COMMENTARY

Quenching Thirst by Stealing

Livelihood
Kaladera Bottling Plant of Coca-Cola
Pragati Jain, Prerna Jain

The shutting down of the

Coca-Cola bottling plant at
Kaladera, Rajasthan only after it
has exacerbated the miseries of
this water-scarce village shows
how improper institutional
practices can put the welfare of
the people living in the area at
stake. The Kaladera case
highlights the importance of the
role of the state and its institutions
to safeguard the interests of its
people, particularly the weak and
marginalised.

aladera, a small village 40 kilometres from Jaipur, was recently

talked about in print and electronic media not for its mud resistant
block prints and natural dying handicrafts,
but for the shutting down of the Coca-Cola
bottling plant which has supposedly
drained the area of its water reserves.
More than a decade of struggle and
peoples movement saw an end to the
corporate exploitation of the scarce
water resource at Kaladera. The closure
of this plant along with two morein
Andhra Pradesh and Meghalayaraises
serious questions on policy planners, institutional bodies granting licences and
the role of the pollution control board.
The maxim of paradox was realised in
2000 when a water extracting bottling
unit was allowed to set up its plant in
one of the most water scarce regions of
the country, Rajasthan. The state government adopted an anti-welfare policy
by providing tax incentives to a beverage producing unit in Govindgarh block
which was declared overexploited1 in
1998 by the Central Ground Water Board
putting at stake the welfare of the marginalised section of Kaladera.
Saga of Kaladera

We thank an anonymous referee of this journal

for insightful comments on the earlier version
of this article.
Pragati Jain (268djn@gmail.com) teaches
in the Department of Economics at Central
University of Rajasthan, Ajmer. Prerna Jain
(prerna.jain@jaipuria.ac.in) teaches at the
Jaipuria Institute of Management, Jaipur.

18

Kaladera is located in the semi-arid zone

of Govindgarh block and has frequent
droughts and low average annual rainfall
of 595 mm. Kaladera has no canals, no
water bank and a dried river Bagho. The
only source of water supply is the monsoon and underground water. Agriculture is the dominant livelihood option
for the rural community. Shortly after
the beverage unit started its operations
in the water-starved Kaladera region,
the local people experienced adversities
in the form of exhausted water reserves
dried wells and handpumps. A study by
Karnani (2012) is testimony to the drastic

rate of depletion of underground water

reserves soon after the establishment of
the bottling plant (also see Figure 1).
The bottling plant pumped underground
water from deep aquifer digging out
extensive volumes of water. The smart
water management practices claimed by
Coca-Cola have been falsified by water
experts, as well as the drastic depletion
of the prevailing groundwater levels
after its establishment.
Figure 1: Groundwater Level at Kaladera (m)

Source: India Resource Centre 2011.

The scant availability of water for irrigation dipped the agriculture yield. The
marginal farmers and the agricultural
labourers were the worst affected segment due to water shortage. New job
opportunities generated by the beverage
plant were contractual with meagre
salary and mostly hired from outside the
local community. The existing livelihood was badly hit by the groundwater
extraction of the bottling plant and the
new opportunities were not sufficient
either in the number of jobs created or in
the volume of wealth creation (for the
local community) to justify the loss in
income due to scant agricultural produce.
This narrative of Kaladera raises serious
questions on the regulation and monitoring role of the state, on the policy decision
concerning the trade-off bet ween industrial demand and agricultural demand for
water, on the criterion of positioning (on
the basis of resource availability) of a
manufacturing or industrial unit.
Bottling Plant Externalities
These 15 years of operations of the
bottling plant, Coca-Cola at Kaladera,
might have quenched the thirst of the
masses. However, this was not at the
retail price of their products but at an
exorbitant price paid by the local village
community. In economic terms, it is the

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externality which remains out of price

setting and therefore, does not reflect
the true cost of production. A good with
much higher actual costs is thus available at a much lower price to the consumer of the beverage, consequently
escalating the demand and raising
stress on the resources (water reserves).
Unquestionably, the opening up of any
manufacturing plant provides some livelihood opportunities to the people of
that area. In addition, the local community enjoys the activities undertaken under
the flagship of corporate social responsibility (free medical camps, scholarship to
meritorious students, sewing machines
to widows, etc). However, the adverse
effectsalthough not entirely quantifiableare quite grim.
First and foremost, it adds to the water
shortage and crisis. As the water levels
deplete, it adds to cost of electricity/fuel
of the pump sets for the locals. The miseries of the people rise as they have to dig
deeper tube wells using more horsepower.
There is an increase in the time spent for
pumping water from handpumps for
domestic consumption. This increases
the burden on women and girls who are
forced to fetch water from far-off places.
Additionally, it contributes to efficiency
loss in agricultural or other livelihood
activities. Water scarcity results in reduced
agricultural productivity and availability of green fodder for cattle which leads
in loss in incomes. There is the added
cost in terms of the pain and agony faced
due to forced migration to urban areas
in search of alternative sources of income. There is also the cost of the years
of struggle, protest, demonstrations for
protecting the local livelihood options.
Far greater damage is also done to the
local ecosystem and environment. Hydrologists mention that continuous withdrawal from the groundwater reserves
disturbs the natural concentration of
earthen salts, destroying the quality of
water. This also increases the probability of earthquakes as the occurrence of
earthquake is directly related to the
earths upper crust. Groundwater acts
as a weight on the earths upper crust
and the force of the weight keeps the
upper crust suppressed. As more and
more groundwater is being extracted,
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the force exerted gets released, thus

