My late grandmother used to say that she enjoyed drinking water straight from the tap, as it gave her a feeling of abundance and purity. Cut to 2014 and you are unlikely to find anyone that would find merit in this argument. For one, habits have gone sophisticated and pure water is also not that easy to get.
As they say, each need is an opportunity and the water purification business in increasingly gathering steam.
The around Rs 2,000-crore business in the organised segment is primarily centred around making water fit for drinking and getting the contraption installed in a kitchen.
Of the various processes used to purify water, boiling is the age-old favoured method in rural areas, still, the urban brethren seem to have moved on to other processes like Reverse Osmosis (ROs) and UV, UF etc, to an extent. The government also seemed to have understood the importance of the water purification industry, and it announced in the recent union budget that the excise duty on membrane, the filter that separates pure water from impure water will attract an excise duty of 6% instead of the 10-12% now. We were told that this would reduce the prices of the ROs.
However, the industry is not that enthused. “There are more than 50 components that go into the making of an RO. This excise duty cut will lead to a reduction in price by around Rs 50-60 per unit,” says Mahesh Gupta, chairman, Kent RO Systems Ltd.
The main challenge before the business is in creating awareness of the need for their product, adds Gupta.
“People need to understand that pure water is a necessity and is important for health. Boiling is not the best solution to get pure water. In rural areas, no one is willing to pay Rs 15,000-16,000 for an RO system. Power supply is also erratic,” he adds.
It’s a bit like the American proverb that if you first create a need for a product and then launch it, you can rarely go wrong. However, in India, where we routinely hear people falling ill to water-borne diseases, there is a readymade market available, but penetration remains low.
For the tricity itself, a ballpark figure based on my own observation would suggest that around 40-50% of homes and establishments have a water purification system installed, of any kind. So, what are the options that can, as an initial step for this fledgling water purification industry, lead to the habit of paying for pure water?
The latest scheme that has been introduced in states like Rajasthan and Maharashtra are branded as water ATMs. These sell pure water at Rs 1 or thereabouts per litre. The projects are based on the RO technology, but have been made more convenient for the enduser by ensuring that the customer is able to get the water he needs through a prepaid card and a machine.
The model can be considered as a large-scale extension of the conventional RO systems some of us might have at our homes, but the user is a community. Besides water ATMs, we have the major component of the business, the bottled water segment. Selling convenience and mobility around water as the theme, this business has gained strong ground in urban localities, but is largely an unaffordable proposition for more than 80% of Indians.