Karnataka Hikes Industrial Water Tariffs By 100 Times

Even as states compete with each other for being more business friendly, the Karnataka government has ordered a hundred-fold hike in industrial water tariffs, as reported by the Deccan Herald.

The government has said that the decision is based on the recommendations by Krishna Bhagya Jal Nigam Limited (KBJNL), which comes under Major irrigation department, and that the new tariffs will be effective from 28 May 2018.

The government has revised tariffs for water drawn by industries from reservoirs, lakes, canals and tanks. Tariffs for drawing the water from natural sources has been increased to Rs 1.5 lakh per million cubic feet (mcft) from the earlier Rs 1,800 per mcft. For water from other sources, earlier priced at Rs 3,200 per mcft, tariffs have been hiked to Rs 3 lakh per mcft for all industries.

“There is a need to raise money for irrigation projects. Currently, there is a fund crunch to even manage operational and maintenance costs of the projects. Hence, it was decided to revise the tariff for industrial use. The National and State Water policy of 2012 allows for revision of the tariff. Accordingly, the core committee made the proposal and the government cleared it,” a KBJNL official is quoted to have said and confirmed.

“It took us three years to come up with the proposal and it has been implemented after 10 years. The tariffs will not be revised for the next four years. The committee had recommended revising the rates from Rs 1,800 to Rs 3,200 mcft first, but subsequently it was revised to Rs 3 lakh,” a member of the eight member committee which has recommended the hike is quoted to have said.

This move has not gone well with the industries. They have said that the government’s move is unjustified. “The move to increase the water tariff by 100 times (10,000 per cent) is “unscientific” and not maintainable. The government, in fact, should charge industries differently. There should be a lower tariff on industries which have invested on creating pipeline infrastructure to transport water,” a senior executive from JSW Steel is quoted to have said.