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Sectoral Working Paper

Policy Framework for 8ustainable Water


Use and Management in ndian ndustry




Contents

Chapter Topic

Page No
Preface i
List of Tables & figures ii
I Introduction to Water Use and Management
in Indian Industry

Background 1
The water cycle 1
Industry water use and management 3
II Issues in Industry Water Use and
Management

The emerging water crisis 6
The Issue of Water Supply 7
The Issue of Water Quality 8
Approaches to Industrial Water
Conservation and Management
11
Technological approach 12
Socio-economic approach 13
Policy approach 15
Pointers to a sustainable water
management policy
17
Case examples 20-27
III Conclusion 28
Introduction 28
Policy model for sustainable water use and
management in industry
29
The key elements of the policy 30
References 34





Confederation of ndian ndustry
Environment Management Division, December 2003
i

Preface


This paper discusses the status and options for sustainable water use and management
policy in Indian industry. The paper is divided into three chapters.

Chapter 1: Introduction to Water Use and Management in Indian Industry

Provides a background to the status of water use in industry in India and in the world.

Chapter 2: Issues in Industry Water Use and Management

This chapter discusses the issues confronting water use in Indian industry namely the
issue of water quantity (supply) and quality. The various approaches adopted in the
Indian context are also discussed from the viewpoint of technological, socio-economic
and policy perspectives.

The chapter ends with a discussion on plausible inputs to be included in any proposed
water management policy.

Chapter 3: Conclusion

The framework of a proposed policy framework for sustainable water management in
industry is described.

The paper cites analysis and data from various sources. The cited references are
numbered and appear in the text as square brackets in bold e.g. [1] refers to the
reference number 1 on the references page at the end of the paper.

Note

1. Grey Boxes: In the first two chapters, the salient points emerging from the
discussion, which can be used in a plausible policy framework proposed in
chapter three, have been separately highlighted in grey shaded boxes.

2. The cited references have been reproduced to exemplify the various
perspectives to the discussion. The Confederation of Indian Industry does not
subscribe to the views expressed by these sources and to any interpretation
based on these sources.



ii
List of Tables & figures

Page no
Tables
Table 1: Various applications of water in industry 3
Table 2: Industrial water use by industry sector 4
Table 3: Comparison of specific water consumption in major water
consuming industry sectors
5
Table 4: Projected water demand (in bcm)

6
Table 5: Industry sectors contribution to overall water pollution 9
Table 6: Water cess rates 15
Table 7: Water cess costs as percentage of power generation cost 16

Figures
Figure 1: Hierarchy of water management in industry 29
Figure 2: Policy Framework for Sustainable Water Management in
Industry
32

Chapter 1: Introduction to Water Use and Management in Indian industry
1
Chapter 1: Introduction to Water Use and Management in Indian Industry

The ability to see, hear and speak are useless in the absence of adequate water. Water
is the basis of life. Most life forms are born in water and live in it. O water stream come
near me. You are the elixir of immortality.
Artharvaved, 3:13:6

Background

Water is a prime natural resource, a basic human need and a precious asset, in the
absence of which no socio-economic developmental activities can sustain. On a global
scale, there is no shortage of water, since more than 70 % of our planet is covered with
water. Of some 1386 million km
3
of water on earth, just 2.5 % is freshwater, the
remaining being salty seawater. Even from the total freshwater reserves on earth, only
0.26% (93,000 km
3
) is accessible by terrestrial life forms (humans, animals, vegetation,
lower organisms) [1]. The accessibility largely depends on the vagaries of the water
cycle.

The Water Cycle

The water on earth is not static but participates in a cycle maintained by solar energy
and the rotation of the earth. Surface water is evaporated from the earth by the energy of
the sun. The water vapour forms clouds in the sky. Depending on the temperature and
the weather conditions, the water vapour condenses and falls to the earth as
precipitation. Some precipitation runs from high areas to low areas on the earths
surface, in the form of rivers or streams, feeding the oceans or lakes to complete the
cycle.

The amount of renewable water available for terrestrial activities depends on the
precipitation (119000 km
3
) on land. Over two-thirds of the precipitation eventually
evaporates, while the rest (47,000 km
3
) enters the groundwater stocks, rivers and lakes.
Most of this precipitation falls in areas of low habitation and hence flows back into the
oceans. Hence, from the available 47,000 km
3
, mankind can use only 9000 km
3
[1].
However, this fresh water is unequally divided geographically, as well as over time.
Chapter 1: Introduction to Water Use and Management in Indian industry
2

India is a classic example of this dependence on the vagaries of the water cycle. India
receives an annual precipitation (snowfall and rain) of around 4000 bcm
1
. Of this, the
run-off accessible water- is 1,869 bcm, of which barely 690 bcm is used. Nearly 1,179
bcm of the water drains into the sea, much of it in the 100 days that define Indias wet
season. Indias water problems stem from the geographically disparate
precipitation and the fact that while nearly 70% of precipitation occurs in 100 days,
the requirement is spread over 365 days [2].

Further, if the utilizable water resource is defined as the quantum of withdrawal of water
from its natural place of occurrence. The Ministry of Water Resources, Government of
India (1999) assessed the utilizable annual flow as 690 bcm and the utilizable
groundwater resources at 396 bcm. It is from this utilizable flow that the water demand
has to be met.

The water demand is usually sub-divided into domestic, industrial and agricultural
demand. Worldwide, agriculture demand is the highest, followed by industry and
domestic demand. For India the break up of fresh water use is, agriculture 90%, industry
6% and domestic users 4% of the countrys freshwater [2]. Of the 150 bcm of
groundwater tapped every year in India, 89% is used by agriculture, 9% for drinking
water and 2 % by industry. This water demand is projected to increase nearly 1.7 times
by 2047 (Table 4, page 6). Clearly strategies and means of augmenting the water
resources are required.

Emergent policy direction

Augment and harness the utilizable water resources






1
1 bcm = 1 billion m
3
= 10
9
m
3
= 1 km
3


Chapter 1: Introduction to Water Use and Management in Indian industry
3
Industry Water Use & Management

Over the past century, there have been three major drivers to the enormous expansion
of water-resources infrastructure:

Population growth
Industrial development and
Expansion of irrigated agriculture

Water because of its versatile physico-chemical properties, fulfils many different
functions, such as:

Essential reactant for organisms
Environment for aquatic organisms
Drinking water for animals and human beings
Utility in household and industry and
Power supply (steam and water power, coolant)

For industry, water is an attractive substance because of its physico-chemical properties,
its relatively low price and its abundant availability in most parts of the world, finding
uses, such as those listed in Table 1.

