And, if the bottled water manufacturers/distributors decide to divert their product to neighbouring states that have no caps, it would be Kerala’s loss.
The Kerala government has capped the price for one-litre water bottles at Rs 13, classifying water as an essential commodity. Many would agree with the state’s argument, that Rs 20 for a bottle amounts to rank exploitation. Whether or not that is the case, it is important that a basic need such as drinking water shouldn’t be priced out of a person’s reach. However, capping the price will be no real solution—indeed, it may even deprive those who can afford bottled water at Rs 20 of the option, quite like what capping medical device prices has done to the Indian patient with reputed stent-makers taking their top-end products off the market.
Such capping could lead to unintended adverse consequences—even though the Kerala government has said that bottled water at Rs 13 must conform to BIS standards, what if the market is flooded by inferior quality water just to keep to the price cap? It could prove a serious health risk. And, if the bottled water manufacturers/distributors decide to divert their product to neighbouring states that have no caps, it would be Kerala’s loss. The better way to counter rank profiteering, whether real or imagined, by the bottled water companies is for the state to augment supply by either providing drinking water points at easy-to-access locations, either entirely free of cost or for a nominal price—Odisha and Delhi have experimented with this—or to go the Jan Ausadhi way, where it subsidises bottled water, by getting hefty discounts through bulk purchases. Introducing competition or a better negotiation strategy could get the price down more efficiently than outright capping.