survive on large operating subsidies and/or capital grants provided by the States. Achieving financial sustainability wouldrequire establishing sound principles forpricing water supply and sanitation serviceso as to meet financial, economic, equityand simplicity objectives. Aiming at fullrecovery of operation and maintenancecosts from user charges by the end of the11th Plan (2012) is probably feasible forurban service. Going beyond and contrib-uting to capital costs could be envisagedin a second phase; preliminary estimatesshow that it is likely that user chargesneeded to cover operation, maintenanceand capital costs would, as an average,be lower than those in countries with waterand sanitation sectors comparable to thatof India.The transition from today’s highly subsi-dized sector to a much less dependent onewould need to be financed in a transpar-ent and targeted manner, with any operat-ing subsidies still provided by the Stateslinked to actual improvement in the per-formance of service providers. State financ-ing programs would need to be designedto support the recovery of the urban watersupply and sanitation sector, not merely tofill gaps in infrastructure. Finally, externalfinancing needs would have to be har-nessed primarily to support implementationof new policies, institutional arrangements,and fiscal incentives, not just to rehabilitateand extend infrastructure.
Achieving Environmental Sustainability
Most cities compete with the agriculturalsector to secure surface water rights andtend to deplete local aquifers that they useas substitute sources; very few cities con-
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tribute to the abatement of pollution inreceiving bodies. To achieve environ-mental sustainability, bulk water wouldneed to be priced according to soundeconomic principles, to give consumers theright signals about the actual cost of thisincreasingly scarce commodity. Waterrights would need to be strengthened andwater rights markets developed to allowwater-starved cities an official access towater resources that are now used, ofteninefficiently, by other sectors. Groundwaterrecharge activities are required to addressthe “source sustainability” issues in “overexploited” or “critical” aquifers. Given theconflicting groundwater demand fromirrigation, industry and drinking water,there is an urgent need for State level regu-latory agencies with specific mandates forwater resource management and regula-tion of exploitation of groundwater. Waterquality would need to be protected bypaying as much attention to proper wastewater collection as to waste water treat-ment; a large share of the waste waternow generated never reaches treatmentfacilities, infrastructure would need to beplanned to achieve realistic environmentalobjectives waste water treatment to thehighest level often fails to improve the wa-ter quality in the receiving bodies enoughto be economically justified. Finally, effortsto support "collective" behavioral changetoward better sanitation practices shouldbe continued, particularly those aimed ateliminating open defecation.
Most households, forced to cope with poorquality water supply and sanitation ser-vice, spend time and money on expensiveand unsafe substitutes and on treatment forwaterborne diseases, User charges arelow by international standards, but the costof the alternatives on which users must relyfar exceeds the full cost of providing goodquality service. And while the poor may bethe intended beneficiaries of the low usercharges, they suffer most from the resultingpoor quality of service. Due to inadequateO&M and increasing numbers of partiallyfunctioning or defunct schemes, the com-munities revert to conventional substitutesthat are often unsafe. Improving the af-fordability of service would require reduc-ing costs. Cost recovery strategies wouldneed to include transparent, well-targetedsubsidies for the poor, both to help obtainconnections to service and to encouragethe consumption of a minimum quantity ofwater. It is important that communitiesliving in slums, squatter settlements andperi-urban areas have a complete under-standing of the various technology options.The selection of water supply technologyshould be determined by a number offactors, such as technical feasibility, userpreferences and requirements, combinedwith willingness to contribute towards capi-tal and O&M cost.
“The true challenge is not to increase access to infrastructure to almost 100% of the population, but to increase access to reliable, sustainable, and affordable service. India is unlikely to be able to meet this objective unless it adjusts poli- cies, institutional arrangements, and financial incentives to help improve service delivery…”
In the urban water supply and sanitationsector an important step toward buildingcapacity would be to create an identity forthe “Urban Water Supply and Sanitationindustry”. A professional association ofservice providers could play a key role indisseminating best practices, implementingfull scale benchmarking, and providingtraining and certification for sector profes-sionals. Training institutions would need toadapt then programs, currently focusedmainly on technical design issues, to thenew needs of the urban sector. And spe-cial information programs would need tobe developed for key stakeholders, i.e.,local politicians, consumer associations,and the many non-governmental organiza-tions with a special interest in water supplyand sanitation.
Source: World Bank Report on India’s Water Supply and Sanitation – Bridging the Gap between Infrastruc- ture and Service – January 2006
Note: Piped access includes pipes both within and away from the premises.Source: Census of India 1991 and 2001.
Progress and Slippage: Change in Access to Piped Water inUrban Areas between 1991 and 2001