Table 1: Various applications of water in industry

Funct|on of process water Examp|es

Producl, reaclarl

Producl|or ol oeverages, rydro|ys|s
3o|verl, aosorpl|or 0as-scruoo|rg, p|c|||rg
wasr|rg, adsorpl|or Texl||e l|r|sr|rg
Erergy ard lrarsporl Coo||rg, slear c|rcu|ls, so||d Wasles, sugar
care
wasr|rg & r|rs|rg Equ|prerl c|ear|rg, rouse|eep|rg

Chapter 1: Introduction to Water Use and Management in Indian industry
4
Especially for washing, cooling and rinsing purposes, industry uses relatively large
quantities of water. Table 2 depicts the relative consumption of freshwater by industrial
sectors in India. As can be observed, cooling accounts for some 90% of the total
industrial water consumption.

According to the Central Pollution Control Board (CPCB), in 2001, Indian industry
consumed 40 bcm of water and discharged 30.31 bcm of wastewater. Hence, about 75
% of the water used in major water-consuming industries is ultimately discharged as
wastewater.

Table 2: Industrial water use by industry sector
Source: Down to Earth, June 15, 2003, Centre for Science and Environment, India

8ectors water 6onsumed
H||||on ||tres per day
7 6onsumed
Trerra| PoWer P|arls 82,191 8Z.8Z
Erg|reer|rg 1Z22 5.05
Pu|p ard paper 2118 2.2
Texl||es (collor) 1910 2.0Z
lror ard slee| 1208 1.29
3ugar 509 0.51
Ferl|||sers 15 0.19
0|sl|||er|es 1Z2 0.18
0rgar|c Crer|ca|s 111 0.12
0lrers 111 0.12


After use in a process, water generally contains components which deteriorate its quality
in such a way that the water cannot be re-used in the process without treatment,
because it would lead to negative effects on product quality or production cost.




Chapter 1: Introduction to Water Use and Management in Indian industry
5
Table 3: Comparison of specific water consumption in major water consuming industry
sectors
Source: Down to Earth, June 15, 2003, Centre for Science and Environment

8ector Average water consumpt|on C|oba| benchmark
Trerra| poWer p|arl 80 r
3
/ Vwr e|eclr|c|ly < 10 r
3
/ Vwr e|eclr|c|ly
Texl||es 200-250 r
3
/ lorre collor < 100 r
3
/ lorre collor
Pu|p ard paper
wood oased r|||s 150-200 r
3
/ lorre 50-Z5 r
3
/ lorre
wasle paper oased r||s Z5- 100 r
3
/ lorre 1-25 r
3
/ lorre
lrlegraled |ror ard slee|
p|arl
20-25 r
3
/ lorre ol l|r|sred
producl
5 r
3
/ lorre ol l|r|sred producl

In industry, the main water pollution occurs by extensive conditioning and cleaning
activities and in processes, where water is in direct contact with water-soluble
components. For these reasons, in many cases, water is used only once, and then
requires some degree of treatment before it can be discharged either to a municipal
sewer or to the receiving water (which because of poor enforcement, is generally
compromised upon). Hence, when compared to global benchmarks (Table 3), the
specific water consumption in Indian industry is very high. Thus, disposal of
wastewater can represent a major industrial process cost. The availability of reclaimed
water can foster more efficient water use practices that translate into significant cost
savings for many industries.

Emergent policy direction
Strengthening mechanism for enforcement of effluent disposal norms
Provide incentives to industry to reduce specific water consumption. This could
be in the form of economic concessions on adopting cleaner production, rewards
like reduced water cess on reducing by a certain specific water consumption

Chapter 2: Issues in Industry Water Use and Management
6
Chapter 2: Issues in Industry Water Use and Management

Optimal sustainable development, maintenance of quality and efficient use of countrys water
resources to match the growing demands on this precious natural resource with active
involvement of all stakeholders in order to achieve accelerated, equitable economic
development of the country.

Vision for the 21
st
Century
Ministry of Water Resources, Government of India
The Emerging Water Crisis

In chapter one, we have discussed the status of water as an important factor of production in
industrial processes, like energy and labour. The water demand depends on, what is being
produced and the efficiency with which it is produced.

The gross domestic product (GDP, sum of value added from the primary, secondary and
tertiary sectors) is one of the key indicators for understanding a countrys resource
requirements and sources of pollution. One of these key resources is water. For example for
India, the GDP growth for 2003-04 has been 8.1 %. Industry accounts for about a quarter of
the GDP. Bountiful monsoon rains in 2003 have caused a dramatic recovery in farm
production and the bumper harvest in turn has boosted the demand for industrial goods and
aided industrial output growth (Central Statistical Organization, April 2004). These facts
clearly establish the inter-/ intra-sectoral links in-between water availability and industrial
growth. Table 4 details out the projected water demand in industry and other sectors.

Table 4: Projected water demand (in bcm)
(Source: Green India 2047- DISHA, pp 23, The Energy and Resource Institute, 2000)

Year 0omest|c Agr|cu|ture |ndustry Power generat|on Tota|
1997 23.516 540.996 1.604 0.875 564.908
2019 35.534 780.553 3.792 2.790 819.741
2047 50.488 988.445 7.152 9.019 1048.986
1997-2047 1.5% 1.2% 3.0% 4.8% 1.2%

Assuming a modest 5 percent overall GDP growth scenario, pegging industrial growth at 5.9
percent and assuming that water consumption would remain constant, the industrial water
demand including that for power generation is expected to increase by 13.6 bcm within the
Chapter 2: Issues in Industry Water Use and Management
7
next 40 years [Table 4]. It is worth noting that the industry water demand by then would
quadruple and that by the power sector by a factor of ten. Such growth trends in water
consumption are likely to have significant cost implications for industry.

At present water for industry use is available at less than Rs 1 per kilolitre, which is almost
free, (Table 6, page 15) however with rising shortages industry will soon be forced to
acquire water from alternate sources at prices- upto 10 times the current levels-that reflect
the shortage situations. Such trends have already been witnessed, companies in Gujarat
and Tamil Nadu are already paying third parties Rs 10-30 / kL for process water. These
costs may prove to be an albatross for industry competitiveness. For example, the future
growth of the textile cluster of Tirupur in Tamil Nadu hinges on the water price. After
procuring water at an average price of Rs 30 / kL, the industry incurs a huge expense
treating the water. The final cost comes to Rs 70-80 per kL of water.

Even instances of production being disrupted due to water shortage exist. In 1996, water
shortage forced Grasimss viscous staple fibre plant in Nagda (Madhya Pradesh) to remain
shut for 46 days, causing a 17 % drop in net profit (Source: Business World, 7 June 1997).
Madras Fertilizers had to stop production for eight months between 1992-1994 due to water
shortage. Several other examples can be cited of production stopping or slowing down due
to inadequacy of water. It is quite clear that any disruption in water supply either in
quantity or quality or both would impede further industrial development.

Emergent policy direction
Mechanism required for appropriate pricing of water for industry

The Issue of Water Supply

Today water shortages are becoming more frequent and widespread and industry (as well
as society) is beginning to pay the price for the relentless exploitation of water resource, and
the cost (including that of inaction!) is mounting steeply. The degree of water stress in India
can be gauged from the fact that the real reason for some thermal power plants having low
plant load factor is not due to breakdown or inferior coal quality but due to non-availability of
water.

