XAT 2020 — Decision Making Question 10
Read the following paragraph carefully and answer the question that follows:
A Multinational Company (MNC) sources pristine natural spring water from Bori, a village in Satpura mountains. The unprocessed natural spring water is directly bottled by the MNC. The company brands it as “Natural Spring Water” and sells at 50% premium vis-a-vis other brands that sell processed water.
The local panchayat, under the Panchayati Raj Act, 1992 controls the spring water usage. Hence, the company signed a 30-year contract with the panchayat for exclusive access to the spring water for business purposes. This contract contributes 50% to the panchayat’s revenues besides providing 250 jobs in the panchayat. The spring also meets domestic and agricultural needs of the people of Bori and the surrounding villages
The MNC is concerned about chemical contamination of the natural spring water due to the agricultural runoff with pesticides and fertilizers. The MNC is looking for a sustainable solution to this contamination.
Which of the following courses of action will BEST solve the issue?
Answer & solution
- A
Acquire all agricultural land in the natural spring’s catchment and afforest them.
- B
Negotiate with the Panchayat to gain control of the entire spring and provide alternate sources of irrigation for farming.
- C
Move to another state with unexploited natural springs.
Coax the farmers in the natural spring’s catchment to move to organic farming.
- E
Change branding from “Natural Spring Water” to “Processed Drinking Water”.
Option 1 is too extreme as a lot of farmers may lose their livelihoods if all agricultural land is acquired. Option 2 is too high-handed as this spring is used not only by the people of Bori but also by the surrounding villages. Option 3 is incorrect as moving to another state is not a sustainable solution as the problem with this chemical contamination still remains. Option 4 is the correct course of action to be followed as it will provide a sustainable solution to the contamination problem. Option 5 can easily be eliminated as the company cannot charge a premium price on the rebranded product.
Hence, option (d).