Economics of water pollution: the Indian experience Essay

India is the 2nd most populous country in the world and the 7th largest by size, India’s economy has been galloping along at 9.43% per annum for the last couple of years, agriculture accounts for 43% of the geographical area of India and the rest is allocated to industries and domestic living. The market for drinking water is potentially a gold mine waiting to be dug because this is one of the most populous countries in the world and is right there at the top in terms of geographical size. The water pollution has been on the rise ever since India started opening up its economy because then by default the demand for each and every product increased because of increasing globalization and hence it can be said that the standard of living has risen and this has caused even more pollution because this sets off the industrial process even more rigorously because demand even increases locally and hence more has to be produced and because of that more income is generated. Due to this more and more people have been able to use synthetic detergents and powders which damage the water resources considerably and also put in danger the ground water.

Agriculture though has been on the decline in India but still 60% of the labor force is involved in agriculture and hence fertilizers and other synthetic materials are being used which increase the dangers of polluting the ground water. Another concern is the alarming rate at which India’s population has been increasing, this is a cause of concern because the domestic waste produced is another major cause of polluting the water resources and also a growing population means that more people need access to drinking water but it also means that there would be much more pollution and hence lesser drinking water available for every one in the country. The government has been trying to do all it can to stop the industrial pollution by giving certain advantages to factories who install systems through which water pollution is lessened but to date it has failed to implement it on a large scale.

Costs and benefits:

There is a debate in the Indian sub continent that should water be commercialized or not because it is just a lucky few that have the means of buying water that has been commercialized and the others have to make do with the same unhygienic, unclean water which is hazardous for health. But the flip side of the argument is that the government has failed to deliver on this front and hence private companies have taken over and off course they would do so only if there is a profit, but what if these companies stop providing the clean water that they are currently providing? Then each and every one would have to resort to the same unclean water and as a result the percentage of people falling ill from water borne diseases would increase and hence as a result the cost for the government would go up, so there is plenty of potential in the commercialized water sector and the time is now.


The firm in question can do one of two things, first, it can set up its own distillation plant and take the initiative to bottle the water it self and hence it will have to inadvertently advertise to compete with the products that are already available on the market and hence this might create problems because a brand image of the previous companies would have been formed where as the new firm would have to advertise on a big scale to take its share of the market that would mean that the costs are high right from the start and the competitors might even engage in drastic cuts in prices and the firm in question will not be able to compete with the established firms on the basis of costs because the established firms will be experiencing economies of scale because of their greater experience in this certain kind of a market.

The other option available to this firm is to operate its distillation plant and supply this water to another firm that has already been established in this particular industry. This would make things a lot simpler because due to this the firm can concentrate on its distillation plant and let the more experienced firm do the bottling and marketing of the water. This would also reduce the risk from competition and aligning one self with an established firm has its own advantages in the form of goodwill that you earn. Since the firm provides technology that is the worlds very best and the most innovative it can perhaps lure even more than one firm because every firm would want to have the water distilled from the very best because it provides these companies with another marketing and advertising gimmicks but this would prevent the company from having any ideas of an expansion later on because it would have signed contracts with companies and it wouldn’t be able to make use of the revolutionary technology for its own good because other firms would have access through to it.

Anti-pollution products:

The problems mentioned above i.e. the problem of the industrialization process leading to the generation of more and more income for the locals and hence creating demand for goods locally as well and hence setting of the cycle again, this has increased the standard of living and detergents and liquid soaps have become very common and hence as a result the pollution from the use of such products has been on the rise ever since India warmed up to the idea of globalization. The agricultural industry can also do with products that are anti-pollution because 43% of India’s land is being used for agriculture and the use of low quality pesticides and fertilizer has been a major cause of increase in the pollution levels. The level of government interest would be of special interest here because the government should take steps to support such goods, even subsidize so that it can keep the pollution levels intact.

The government has given certain concessions to industries and factories who have installed certain machinery which will help in the reduction of pollution but so far has not adopted a clear strategy to reduce the pollution through such innovative products. The price of these products would be of special interest to the consumers because usually products that are anti-pollution are graded as the second best thing because there is a mental schema amongst the general consumer that because of the technology used for reducing pollution the product would not be as good as the one that is not designed to contain the level of pollution, hence price should be lower for the goods so that people are able to over their schemas. The advertising would also have to be very good and should be very target specific because it would be costly. Agricultural products would have to be marketed specially because the agricultural sector has been on the decline in the recent past and hence every farmer would want to stick to the tried and tested method. As a result the new anti-pollution product would hardly make a mark on the sector if not marketed properly and cheaply.

The products and the innovation in technology can be a revolutionary step specially in a market such as India but what needs to be taken care of is as mentioned above that the products need to be marketed using specific target marketing and advertising to reduce the costs to the bare minimum and the revenues to the optimum level and the products need to be priced at a level which is consumer friendly in view of the economy and the populace of India and should be in accordance with all the local consumer regulations and statutory act of parliament and other rules and regulations of the government of India. The role of the government is very important as well because the government is mainly responsible for creating awareness amongst people for the reduction of pollution and for marking out pollutants; the company should also take part in such schemes.


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