To put the situation in perspective, from a high of 5277 cubic metres in 1955, estimates of
the annual per capita availability of renewable fresh water by the Central Water Commission
project a decline from a current level of 2499 cubic metres to 1520 cubic metres by 2047.
Chapter 2: Issues in Industry Water Use and Management
8
The per capita water availability below 1700 cubic metres is labeled as a water stress
situation, that below 1000 cubic metres as one of water scarcity and that below 500 cubic
metres as absolute scarcity. India is projected to be heading towards an overall water
stress situation by 2050.

Moreover, the Ganga plain belt, Gujarat, Maharashtra, West Bengal and the Deccan
plateau, as of today water stressed areas would plunge to areas of water scarcity (< 1000
cubic metres) by 2047. These water scarce regions are the hubs of industry in India.
This shall also take its toll on economic development. A recent study (Investment Climate in
India, 2003) by the Confederation of Indian Industry and the World Bank has found that
scarcity of water in Tamil Nadu is proving to be a major infrastructure bottleneck and a
hurdle for investments in the state.

The news from the other sectors is equally grim. For example, in the case of agriculture,
India already has more irrigated land than any other country, including China and more
groundwater irrigation than all the rest of the world, 80 million hectares irrigated land, out of
which 40 million is from groundwater [3].

It does not help that the National Water Policy, 2002, places industry at the bottom of its
water allocation priorities while planning and operation of systems. The competing sequence
of priorities being: drinking water, irrigation, hydro-power, ecology, agro-industries and non-
agricultural industries, and Navigation and other uses.

The Issue of Water Quality

Postindependent India embarked on an ambitious pace of industrialization. Between 1963
and 1991, industrial output in India quadrupled, growing on an average by about 5.5%
annually. Environmental pollution also rose steadily and often faster than industrial growth
e.g. release of toxic pollutants during the same period grew six-fold, at approximately 7%
annually [3].

Most of the water intensive industries often form clusters because, generally, few locations
meet the criteria for siting such industries. The choice of a location is restricted by availability
of one or more key resources e.g. ore, water etc. However, from the industry perspective,
such clustering sows the seeds of potential water stress situations, as with time, competing
demands from agriculture and domestic sectors find precedence over industry demand, as
also stated in the National Water Policy, 2002.
Chapter 2: Issues in Industry Water Use and Management
9

The problem with regard to water is not only related to its availability, but also in
terms of its quality. Most of the intensive water-use industries viz. Textiles, fertilizers, steel,
chemicals, food products etc contribute substantially to the countrys GDP. Infact a study for
China revealed that industry generates more than 60 times value, as compared to
agriculture for the same quantity of water use (Source: The World Bank).

However, at the same time contribution of these sectors to pollution and intensive resource/
depletion is often disproportionate to their industrial output e.g. industrial chemicals, food
products and paper and pulp together account for just about 25 % of the industrial output,
but are responsible for as much as 85% of the water pollution load (Table 5).

For instance, Sanganer in Rajasthan famous for its hand block printed fabrics, now finds
itself in an ecological crisis of its own making. The direct discharge of effluent generated
from the dyeing process to the towns main irrigation source over the last three decades has
polluted the ground water and is suspected to be the cause behind increasing serious health
afflictions. This is a common scenario in the case of small and medium enterprises (SMEs).
The state of affairs is also reflected by the number of factories who have taken measures for
water pollution abatement, at just 13.09 per cent [4].

Table 5: Industry sectors contribution to overall water pollution
(Source: Parivesh Newsletter, Central Pollution Control Board)

NDU8TRY % 8HARE
WATER POLLUTON
Industrial chemicals 29
Non-ferrous metals 10
Other chemicals 1
Food products 38
Paper and pulp products 19
Petroleum refineries 2
Textiles 1
Total 100

Structural shifts at the global level and the opening-up of the Indian economy post-1991, has
brought marked redeployment of water intensive industries such as textiles, leather, iron
Chapter 2: Issues in Industry Water Use and Management
10
and steel, industrial chemicals and petrochemicals from the developed countries to the
developing nations, like India.

Indian industry has responded to such developments and in the next section, we shall
discuss the measures adopted by industry for water conservation and management.
However, with the future portending a grim situation, the challenge before policy planners is
to step ahead of the looming crisis by providing a policy environment to industry (and other
sectors) to employ more efficient water management approaches.

Emergent policy direction
Guidelines for siting new industry should take into account the water stress potential of the
site. For such hydro-hot spots special guidelines be issued

Chapter 2: Issues in Industry Water Use and Management
11
Approaches to Industrial Water Conservation and Management

Indian industry is already hard pressed to meet the water requirements and the writing on
the wall is quite clear, sooner than later government and industry would have to initiate
enforcement of water use discipline (efficiency), just like fiscal discipline.

The shape of policy instruments to enable such water efficiency should incorporate
learnings from the experiences and studies in judicious water management by industry.
Inspite of the absence of government policies, major efforts to improve water efficiency
are taking shape based on industry-based initiatives. An ever-growing number of
businesses are implementing projects because of the benefits of assuring water supply and
reducing clean-up costs.

Here, technological innovation will play an important role. Where water is plentiful and
inexpensive, there may be virtually no incentives for water efficient technology. However, to
reduce demands for new water supplies, high water productivity remains an important goal.
For example, Industrial output in Japan has steadily risen since 1970s, while total industrial
water use has dropped more than 25%. In 1965, Japan used nearly 48,000 cum water to
produce a million dollars of output, by 1989; this had dropped to 13000 cum per million
dollars of output (in real terms)- a tripling of industrial water productivity [5].

Similar trends have been reported from California, USA. In 1979, it took an average of
13, 500 cum of water to produce a million dollars of industrial output, by 1990 this figure had
dropped to under 7,400 cum. Similar trends are also beginning to manifest in Indian industry.
For example, specific water consumption (m
3
/ ton steel) in Tata Steel has witnessed a
marked decline, from 10.93 in 1999 to 7.31 in 2003, after adopting extensive recycling of
treated wastewater and water augmenting by rainwater harvesting (Source: Environmental
Performance Report, Tata Steel - Jamshedpur, 2003).

The approaches adopted for water use efficiency in industry can broadly be
categorized into three levels, technological, socio-economic and policy. In what
follows, is a review of these three enabling approaches, illustrating case examples of the
best practices within Indian industry. The detailed case examples are reproduced separately
at the end of this chapter 2.

The intent of the discussion is not to describe the specific techniques adopted by industry
but to analyze the approaches being adopted for arriving at a solution to the industrys water
Chapter 2: Issues in Industry Water Use and Management
12
problem. These emergent approaches (in grey boxes) would help in suggesting inputs for a
policy framework for sustainable water use and management in industry.

