Water extraction is virtually unregulated as a colonial era law gives landowners private property rights not only to their land but whatever groundwater lies underneath and few Indian states have implemented water resources legislation.[ii] And while law does provide for the collection of a tax on water consumed by industry, the charges are so miniscule that heavy water uses like Coca-Cola can draw groundwater virtually for free. For all the water it withdrew in Mehdiganj during 2005-2006, the plant paid a water tax of just $717.57 for the year.[iii]
In fact, the Company located much of its production in these rural, primarily agricultural communities outside of larger metropolitan areas to access reserves of water as well as cheap labor. This was in line with the liberalizing Indian government’s shift from state- to market-led forces to fuel the economic development of rural India as it disavowed previous rural economic social welfare policies and neglected the lack of environmental regulation and water scarcity across the country, to encourage industries to invest in “underdeveloped” or “backward” areas, in the language of the Indian state.
[i] This paper builds upon interviews with over 60 residents and activists of Mehdiganj, Uttar Pradesh, Kala Dera, Rajasthan, and Plachimada, Kerala in the spring of 2008.
[ii] Ibid., 220. A few states had instituted water policies of their own prior to this National Water Policy, for example, Uttar Pradesh in 1999.
[iii] The Easement Act of 1882 as discussed in (TERI), "Independent Third Party Assessment of Coca-Cola Facilities in India," 90. For all the water it withdrew in Mehdiganj during 2005-2006, the plant paid a water cess of just Rs. 31,573.00 or $717.57, with an average exchange rate of around Rs. 44.00/1 dollar in 2005-2006. Ibid., 223.