triggering the seismic activities.
Closure of the Kaladera Plant
While the officials claim that the closure
of the plant was due to the slump in
demand and projections of scant future
demand, the reality may be fairly different. The company started facing resource
challenges; a third party assessment of
the Coca-Cola plant way back in 2008
had suggested the plant be shut or repositioned to a water abundant region.
The MalthusRicardian scarcity principle states that scarcity of resources
restricts economic growth and eventually
brings it to a standstill. Contemporary
economic theories argue that scarcity of
resources cannot deter growth, but the
market system would limit the use of resources and in the same way, possibilities
of substitution and technological improvements can allow the system to continue
to grow. Water, however, is a resource
without a substitute and technology has
not come up with replacement options.
Since rights and access to water resources
play a vital role in shaping livelihoods,
especially in the rural India, therefore,
water management is essential.
In India, water is a state subject. Even
though Rajasthan has brought out water
policy documents since 1988, the allocation for conflicting uses of groundwater does not seem to fall in place.
Expressions of this conflicting use and the
inability of the state to deal with it could
be witnessed with the inter-sectoral water
conflict at Kaladera and the subsequent
shutting down of the Coca-Cola plant.
The ambiguity of underground water
use has led to the reckless use of water
amongst different sectors, normally denying the marginal and small crop growers.
The latter cannot spend as much on water
withdrawal as the industries. In case of
groundwater, the de jure and de facto
rights are different; landowners do not
have any obligations whatsoever in extracting as much water lying beneath
their land, though legally they do not
have any rights to the underground resources, including water (Reddy 2010).
Given the plurality and the associated
ambiguity with water resource, no clear
property rights, and conflicting uses
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amongst different strata of societyone

for profit generation, another for maintaining minimum sustenance levelit is
the onus of the state to manage such a
scarce resource. Utilisation of groundwater reserves should be so planned as
not to exceed restoring potentials, and
also to safeguard social justice. Theoretically, the current state of Kaladera may
be due to improper water management
and the lack of clear property rights,
but practically speaking, it is the state
and the bottling plant that may be held
responsible.
The Blame Game
Should the Coca-Cola plant be blamed
for escalating the water crisis in Kaladera
or the institutional mechanism be held
responsible for granting permits to establish the plant? Whosoever is held liable,
the miseries of the local community can
be defused only by the natures capacity
to rejuvenate the water-starved areas
into water-abundant areas. Efficient
water harvesting mechanisms can help
this process.
With no institutional mechanism to
replenish the loss, there should also be
no machinery to induce such loss. Water
management has been a daunting task.
The lack of clear property rights is the
main cause of uncertainty about the
adverse environmental impacts of resource use, leading to wasteful and unsustainable consumption. This has been apparent in the case of both groundwater
and canal water supplied for irrigation
(Pearce and Warford 1993; Marothia
2005, 2009, 2010).
However, the problem that erupted in
Kaladera cannot be ascribed to a lack of
a proper water management system in
place. Primarily, the problem was the
outcome of insensitivity of the institutional mechanism towards marginalised
agricultural workers and farmers. The
human right to water is universal, and is
supposed to protect people against discrimination (Rosemann 2005; UNDP 2006).
The government should have practised
the role of a welfare state (which takes care
of the marginalised and weak sections
of the society), while allocating permits
to a project which is water demanding in
a water-starved region. The appropriate
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COMMENTARY

policy option calls for increased public

participation in water allocation and
management decision-making. The policy
should be so designed as to fulfil the
ideology put forth by M S Swaminathan:
we should not only work for the
consumer but also for the producer. As
everyone has the right to live, no one
should be deprived of the means of life
and livelihood, and least of all for a
drink known to have adverse health and
environmental consequences.
note
1

20

Overexploited refers to a condition where groundwater extraction is greater than the annual

groundwater recharge and water levels are

displaying a lasting (period of 10 years) deteriorating trend.

References
India Resource Center (2011): Water Levels Continue Dropping Sharply: Coca-Cola Extracts
Groundwater Even as Farmers and Community
Left without Water, India Resource Center, 21
September, viewed on 4 March 2016, http://
www.indiaresource.org/news/2011/1008.html.
Karnani, A (2012): Corporate Social Responsibility
Does Not Avert the Tragedy of the CommonsCase Study: Coca-Cola India, Ross School of Business, Working Paper 1173, University of Michigan.
Marothia, D K (2005): Institutional Reforms in
Canal Irrigation System: Lessons from Chhattisgarh, Economic & Political Weekly, Vol 40,
No 28, pp 307484.
(2009): Governance and Institutional Change in
Traditional Commons, Invited paper Presented

in the 4th World Congress on Conservation

Agriculture, NASC Complex, New Delhi,
47 February.
(2010): Technological and Institutional Options
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No 1, pp 4557.
Pearce, D W and J Warford (1993): World without
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Reddy, V Ratna (2010): Water Sector Performance
under Scarcity Conditions: A Case Study of
Rajasthan, India, Water Policy, Vol 12, pp 76178.
Rosemann, N (2005): Drinking Water Crisis in
Pakistan and the Issue of Bottled Water: The
Case of Nestls Pure Life, ActionAid,
Pakistan.
UNDP (2006): Summary Human Development
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Development Programme.

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