Technological approach

Technological approach refers to the methods adopted by industry to achieve the desired
degree of contaminant removal or destruction, the operability of each process, and
appropriate application of process controls. So far, water management in Indian industry has
revolved around two basic aspects:

Raw water treatment to meet end-use requirements and
Effluent treatment for meeting discharge standards

To successfully confront the challenges of water quality and quantity, Indian industry will
have to aim at zero freshwater demand and zero effluent discharge. Noteworthy
examples of such innovation do exist: the Chennai Petroleum Company Ltd, for instance,
treats municipal sewage to meet its process water requirements and is on its way to close its
water cycle. As another example, the thermal power plant of Indian Aluminum Company,
Limited (INDAL), Hirakud, Orissa has optimized cooling tower operation and is utilizing the
blowdown for coal and ash pond spraying and is virtually operating under zero discharge.

On analysis of the case examples reproduced separately at the end of this chapter, one can
summarize that industry generally employs one or more of the following methods for water
management:

Improvements in process technology; by adding water-efficient technologies
Recycling, reuse and renovation
2
of process water
Re-circulation of water; for indefinite use of non-consumption water like cooling water
and steam condensate for the same purpose after treatment
Rainwater harvesting; collecting water within the plants rainwater endowment, for low
water-consuming industries, it could meet their entire requirements


2
Note:
Recycling: refers to the use of treated wastewater
Reuse: refers to the use of wastewater with no or little treatment
Renovation: treatment to the tertiary level so that it is fit for use like fresh water
Chapter 2: Issues in Industry Water Use and Management
13
It must also be highlighted that from the viewpoint of a business; core to the adoption of
water management in the cited examples is the instinct for economic efficiency and business
continuity.

Emergent policy direction
Enable assured water supply for business continuity
Mechanism for Information & access to water clean technologies especially for SMEs

Socio-economic approach

Socio-economic approaches refer to involving the stakeholders like employees; immediate
community etc in developing strategies toward minimizing the investment costs, operating
and maintenance costs, enhancing water savings and any associated savings in energy, raw
materials (e.g. in paper industry fiber is recovered). For example, in 1996 severe water
shortage forced Grasimss viscous staple fibre plant in Nagda (Madhya Pradesh) to remain
shut for 46 days, causing a 17 % drop in net profit. Through interaction with their
stakeholders the company developed and implemented water management initiatives in the
plant (see case study for details). During similar situations subsequently the plant remained
in operation, avoiding loss on turnover to the tune of Rs 200 crores per annum, without
considering the multiplier effect from downstream industries and social impact on the local
community.

In the case of Kitply Industries limited, the largest and most reputed name in Indian wood
based industry sector, they developed wasteland in Chattisgarh state, by planting trees.
Especial emphasis was given to address various socio-economic problems of people in
project area, who were mostly landless, marginal farmers and such other traditionally
economically backward communities. This also resulted in improvement and stabilization of
ground water regime especially during summers.

In a majority of industries, such efforts have by and large been voluntary initiatives, often
implemented under the aegis of an environmental management system such as ISO 14001.
Not only did this aid in sustaining employee morale within the industry, but also helped in
strengthening community ties. In Gujarat Ambuja, for example, water resource
development programme has been undertaken to improve the ground water table and to
control and prevent salinity by construction and repair of check dams and percolation-cum-
storage tanks. Approximately 600 wells have also been recharged to improve the ground
Chapter 2: Issues in Industry Water Use and Management
14
water table (see case study for details). This led to the improvement of the social
environment directed towards enhancing the quality of life of local community like, guiding
farmers on modern farming techniques, supporting integrated programmes for the
development of natural watersheds. This participatory approach with stakeholders is
yielding sustained benefits to the plant.

An analysis of the case examples reveal that a participatory management strategy not only
yields direct financial benefits but also benefits like publicity as a environmentally conscious
company, boost involvement of employees, instill pride in their company translating into their
loyalty resulting in low turnovers. In short a participatory approach heightens the survival
prospects of the companies even under strong competitive forces.

This fact is also borne out by the Kalundborg experience of industrial symbiosis in Denmark
[1]. Industrial symbiosis is based on the idea that one companys waste products are
another companys raw material. Water and wastewater also are exchanged, reducing the
fresh water demand. This successful industrial symbiosis over the last 40 years,
demonstrates that environmental concern and business can go hand in hand.

Emergent policy direction
Encourage voluntary initiatives like ISO 14001
Develop mechanism for participatory approach with stakeholders
Chapter 2: Issues in Industry Water Use and Management
15
Policy Approach

In the Indian context, industry is essentially governed by the water cess act of 1977. This act
requires designated industries and local governments such as municipalities to pay a cess
(tax) on water consumption [Table 6].

Table 6: Water cess rates
(Source: Water (Prevention and Control of Pollution) Cess (Amendment) Act, 2003, Ministry of Environment and
Forests)

Water consumed for Rates*
Paise / kilolitre
Industrial cooling, spraying in mine pits or feeding
boilers
10
Domestic purposes 3
Processing
1
20
Processing
2
30

Note: * as per sub-section (2A) of section 3
1. Whereby water gets polluted and the pollutants are: (i) easily bio-degradable; or (ii) non-toxic; or (iii)
both non-toxic and easily bio-degradable
2. Whereby water gets polluted and the pollutants are: (i) not easily bio-degradable; or (ii) toxic; or (iii) both
toxic and not easily bio-degradable

The water cess combines features of both a user charge and an effective fee, while
providing a stream of revenue to the State Pollution Control Boards (SPCBs). However the
implementation experience has been rather mixed. A report by the Asian Development Bank
(ADB) in 2001 [6] cited the following reasons for this:

In its design and intent the cess is not a pollution charge/ effluent fee as it is not
derived on effluent discharge per se and is motivated by revenue considerations
(therefore it cannot be argued that the Cess was really intent to control water
pollution).

The cess does distinguish between different uses of water, with a higher rate being
charged for uses that make the water more dirty and/ or more toxic (i.e. use as a
surrogate pollution charge).
Chapter 2: Issues in Industry Water Use and Management
16
At the same time, since the rate of cess is low (a maximum of 30 paise/ kL), it has
not had a significant impact on limiting the use of fresh water. Moreover, a true user
charge for water should be on all uses of water and not for designated industries
only.

For instance, though power generation forms nearly 90 % of industrial water demand, the
cooling water cess of thermal power stations, constitutes just 0.265 per cent of their total
power generation costs (Table 7). Hence, the cess acts introduction of such low costs
actively inhibits hopes of any water conservation.

Table 7: Water cess costs as percentage of power generation cost
(Source: Down to earth, June 15, 2003, Centre for Science and Environment)

Total power produced by thermal power
plants (million kwh)
372322.00
Cost of power generation (Rs / kwh) 3.27
Total cost of generation (Rs / crore) 121860.99
Cooling water cess as percentage of power
generation cost
0.20
Total water cess as percentage of power
generation cost
0.265

In view of these observations, the ADB report emphasized the desirability of de-linking the
pollution control objectives of the water cess from its revenue raising and user charge
objectives. The report suggested that apart from identifying additional sources of revenue for
the SPCBs, a mechanism for internalizing the cost of water and cost of pollution be
evolved.

