Liquidity Crunch

Water Supply Cost Recovery (%)

• Delhi 41.6
• A’dabad 53.9
• Chandigarh 64
• Hyderabad 69
• Bangalore 92.2
• Guntur 144.9
• Tiruchirapalli 197.4
• Thiruvananthapuram 223

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Steadily Flowing Crisis

• Water charges across cities on the upswing as municipalities grapple with rising costs
• Higher tariffs, based on volumes used, on the cards for industries, commercial units
• New scheme being launched to reassess India's water resources and usher in reforms
• New authority mooted to ensure projects with conditional clearance fulfil obligations
• Incentives for states to set up regulatory bodies

Source: Ministry of Urban Development, 2008-09

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Consider the first-of-its-kind move in Maharashtra to bring in a new legislation that would allow a group of ministers to decide how much water to allocate for industrial/commercial use. While domestic water availability may not be affected, large areas of farmland will have to go without water if the politicians so decide. “The whole priority of the government has changed to provide more water to Indiabulls Power’s new project in Wardha, where the prime minister had promised a package for improving irrigation, and the Lavasa township. These are projects in which many politicians have invested,” says an agitated Raju Shetti, the head of the Swabhimani Shetkari Sanghatana and an MP from Kolhapur.

Over 23,000 hectares of farmland in Wardha region will be deprived of irrigation if water is diverted to the power plant, estimates Shetti. Instead of depriving farmers of scarce freshwater resources, Shetti feels industries should be allocated only recycled water. “Given its state of agriculture, the Maharashtra water policy is peculiar, with industry being given priority over irrigation,” says Planning Commission member Dr Mihir Shah, currently heading efforts to chalk out a new national water strategy.

Stating that it makes perfect economic sense to recycle water for industrial use, Shah stresses, “Industry has to increase its dependence on recycled water and reduce dependence on freshwater.” And not just industry, urban India as a whole needs to focus more on recycling water (80 per cent of water provided in households gets discharged as waste), according to experts. In the absence of proper wastewater management, urban centres are drawing water from rural areas hundreds of kilometres away.

“The tension between urban and rural India is going to escalate unless we find ways to reduce urban demand,” says Sunita Narain, who is chairing the Planning Commission panel looking at framing new strategies for urban water management. The panel’s interaction with various municipalities and water authorities has revealed that there are many cities like Delhi, where 45 per cent of water supplied is unmetered or lost in distribution. In Bhopal and Surat, barely 1.5 to 0.4 per cent of water supply is metered.

No wonder cities are facing shrinking water supplies and fast-plunging groundwater. They also have depleting funds to undertake proper handling and treatment of sewerage. Despite having raised the tariff more than once in the last decade, Delhi Jal Board’s minimum rates for domestic connections at Rs 2 per kilolitre remain among the lowest in the country—the minimum rate in Bangalore is Rs 6/kl. Most cities are not recovering their costs of supplying water.

“If we pay the right price, we can demand that the institutions (handling water supply) plug the leakages,” says S. Vishwanath of the Bangalore-based Rainwater Club. Studies in Bangalore have revealed that while the poor are willing to pay metered charges, they’re unwilling to pay upfront high charges for water connections. Under the Jawaharlal Nehru National Urban Renewal Mission and World Bank-funded projects, several cities have seen tariffs go up in the past five years. Positive results are showing in cities like Hooghly, Dharwad, Belgaum, Gulbarga, Mysore, Navi Mumbai and Nagpur. But the whole process has to be more transparent, feels Vishwanath.

These funded projects apart, there is no real effort to address the many problems plaguing the water sector. In fact, no state has a clear-cut water and sanitation policy, let alone a pro-poor one ensuring water for all. This is the lacuna the Planning Commission hopes to plug with a proposal for a National Water Commission to monitor all projects, particularly those with provisional clearances.

Of course, the states will have to play ball—and this could take aeons. For instance, a start was made in Maharashtra, but the new legislation would dilute the regulatory authority. As far as existing water institutions are concerned, they lack the expertise or manpower for proper monitoring. “For meaningful monitoring, there has to be a deep-rooted structure with proper empowerment of local bodies and citizens,” points out Shripad Dharmadhikary of the Manthan Adhyayan Kendra in Badwani, MP.

Another major reform move being mulled over by the plan body—currently in consultation with various expert groups, including civil society organisations—is to chalk out a policy for industrial and commercial use of water. This could effect a substantial hike in commercial rates. Last month, Orissa witnessed considerable industrial opposition to a 750 per cent hike in commercial rates.

In general, experience in states like Andhra Pradesh has shown that tariff hikes are accepted even in rural areas if bundled with better quality water and supply. “Urban rates have been going up but people are accepting them without a great deal of opposition,” says Himanshu Thakkar of the South Asia Network on Dams, Rivers & People. Thakkar is among those who feel commercial rates should be much higher because it would help in cross-subsidising the urban poor.

The absence of a legally binding obligation for the government to supply good quality water stymies equitable distribution of water resources, say experts. So, within the same city, some consumers get as little as 20 litres per day while others hog 400 litres a day. As the Planning Commission works towards fine-tuning its reforms package, be prepared to pay more as the planners feel low cost leads to wasteful and excessive use. After all, it’s not just industry but you and me too who’re guilty of misusing scarce water.