As NITI Aayog Looks into Water Trading, it Should Know the High Costs it May Bring

In a society where access to water resources is already deeply unequal, introducing water trading could make matters worse.

India’s initiative to study the global benchmarks for water trading indicates that the NITI Aayog, as a national body of planning, has decided to continue with its neoliberalist stand and strengthen it further. Privatising water is not new for India; the National Water Policy of 2002 (Section 13) and 2012 (Sections 11.6 and 12. 3) too have proposed a private hand in water management and have emphasised public-private partnership. However, this time, the idea is new because now private companies will be the legitimate owners of water and water resources.

If this comes into effect, though it is a national resource, water will be sold like gold and silver. The NITI Aayog may propose strong legislation on the matter; it’s likely that all of its phrasing will attempt to keep hopes for egalitarian promises alive. However, for Indians who are constantly facing floods and drought, the proposed idea of water trading holds considerable doubts and challenges.

Since the idea is directly concerned with property rights, the foremost challenge is how the legitimisation of monopolisation and exploitation of water and water resources will be justified in prevailing constitutional settings. How will the principles of equality and rights over water as a property be defined for water markets? Once water becomes a commodity for trade, a disturbing question will be what can be a ‘comfortable’ price of water for the poor and middle classes.

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For a country like India, this idea also presents a challenge to equity. Instead of fighting for water for all, it encourages more water to the price payers. This further means that since the difference in purchasing power is different across society, the practice of water trading will sharpen the gap between the water-haves and water-have-nots. Such new water inequalities may lead to water clashes and war. The commodification of water disputes between different Indian states may take a neoliberalist shape in the most negative sense, where companies with an intention to make profits will use the upper riparian status of water-rich states and may deprive the lower riparian states from water. Looking at such a possibility, the NITI Aayog, while implementing the idea of water trading, must propose river management strategies. It has to plan for how water markets will address the existing water disputes and how the equilibrium will be maintained in the future.

The NITI Aayog, while studying the global benchmarks and looking at success stories (if they can be called that) of the US, Australia and Chile, has to realise that India’s water requirements and water situations are matchless. Uncertainty of rain, population density and diverse growth requirements makes India incomparable. Hence, before deciding on water trading, it is very is essential to check the water footprints and investigate the diversity of the nature of water uses in India.

Since Indian market systems are still growing, allowing water trade may prove a hurried step in the absence of the right understanding. Here, the UK can serve as an example for India; after having bitter experiences with water privatisation under Thatcherism, it has dropped the practice of water trading and instead municipalised water management processes. After constitutionalising the municipality and panchayats, it isn’t easy to understand why enough trust is not shown in them in India, especially regarding water management. The NITI Aayog has to justify the presence of water markets at the rural level, which it can certainly do in the name of efficiency.

Here, the argument, again, is the same: if water is scarce, how will trading water assure efficiency and make water accessible and affordable to all? To answer these questions, the members of the NITI Aayog have been encouraged to create public awareness. The question, however, here is about the price of water; who can convince different water users with different purchasing power? As part of people’s awareness, the NITI Aayog’s initiative of people’s participation will have no meaning if the same is limited to the significant water users. The present participation technique is the participation of high profile people, and so the decision-making process remains top-down.

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Since the NITI Aayog’s intention is to move towards water markets, it must think about rational, effective and corruption-free monitoring systems. The unavoidable question here is if the monitoring will be mechanised by the government bodies and, if this is the case, whether new water owners will agree to the processes. The NITI Aayog has to reflect on some tough questions that seek to ask how a national resource can be a resource for trade and how the government will control the multinational companies’ investment in water. MNCs’ involvement as water owners will be a clear threat to India’ water security. The NITI Aayog, before finalising plans on water trade, must make decisions on multiple questions. For instance, how will the water needs of the agriculture sector and small industries be met if trading actions will monopolise water resources?

As the purpose of trade is to increase private surplus value, the worry is how the government will control the exploitation of groundwater. The NITI Aayog cannot afford to avoid the fact that big farmers and industrialists can collect excess amounts of water by investing in water trading. To ensure more water, they can establish water plants in plain lands and extract groundwater excessively by using advanced technology, as Nestlé is currently doing.

Looking at these issues, it comes as a big surprise that the NITI Aayog is initiating water trading at a time when all Indian cities are witnessing water-divided societies. This divide is not merely regional but within the region as well, where a few can be easily observed as the water haves, and many can be seen as water have-nots, who are struggling for even a drop of safe drinking water. The figures that show water scarcity are not just numbers but the expressions of the struggles, pains and challenges of water have-nots. Trade can increase this pain. It is essential to consider that market ‘efficiency’ is not an assurance of justice. Since the private sector’s management practices are fundamentally based not just on profit but on surplus value, expecting a just price from them is unrealistic and utopian.

The challenge before the NITI Aayog is more significant as India, as a functional democracy, expects much more from this highest planning body. Before this body announces that India is ready for water-trading, it must seriously consider all these concerns.

Deepti Acharya is Senior Assistant Professor at the Department of Political Science, Maharaja Sayajirao University of Baroda.

Edited by Jahnavi Sen.