Emergent policy direction
Appropriate water pricing mechanism should internalize water cost and the pollution
cost

From the perspective of conserving water use by industrial units, the supply price of water is
key, as the higher the price of water; the higher will be the incentive to practice water
conservation. A policy solution matching the two requirements shall be an optimal approach.
A study on Full cost pricing of water: Options and Impacts by Ritu Kumar et al (2000) [8],
Chapter 2: Issues in Industry Water Use and Management
17
explored the impacts of full cost pricing on freshwater demand, recycling and conservation
for Tata Steel, Jamshedpur. Full cost is defined as the price of water at which wastewater
discharges are reduced to zero, thereby eliminating possible environmental damage to
downstream users. The cost includes financial costs, current opportunity costs and the
environmental cost. The study recognized that water has been treated as a free good, rather
than as an economic good. From a policy perspective the Tata Steel study concluded the
following premises:

The choice of economic instrument be revenue neutral. Revenue neutrality is essential
to industrial competitiveness, and any revenue collected through charges be ploughed
back to assist recycling and reuse of water
Stakeholder dialogue on reform measures is essential to ensure implementation and
avoid conflict
A management plan for regional water resources based on conflict resolution needs to
be developed on a rigorous technical and economic analysis

These three points thus should form an essential part of any future water policy instrument.

Emergent policy direction
Management plan for regional water resources should have a mechanism for conflict
resolution amongst water use stakeholders

Pointers to a Sustainable Water Management Policy

As has been highlighted in our discussion on technological, socio-economic and policy
approaches, major efforts are taking shape based on industry-based initiatives to improve
water efficiency. To mitigate the risk of water scarcity, businesses are implementing projects
for assuring water supply.

From the viewpoint of a business, core to these case examples is the instinct for economic
efficiency and business continuity. Industrial water management must contribute to these
goals. The case examples cited demonstrate that participatory water management could
directly result in a forty to seventy percent reduction in industrial water consumption along
with other concomitant socio-economic benefits.

Chapter 2: Issues in Industry Water Use and Management
18
However at the policy level substantial work remains to be done. The wastes discharged by
firms into water (surface and ground) generate a negative externality. At present, there is no
viable mechanism to make the firms internalize these costs. The ADB report in 2001 [6]
analyzed the systemic causes for this to be the:

Precarious financial resources of State Pollution Control Boards (SPCBs)
Excessive emphasis on
End-of-pipe treatment
Concentration based standards
Attainment of source-specific standards rather than ambient water quality

While some recent Supreme Court judgements have involved the polluter-pays-principle
(PPP), this is an ex-post principle and does not allow for the fact that some amount of
pollution is perhaps optimal. This is because all economic activity has some associated
environmental emission. Such judicial judgements place emphasis on end-of-pipe treatment
putting industry under severe financial strain and sometime s even closure. For example, the
Supreme Court judgement on tanneries in Kanpur, Uttar Pradesh forced the closure of many
tannery units.

Efforts by industry to minimize pollution are also hampered by [6]:

Limited access to new (and cleaner) technology by firms because of import
restrictions
Persistence of polluting, sunset industries due to lack of an exit policy (which allows
firms to close and lay off workers)
Incentives to (over) use polluting inputs such as subsidized energy (e.g. supply of
power in agriculture to run water pumps).

It may be worthwhile at this juncture to comment on the plethora of schemes for pollution
abatement/ prevention such as financial assistance for setting up common effluent treatment
plants (CETPs), promotion of clean technology, etc. The main problem is the lack of an
incentive mechanism to induce firms to take advantage of these schemes. In other words, as
long as the cost of these schemes to firms is nonzero (no matter how small), there is no
reason for them to voluntarily participate in them unless there is a risk of non-compliance. At
present, firms show interest in schemes such as CETPs only when there has been strict
Chapter 2: Issues in Industry Water Use and Management
19
intervention by the judiciary, as is the case with the CETP set up in the industrial estate of
Vatva, near Ahemdabad.

Similarly with respect to incentives for the adoption of cleaner technologies (targeted
primarily at small-scale industries or SSIs), unless there are enforcement or economic
incentives, the vast majority of SSIs will not use these schemes. An argument often made by
those in favour of these schemes, that, pollution prevention pays is only partially true. In
most instances pollution abatement imposes significant net costs on firms. In cases
where it is profitable to abate, one would expect firms operating in a competitive environment
to have already taken advantage of these opportunities to reduce costs. It is, therefore, not
necessary to provide them further subsidies to take advantage of cost-cutting opportunities.
It is however, necessary to remove import restrictions and tariff barriers for import of
clean technologies.

Emergent policy direction
Mechanism to induce firms to take advantage of these common treatment schemes
Remove import restrictions and tariff barriers for import of clean technologies

The results of the study by Ritu Kumar et al [8] also point towards viewing water as an
economic good and pollution as a problem of market failure, and address it through market-
based instruments (MBIs) such as pollution taxes, user charges. However, it is noteworthy
that the study also expresses the need for stakeholder dialogue and development of
regional water management plans. Any new policy initiatives would also need to look into
the aspect of institutional strengthening of SPCBs to enhance their monitoring and
enforcement capabilities.

In the next chapter we shall weave these emergent policy pointers into a proposed policy
framework, the foundations of which arise from the discussion elements in this chapter.
Case Examples
Chapter 2: Issues in Industry Water Use and Management
20
Note to the Case Examples

As has been highlighted in our discussion on technological and socio-economic approaches,
major efforts to improve water efficiency are taking shape based on industry-based
initiatives. To mitigate the risk of water scarcity, businesses are implementing projects for
assuring water supply and thus business continuity. The case examples cited while
discussing the technological and socio-economic approaches are described in the following
pages.

These case studies have been abridged from a Confederation of Indian Industry publication,
Managing Environment Pays- Success Stories from Indian Industry, published in 2003 [9].





