © Confederation of Indian Industry
Basic water rights and allocations to farmers as basic service Rural food security and poverty alleviation can be addressed through water allocations as basic right Basic water right of 5,000 m 3 to a nuclear family of 5-6 members Trading within sector may be permitted This will allow diversity of livelihood choices while at the same time providing basic security This allocation roughly equivalent to 1 ha irrigated agriculture. Framers with more lands can invest in irrigation equipment to cover larger areas. Farmers with less land can take up water intensive cash crops. Landless can take up share cropping with their own water & therefore manage better share. © Confederation of Indian Industry
Allocation to environment This can promote plantations as a livelihood option and/or commercial enterprise Can address biomass requirements of fodder and fuel Can enable energy plantations for renewable energy Can enable protective plantations for industries This allocation may be made available to any existing water user in the hydrological unit This may be non tradable allocation Should be at lowest possible rate © Confederation of Indian Industry
Additional basic rights & allocations to farmers as economic service Will depend upon local conditions w.r.t. land & water availability, and Govt. policy to address poverty Trading within the sector as well as across sectors with industry should be permitted Should be at economic rates higher than that for basic service © Confederation of Indian Industry
Allocations to industry & commercial agriculture as commercial service This may be subject to Govt. policy for agricultural and industrial development for the region The agriculture in this category may be such that it enables d/s processing industries The water rates for both sectors may be more or less at par and consistent with the agricultural and industrial development policy for the region The policy decisions should be based on economic growth models w.r.t. various factors as follows – © Confederation of Indian Industry
Cont….. Factors for economic growth models Impetus to u/s and d/s economic activity (inputs supply and market linkage) Creation of income and employment opportunities for local communities Impetus to high quality essential services such as health, education, transport, information connectivity, etc. Impetus to services sector Additional requirements of water for domestic and other civic use and most importantly Revenues on water services Value addition per unit volume of water for the whole value chain Tax returns and revenues to local self governments and state and central governments. © Confederation of Indian Industry
continued Trading of commercial allocations should be based on enhancement of water use efficiency only, and not on the basis of unused allocation. This will prevent speculative investments in water allocation. However, due considerations should be given to the fact that industries will take some time to achieve full utilisation of allocations, and that there would be periodic ups and downs due to natural conditions like rainfall and economy related issues such as inflation, recession, etc. © Confederation of Indian Industry
Institutional mechanisms The regulatory authority The local Governance institutions The local management institutions Technical and training support institutions. © Confederation of Indian Industry
Sectoral water pricing © Confederation of Indian Industry
There is, therefore, a need to ensure that the water charges for various uses should be fixed in such a way that they cover at least the operation and maintenance charges of providing the service initially and a part of the capital costs subsequently. The subsidy on water rates to the disadvantaged and poorer sections of the society should be well targeted and transparent.....National Water Policy 2002 – w.r.t. financial and physical sustainability © Confederation of Indian Industry
Groundwater pricing for industry – Pricing factors Royalty – Is it tenable in view of the Easements Act 1882 Expert Group on Groundwater Management and Ownership (Planning Commission, 2007) - Government has regulatory powers so that one users pattern of use should not affect the rights of other users with respect to quality and quantity. However, the basic right to access groundwater is as per the Indian Easements Act, 1882 and tied to land ownership. Administrative costs – No. of agencies involved - CGWB / CGWA, Central and State Pollution Control Boards, State Water Resources Departments, District Administration, Municipalities, etc. Infrastructure for GW augmentation and recharge – may be treated on par with head works in surface water schemes w.r.t. NWP 2002 recommendations on recovery towards capital costs © Confederation of Indian Industry
continued O&M costs for water abstraction & distribution service – only where this service is being offered Wastewater treatment service – Only where this is ebing offered & utilised, mainly applicable to SMEs Waste water conveyance service Other considerations in water pricing Cross subsidisation – can bring in arbitrariness unless the rates for lower end use are based on recommendations of NWP 2002 © Confederation of Indian Industry
continued As deterrent to excessive use – again has potential for arbitrariness. Reasonable water use productivities may be fixed and use above that may be charged additionally as deterrent Opportunity cost – e.g. opportunity cost of 20,000 m 3 of water is say Rs. 2.5 /m 3 w.r.t. foregone use for sugarcane since same amount of water will generate an income of Rs. 50,000 per ha Important recommendation: Various components of pricing should go to the respective agency so that we can move towards management of ground water. © Confederation of Indian Industry
GW pricing for agriculture Before moving towards positive cost of GW for agriculture (i.e. above mentioned factors of pricing), it is first necessary to address some of the important policy handicaps, viz. energy pricing for agriculture. Energy pricing should reflect some or the other real costs of generation. If available energy is considered as a pool of energy resources classified in terms of costs of generation then this pool may consist of following energy resources – Old hydropower plants New hydropower plants Old thermal power plants New thermal power plants Nuclear power plants. © Confederation of Indian Industry
Continued Recommendations for energy pricing for agriculture Energy pricing for basic water service may correspond to the lowest cost energy in the pool, i.e. old hydropower plants. This will itself still be a subsidy shock. The energy pricing for the additional basic economic water service may correspond to the second or third lowest cost energy in the pool, i.e. new hydro power plants or old thermal power plants Energy pricing to environmental allocations may also be fixed in suitable term to provide a policy push Commercial water service to agriculture may be charged in fully commercial terms. © Confederation of Indian Industry
Concluding remarks The allocation and pricing policy suggested in this paper has potential to address priority issues such as poverty alleviation, environment rehabilitation, promotion of commercial agriculture and d/s value chain, and also sustainable promotion of industrialization so as to enable a balanced economic growth of the hydrological units, with the hope this will also bring in a services sector with good quality services and essential services such as health and education. © Confederation of Indian Industry
However, this can become possible only if there is a shift to management of GW resources. This requires assessment tools so as to quantify availability and requirements and for evolving strategies for plugging the gaps in needs and availability. © Confederation of Indian Industry
Assessment tools Example of an 8000+ ha basin in Maharashtra near Pune © Confederation of Indian Industry
Bhigwan Geology © Confederation of Indian Industry
Bhigwan – conceptual cross section of aquifers © Confederation of Indian Industry
Bhigwan – GW potential © Confederation of Indian Industry
Bhigwan Hydrogeology © Confederation of Indian Industry
Bhigwan – Geo reference hydrogeology © Confederation of Indian Industry
Bhigwan water use – canal irrigation © Confederation of Indian Industry
Bhigwan water use – Lift Irrigation © Confederation of Indian Industry
Bhigwan Water Use – Well irrigation © Confederation of Indian Industry
Bhigwan Irrigation © Confederation of Indian Industry Official irrigation not more than 20% of over 3900 ha area
END © Confederation of Indian Industry
Participatory crop demo trials © Confederation of Indian Industry
Results of crop demo trials © Confederation of Indian Industry
Difference in crop growth & luster © Confederation of Indian Industry
Difference at flowering stage © Confederation of Indian Industry
END © Confederation of Indian Industry
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