In India, industry is the second highest consumer of water. The main sources of water for the industrial sector are groundwater and surface water. Groundwater has emerged as an important source to meet the water requirements of industries. Choice of source of water depends on the availability of sufficient and regular supply of water and the cost of water from the source.
The State Government of Karnataka has decided to increase the water tariff for industrial use by 100%.
The hike is being opposed by different groups. The hike is being implemented from June. This has escalated the production cost of various industries like steel, manufacturing, power etc. Industrial water demand has been increasing with the pace of industrial development. The growth in some of the water intensive industries have been quite significant, putting further pressure on the industrial demand for water. The Karnataka Iron and Steel Association and also other manufacturers have appealed to the Government for an immediate roll back of the tariff. The Steel industry alone uses approximately 75 million cubic metres of water annually and the increase fee may lead to an increased burden of Rs.12 crores a month . For water intensive industries, the hike may lead to financial disaster.
According to a leading industrial body, the impact of increased tariff may lead to disrupted production and also loss of jobs of over 3000 across small and medium steel sector. The industry wants different rates for different type of water like treated and untreated water.
The proposal was put forth by the Krishna Bhagya Jala Nigam Ltd. (KBJNL), and accepted by the State Government. The cost per million cubic feet i.e., 28.31 million litres of water drawn from industrial purposes form reservoirs, canals, lakes and dams has been revised from Rs.3200 to Rs.3 lakh.
The sudden hike in the water tariff is not warranted. With this hike, industrial water in Karnataka has become one of the costliest in the country. The financial burden would be unmanageable in sectors like steel, iron and power as they operate on thin/less margins.