Case Example: Grasim ndustries Limited
Chapter 2: Issues in Industry Water Use and Management
21
Industry: Grasim Industries Limited, Viscose Staple Fibre Division, Nagda. The plant
manufactures viscose rayon staple fibre in regular, high wet modulus (HWM) and polynosic
varieties.
Motivation: Working on the premise of "Environmental Protection begins with ME", where
ME refers to each and every one of us, the plant has developed strategies for cleaner
production in close interaction with its stakeholders viz. everyone involved in the
manufacturing activities.
What the industry has done: The underlying principles of the strategies developed were:
Product Selection, Waste-load Minimization, Energy Conservation and Water Conservation.
For effecting water conservation the plant took the following steps:
Good housekeeping
Closer supervision and monitoring of the process, for reducing waste loads of specific
pollutants viz. ph, Zinc, T.D.S etc
Equipment design changes, for example, continuous viscomatic filters have replaced
conventional plate-and-frame type filter presses, eliminating the need for periodic
washing of the filter cloth and replacement of water cooled electrodes with graphite
electrodes
Recycling of various effluent steams to the maximum possible extent for example,
Xanthator cleaning water is recycled for viscose manufacture as mentioned earlier
Benefits
The efforts have resulted in about 70% reduction in water consumption. Increased
productivity from the equipment has been witnessed, ranging from 25% to 400% at the same
water consumption level. This can be gauged from the specific water consumption level
today of 90-100 m
3
per tonne of fibre compared to 275-300 m
3
per tonne of fibre about 15
years ago.
The investment in the cleaner technology initiatives in most cases resulted in economic and
environmental benefits like:
Saving in cost of pollution control facilities that do not have to be created
Reduced operating costs for pollution control facilities
Reduced manufacturing costs
Retained sales of products that might have been withdrawn from the market on the
grounds of being environmentally unacceptable.
But for water conservation, the plant at Nagda would have remained idle for 3-4 months
every year. Loss of turnover on this account would have been Rs 200 crores per annum,
without considering the multiplier effect from downstream industries.
Case Example: Gu]arat Ambu]a Cements Ltd
Chapter 2: Issues in Industry Water Use and Management
22
Industry: Gujarat Ambuja Cements Ltd, has two cement plants in Gujarat, one in
Himachal Pradesh and a clinker-grinding unit in District Roopnagar, Punjab.
Motivation: The cement industry is inherently known for contributing to atmospheric
pollution in terms of particulate matter emitted from stack and other sources. Water
usage is minimal in cement plants, as the entire production process is a dry one and
water is used only for cooling purposes. Water is required for supply to colony, plant
utilities like cooling and dust control in mines. However, the plants in Gujarat are situated
in located in areas facing ground water depletion and salinity ingress.
What the industry has done: The treated sewage water from township is utilised for
cooling purposes in the plant, greenery development and for spraying on the mines haul
roads, as per requirement
Water Resource Development Programme has been undertaken to improve the ground
water table and to control and prevent salinity with initiatives like construction and repair
of check dams, percolation-cum-storage tanks. Approximately 600 wells have also been
recharged to improve the ground water table.
For drinking water, 25 roof rainwater-harvesting structures have been constructed. This
is a permanent solution for pure and safe drinking water as roof top rainwater is
collected in underground cemented storage tank without any contamination.
The mine pits in this region were connected together and converted into a water
reservoir, and this is now the main source of fresh water for the local population, in the
otherwise water scarce region.
Benefits: Once barren, the land now wears a green look on account of the initiatives like
water resource development, cropping and planting trees by the organization, while
enriching the local ecology by attracting various bird species
Improvement of the social environment through its efforts are directed towards
enhancing the quality of life of local community like, guiding farmers on modern farming
techniques, supporting integrated programmes for the development of natural
watersheds
Employee morale is also high as they feel that the company is concerned about their
welfare.
Case Example: 8andvik Asia Limited
Chapter 2: Issues in Industry Water Use and Management
23
Industry: Sandvik Asia Limited, a subsidiary of Sandvik AB Sweden has its
manufacturing plant at Pune. The plant manufactures - tools and tooling systems for
metalworking, equipment and tools for mining and construction and specialty steels.
Major customers include the automotive, aviation, mining and civil engineering industries
around the world
Motivation: Environmental awareness is integrated as a natural element in Sandviks
total business operations. Environmental consideration is always included in the
development of new products, changes in the processes and production methods and in
the assessment of investments and acquisitions. Echoing the global concern of planet
Earth, the parent company Sandvik AB of Sweden has declared that Sandvik shall
continuously strive to improve with respect to the companys impact on the external and
work environments. Sandvik Asia Limited believes in the philosophy that people are the
real assets of an organization and has been making efforts on a continuous basis in this
direction.
What the industry has done: In the area of water and water conservation the plant has
effectively implemented
Closer supervision and monitoring of the process, for enhancing water efficiency
Treatment of the generated effluents
Zero discharge of domestic effluents, by recycling effluents for gardening.
Benefits
Demonstrate commitment to Environment Policy by reducing consumption of water
and other resources
A positive impact on the morale of the employees. Helped in building Growth, trust,
openness, mutual confidence and better understanding amongst employees
Reduction in the consumption of water by about 27%
Reduction in Effluent generation by about 30 m
3
/ day by the installation of a
recycling and neutralisation system in one major effluent generating process
The reduction in water consumption has directly benefited the plant by Rs 7.5 lakh
Case Example: ndian Aluminium Company Limited
Chapter 2: Issues in Industry Water Use and Management
24
Industry: Captive thermal Power Plant of Indian Aluminium Company, Limited (INDAL)
to run a 30 KTPA Aluminium smelter in Hirakud, Orissa. Plagued by acute shortages
and high tariffs, the company decided to source its own supply in late 80s. Being
located in the proximity of collieries, a Coal Based Thermal Power Plant was the obvious
choice.

Motivation: Indian coal has very high ash content, which not only affects the generation
efficiency, but also gives rise to high gaseous emissions and solid / liquid discharges. To
reduce water consumption by using cooling tower blow down in ash moisturizing, coal
yard spray etc, and recycle at smelter in long term

What the industry has done:

Water conservation audit was conducted in power plant and smelter to identify areas for
reduction, recycle and reuse. Based on the recommendations the following steps were
taken:
In water treatment plant, poly-electrolytes were introduced in place of conventional
flocculants like alum. This reduced the clarifier underflow.
Cooling tower operation was optimized
Reuse of cooling tower blowdown for coal and ash moisturizing

Benefits:

Though technology and design provide inbuilt advantages in cleaner production, the
plant was able to maximize the efficiencies only with management tools like EMS ISO-
14001. The above activities resulted in reducing water consumption by 20%, while the
plant is virtually operating under Zero-discharge situation.

Case Example: Jubilant Organosys Limited
Chapter 2: Issues in Industry Water Use and Management
25
Industry: Jubilant Organosys Limited, Gajraula, Uttar Pradesh.

Motivation: JOL is involved in the pro-active thoughtful management of water through
reduction of its consumption, recycling to the extent possible by modifying the systems
and reusing of comparatively clean waste water of one plant in a lower category
utilisation in another plant, thereby saving fresh water. The ultimate objective is to
achieve Zero discharge.

Water use reduction was not prompted by potential savings in costs of water avoided or
because water was scarce at Gajraula. Being within 6-7 km of River Ganges, good
quality ground water is available in plenty in the area. The cost of raw water also works
out to a low Rs.0.90/ m
3
.

What the industry has done: The approach adopted was the 3 Rs i.e. Reduce, Reuse
& Recycle.

All the effluent generating systems were thoroughly studied and the characteristics of
the effluents identified.

The effluents were then categorized broadly into two-streams viz. coloured (mainly
distillery effluents) and colourless effluents.

The coloured effluents were to be necessarily treated in the Distillery ETP, while for
the colourless effluents; possibilities were studied for their re-use elsewhere as it is
or with minimum treatment.

The time taken to study the existing system, analyze the problems and scope for
savings, identifying the measures that were needed to be taken and implementation of
the same, took about 1 years.


