Water Mining – Making money out of nothing!

One glance on the roads of Bangalore at any time during the day or the night and you will not miss the tankers carrying water around. So I decided that coming back from this hiatus, they seem to be what I should put a post on…

Selling water is a good business in this city. All you need is a bore-well which costs around Rs.1 lakh including the money that you give (illegal of course) to various government departments. According to a leading daily, 40 borewells are dug in this city everyday! That is one number which is hard to digest for a state which has scarcity of water…. Back to the business, you can hire 2-3 water tankers by paying around Rs.1000 per day to the owner. The rest of the costs go as below:

Daily costs per tanker:

Tanker Hire charges	Rs.1000
Driver Commission	Rs.500
Assistant Commission	Rs.200
Diesel	Rs.1000
Electricity cost (per day per tanker)	Rs.500
Total Cost per day	Rs.3,200

Truthfully, there are no other costs on a monthly basis because tanker maintenance is done by the owner of the tanker. If working 25 days per month, this translates to a total cost of Rs.80,000 per tanker per month.

Now lets talk about the sales. Typically, a tanker does around 10 rounds to predestined places everyday. One tanker of water costs around Rs.500 (can go up in case of scarcity but never comes below this). So that means a daily sale of Rs.5000 per day or Rs.1,25,000 per month translating to a profit of Rs.45,000 per month per tanker for a borewell owner. Have around 3 such tankers working for you (that’s the average that I have seen) and you are making a cool Rs.1.5 lakhs per month (or around $3,300 per month) at a total investment of Rs.1 lakh and you are doing nothing! Call any of these water businesses and you will most probably reach a lady in a house who will only take a message or address if you want water somewhere.

Understanding the business, now to the point I am trying to make. Water is a natural resource and just like any other natural resource (except sun and wind) it is bound to deplete unless measures are taken to ensure conservation. None of these businesses that I have spoken about above pay any taxes on the profits they make. Officially, for the government, they don’t exist! (Obviously a typical BBMP official or Water Board official here pays a bribe of few lakhs to get a juicy posting and they will make a lot more money than that.) And the density of these businesses is few ten’s in every square kilometre if the city.

While our governments are trying to regulate everything under the sun, what I believe that they need to regulate is this mushrooming market of illegal water mining which is depleting us of much more than we can comprehend. Start putting a mining royalty on each of these businesses and possibly regulate the upward price movements so that consumers are not hit to the extent since profits are anyway being made in good measure.

Use the royalty money to implement water conservation schemes across the city to ensure that while we use water which is required, we don’t start missing it after few years.

Anyone listening?

Why am I a non-vegetarian - An economic perspective

Disclaimer: Anyone promoting vegetarianism may not like what I am writing below. I make no qualms about being a non-veg and I love my chicken and sea food in any form, shape or size (just make sure its cooked). I respect vegetarians (my wife is one) and I expect others to respect my eating habits so please don’t comment if you are a “I can’t hear about non-vegetarianism” type.

Ever wondered what will happen if as a lot of advertising nowadays is promoting, everyone became a vegetarian? I thought of the economics of this thing and came across two points which might see a change if this happened:

1. 1.     Jobs!

a.      According to FAO (www.fao.org) there were 38 million fishermen in the world. Assuming that each household has one fisherman and 4 people, that will make a total of around 150 million people sustaining on fishing.

b.      Add to the above the middlemen who purchase and sell the fish to the buyers and take the above figure to around 200 million.

c.       Lets talk chicken....Did you know that there are more than a 100,000 poultry farms in Bangladesh itself! (Courtesy another FAO report) Will I be wrong in saying that some few million poultry farms exist in the world?

d.      Now just add the number of retailers selling non-veg stuff including all the restaurants, the various subsidiary industries existing because of non-veg cooking....and the number of people sustaining their livelihood on non-veg DIRECTLY will go way beyond a billion in a world with total population around 7 Bn! (That is 15% of total world population...)

1. 2.     Inflation! (Yeah you heard me right...!)

·         While in India, it is reported that around 40% of the population is vegetarian, this January, 2010 article (http://www.articlesbase.com/health-articles/vegetarian-populations-around-the-world-1725231.html) says that around 60 million other people are vegetarians. Add 40% of 1.2 Bn Indians which makes the figure go up to around a billion. So that makes around 6 billion non-vegetarians.

·         Is it safe to assume that a non-vegetarian has non-veg once a day? (on an average I know of people who cannot survive without non-veg while others have this once in 2-3 days). I know for sure that this is a very very conservative estimate....

·         Now also assume that non-veg accounts for 30% of the plate contents which will give it a share of around 10% of your food basket.

·         Now consider all the 6 billion non-veggies convert to vegetarianism...the 10% of their food basket will be converted to vegetables.

·         The cost of vegetables will automatically double and more... just do the math. I am no economist!

So unless you have jobs to give to a billion extra people and can ensure that the vegetable demand can be met, I will suggest look at more important things to do that convert people to vegetarianism.

Falcon