Water's cheap and storage isn't. I would expect resale to only significantly affect the price of extreme bulk use. Residential use isn't that big and I expect the vast majority of the price to stay in distribution and filtering.
> Water should be free upto basic living necessities.
If you mean to an end user, that's your opinion. I think we should aspire to that, but water is most definitely not "free" in general, and treating it as such is very dangerous. Even if government is responsible for providing water to the people, there is a cost (to the government for obtaining that water), and that cost needs to be accounted for somewhere.
Perhaps you can provide a better price discovery mechanism that efficiently matches the price to its cost, that is robust to environmental swings and minimizes waste. Please let us know.
Water should be free upto basic living necessities, and the government should be responsible for maintaining that.