Reduce Reduce dilution of spent wash in Distillery
Reduce requirement of fresh water for cooling in CO
2
compressor
Air blower & NH
3
compressor in Distillery
Recycle Sealing water of vacuum pumps
Reuse Identify second use of water from TEP vacuum pump,
Water from foam trap & yeast vessel of Distillery

Benefits:
The fresh water extraction was brought down from 15500 m
3
/d to approx. 11600 m
3
/d
a reduction of 25%. As a consequence of those efforts the effluent quantity has also
come down by about 3350 m
3
/d.

The cost incurred for the above measures was Rs.30.40 Lakhs approx. The financial
savings came from reduction in pumping costs for withdrawal of fresh water, avoiding
major capital investment for providing treatment arrangement, handling reduced quantity
of treated effluent for storage and subsequent use and reduction in water cess amount.
However, part of these savings was off-set by pumping costs in the newly introduced
recycling systems replacing the once through arrangements. The net savings worked out
to about Rs. 15.0 Lac/yr.
Case Example: Larsen & Toubro Limited
Chapter 2: Issues in Industry Water Use and Management
26
Industry: Larsen & Toubro, Hazira, India

Motivation: L & T Hazira an ISO 14001 company was grappling with reducing the substantial
consumption of water within the unit. Industry consumes a large proportion of water for process
and potable purposes.
The firm pays for this water, invests in treatment systems to make it fit for process and potable
use and also invests in effluent treatment systems. All these costs are calculated on the basis of
volume of water handled. The plant was searching a mechanism to reduce the volume of water.

What the industry has done : A novel solution was developed in-house, an innovative solution
that is practically free: an orifice. The orifice, made of nylon, has been designed so as to fit into
any standard plumbing as shown in Figure I below.

Fig I: Orifice to control water flow
Initially 2,00,000
Litres of water conserved per
day at L&T Hazira works
Orifice to fit inside
water tap
2 mm dia opening


In tests conducted with the orifice, the time taken to fill a given bucket volume was noted and
then the flow rate calculated. Two diameters of the orifice were experimented with 2 mm and 4
mm, the results for which are compiled in Table 1.

Table: Experiment water savings using Orifices of two different openings

Condition Time taken (Minutes) Flow rate (Litres/ Minute)
Without orifice 2.5 24
4 mm orifice opening 5.25 11.4
2 mm orifice opening 12 5
Benefits: Fitting these orifices within the L&T unit at Hazira resulted in conserving water upto 2
lakh litres per day. The overall savings are pretty much substantial when seen along with the
savings in terms of electrical power consumption for operating various water pumps and also
the reduced volume required to store the water.

Enthused by the success of the device, nearly 12000 similar nylon orifices have already been
fitted in water taps across many firms in the country viz. Reliance, Essar Steel who have
reported similar benefits.
Case Example: Maruti Udyog Limited
Chapter 2: Issues in Industry Water Use and Management
27
Industry: Maruti Udyog Limited (MUL), Gurgaon, Haryana is Indias leading
manufacturer with about 55 per cent share of the Indian car market.
Motivation: The management of MUL is sensitive to the issue of sustainable growth.
Efforts are directed towards producing a contemporary product through the use of the
latest technology and production systems acquired from its collaborators M/s. Suzuki
Motor Corporation, Japan. Conscious efforts have been made to ensure optimum
utilization of resources and to take effective pollution control measures.
Water table in and around MUL is on a fast depleting trend. The industrial growth of
Gurgaon area after the inception of MUL and the consequent development of residential
colonies and sectors has aggravated the depletion of water table.
What the industry has done: A comprehensive water conservation initiatives
undertaken were:
Reduction in water consumption & minimization of wastage through
measures like Introduction of ultra filtration modules in paint shop, Storage tanks at
far off places to reduce flow/pressure, Conversion of underground lines to overhead
lines for better monitoring etc
Recycle & Reuse, MUL was discharging nearly 18,40,000 cum of treated water
from the Effluent Treatment Plant (ETP), annually till 1995-96. This was a total loss
to MUL. Recycling of various effluent steams to the maximum possible extent
Equipment design changes, for example, modification in weld shops, minimized
the losses of current, thereby reducing the circulating water requirement by more
than 70%, A Reverse Osmosis system was introduced in new paint shop resulting in
a reduction of DM water usage by 40%.
Rain Water Harvesting, the Maruti factory is spread over 300 acres. A factory wide
rainwater harvesting system was designed in consultation with IIT Delhi and put to
use.
Benefits: MUL today is in a position to meet its water requirement with the help of tube
wells, canal and in-house generation of water at ETP & STP. Rainwater harvesting is
being used to re-charge and improve the ground water table. Recharging of groundwater
table is also being considered from treated STP effluent. This shall reduce the net load
on underground water resources due to MUL by 60%, making the balance resource
available to the environment.


Chapter 3: Conclusion
28
Chapter 3: Conclusion

Policy-makers faced with long term environmental problems often argue that they cannot afford
to worry about the remote and abstract when surrounded by the immediate and concentrate.
The problems that overwhelm us today are precisely those, which, through a similar approach,
we failed to solve decades ago

Dr. Mostafa K Tolba, Former Executive Director
United Nations Environment Programme

Introduction

Growth of Indian economy continues to depend significantly on the adequacy and fairer
geographical distribution of rainwater. The strong GDP growth demonstrated by the Indian
economy recently is a manifestation of good monsoons for last couple of years. It is quite clear
that if this growth is to be sustained then mitigation of local water shortages in the so-called
hydro-hot spots is a must. It was in the Dublin principles of 1992, that water was recognized as
an economic good. The Governments recognized that water development and management
should be based on a participatory approach, involving, planners and policy makers at all
levels [7].

This would require a shift towards input oriented environmental policy (start of pipe), compared
to the conventional output oriented policy (end of pipe). Output oriented policy requires active
counter-measures to mitigate the ecological effects of the waste throughout the life cycle. Input-
oriented policy in contrast, aims to reduce the material flows, by focusing on the causes of the
environmental crisis rather than on its symptoms.

Governments are not adopting input-oriented environmental polices as there is a perception that
internalizing the environmental costs shall hinder competitiveness in international markets.
However, as the case of Tirupur industrial complex shows the cost of inaction is much more.
Moreover, evidence for the potential of such policies to hinder competitiveness is vague and
insufficient [1]. For instance, as the famous example of industrial symbiosis in Kalundborg,
Denmark demonstrates, it is possible to do the right thing for the environment in the pursuit of
rational business interests.

Chapter 3: Conclusion
29

In India, inspite of the absence of government policies, major efforts to improve resource
efficiency are taking shape based on industry-based initiatives. An ever-growing number of
businesses are implementing resource efficiency projects because of the benefits of preventing
waste, rather than cleaning it up once its created.

Policy model for sustainable water use and management in industry

As can be noted from the case examples cited in chapter two, a systematic approach to water
resource management considers a hierarchy of three levels: water conservation, water
reuse, and water recycle. Water conservation covers the most basic of actions such as fixing
leaks, enhanced monitoring of flows, optimizing cooling tower and boiler operation. Water reuse
involves reclaiming water from one source and using it as make-up for another process without
changes in its quality. Examples include wash water being used for horticulture, counter-current
operation in pulp mills and cascading. Water recycling involves reclaiming a water source after
improving its quality. Examples include side stream filtration of cooling water systems and
recycle of filtered white water on low-pressure paper machine showers. Typically, as one moves
from conservation to reuse and recycle, the potential for water efficiency and size of capital
investment increases (Figure 1). This adds to the financial risk of these projects, while allowing
for a greater degree of water savings [1].



Core to the case examples cited in chapter two is the instinct for economic efficiency and
business continuity. From the viewpoint of a business, industrial water management must
Figure 1: Hierarchy of water
management in industry

Chapter 3: Conclusion
30
contribute to these goals. Another point noteworthy is that the efforts have by and large been
voluntary, implemented under the aegis of an environmental management system such as ISO
14001. The efforts had evolved from the participatory approach of involving stakeholders within
the organization, which aided in developing and reinforcing trust and openness within the
industry. This participatory approach when extended to the local community like in the case of
Gujarat Ambuja yielded even more benefits. The Tata Steel study [8] also corroborates this fact
by moving a step further and emphasizing the need for a management plan for regional water
resources based on conflict resolution needs to be developed on a rigorous technical and
economic analysis.

The key elements of the policy

The Brundtland report, Our Common Future, (1987) defines sustainable development as,
economic, social and environmental development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. A working definition is
that sustainable development is the harnessing of resources, the direction of investments the
orientation of technological development, and the institutional cycles, all made consistent with
future as well present needs.

Based on the above definition, the necessary preconditions for sustainable development
are, namely:

Equity and social justice, implies participatory approach
Endogenous choices, implies that the initiatives are voluntary
Economic efficiency, implies that the initiative must be economically viable
Ecologic harmony, implies the initiative must operate within the carrying capacity of the local
eco-system, without causing irreparable damage to it

As is evident from the case examples in chapter two, the initiatives were satisfying some or all
of these preconditions. Thus, the key learnings one can pick from the case examples have
been:

Cradle to cradle closure of the water cycles, for this a shift towards input oriented policy
as described earlier in this chapter is required. This essentially would mean ensuring

Chapter 3: Conclusion
31
multiple uses of water during a typical industrial water use cycle (cradle to cradle). For this
the hierarchy of water management as shown in figure 1 is a good starting point.
Treat water as an economic good. Appropriate water pricing mechanism should
internalize water cost and the pollution cost. The use of water has to be related to the
water quality (and not just water availability and the economic aspects).
Use of market based mechanisms. Command and control options presently in vogue
should be sparingly used. The choice of economic instrument however should be revenue
neutral. Revenue neutrality is essential to industrial competitiveness, and any revenue
collected through charges be ploughed back to assist recycling and reuse of water. This
should however be done through comprehensive stakeholder dialogue on reform measures,
to ensure implementation and avoid conflict
Develop regional water management plans, especially for hydro-spots. Management plan
for regional water resources should have a mechanism for conflict resolution amongst water
use stakeholders

A policy option aimed at the aspirational goal of sustainable development hence would have to
satisfy the pre-conditions cited above. The policy would need to meet the touchstones of
accountability, participation, predictability and transparency. Such a policy model is depicted in
Figure 2. Figure 2 maps out the proposed interventions to be made at a policy level to address
water management issues from an industry perspective. These issues have emerged from the
discussions in case examples in chapter two. The issues have been broadly divided into four
categories based on the stakeholder with whom industry interacts, namely the resource inputs,
market forces, institutional support and the policy framework. The enabling approaches that are
suggested for inclusion in the policy are also listed. Key to the entire process is transparency of
interaction amongst industry and its stakeholders i.e. a participatory approach. A model policy
framework would thus have to:

1. Allocate sufficient priority for water allocation to industry
2. Provide incentive for uptake of water efficiency, especially in the case of water intensive
industry sectors. The policy approaches discussed in chapter two are in this direction

From the case examples it is very clear that, Industry and environment can no longer be
considered mutually exclusive. A sustainable enterprise is not just based on idealism, but also
on enlightened self-interest.

Chapter 3: Conclusion
32
Figure 2: Policy Framework for Sustainable Water Management in Industry


n nn n n nn nd dd d d dd du uu u u uu us ss s s ss st tt t t tt tr rr r r rr ry yy y y yy y
Resource
Endowment

Market
Pull

nstitutional
8upport 8ystem
Enabling Policy
Framework
Issues
Assured access to water
Water quality / quantity

Policy approaches
Participatory approach at local
level e.g. water shed
development schemes
Source augmentation e.g. rain-
water harvesting
Zero discharge situation
Issues
Access to affordable water efficient
technology especially for SMEs
Conflict resolution at local level

Policy approaches
Industry R &D linkages
Affordable finance options from Financial
institutions
Regional water resources management plan
to include mechanism for conflict resolution
Issues
Remain competitive
Enhance quality of life

Policy approaches
Recognition of voluntary
efforts e.g. EMS
Consumer awareness e.g.
eco--labeling
Issues
Low priority to industry access to water
Low incentive for uptake of water efficiency
especially for SMEs e.g water cess pricing,
recognition and / or reward for best practices
Multi-ministry water management

Policy approaches
Participatory water governance
Water be brought under a single ministry
window
Mutual trust for synergistic efforts
Recognition and Incentives to industry efforts
Revenue neutral economic instruments

Chapter 3: Conclusion
33
Similar initiatives need to be initiated in other competing sectors also, like agriculture.
Unfortunately, less attention is given to agriculture, a significant user of water, because of the
political influence and protection of the agricultural sector. As Mr. Anand Mahindra, President
(2003-04), Confederation of Indian Industry puts it, My biggest fear is agriculture. If the growth
is not sustained, industrial growth could well be back to where we started. To ensure that this
does not happen agricultural reforms with a particular emphasis on water resources- from
harvesting to conservation to recharging have to be pushed. We cannot consider ourselves a
robust economy if everything hinges so crucially on the monsoon (The Times of India, New
Delhi).


References
34
References

1. Water Recycling and Resource Recovery in Industry, edit. Piet Lens et al, IWA
Publishing, 2002
2. India Today, June 9, 2003
3. Green India 2047- DISHA, The Energy and Resource Institute, 2000
4. India Development Report-2002, Oxford University Press & IGIDR, 2002
5. The Worlds Water-Biennial report on freshwater resources, Island Press, 1998
6. India: Mainstreaming Environment for Sustainable Development, Asian Development
Bank, 2001
7. Water for the Poor, World Business Council for Sustainable Development, 2002
8. Full cost pricing of water: Options and Impacts, Ritu Kumar et al, UNIDO, February
2000
9. Managing Environment pays- Success stories from Indian Industry, Confederation
of Indian Industry, Environment Management Division, 2003