[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...
[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...
[Dec 2007, Volume 4 Quarterly Issue] Pdf File size - The IIPM Think ...
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REIMAGINING INDIA<br />
the same.<br />
<strong>The</strong> process to aggressively bring LPG<br />
policies into the water sector was initiated<br />
around the mid-1990s with a key<br />
knowledge activity. Around this time,<br />
the World Bank began a comprehensive<br />
and wide-ranging review of India’s water<br />
sector – called the India Water Resources<br />
Management Sector Review.<br />
<strong>The</strong> Water Sector Review 1998 was a<br />
“sector-wide program undertaken in<br />
partnership between the Government of<br />
India and the World Bank, also with<br />
contributions from the Governments of<br />
U.K., Denmark and the Netherlands.” 2<br />
<strong>The</strong> purpose was “collectively assessing<br />
and establishing a Reform Agenda and<br />
Action plan for India’s Water Sector.” 3<br />
In 1996, a series of missions visited<br />
India, and then the World Bank team,<br />
with inputs from the Government of India,<br />
and many consultants, finalised five<br />
specialists reports 4 , dealing with<br />
(1) Intersectoral Water Allocation,<br />
Planning and Management<br />
(2) Groundwater Regulation and<br />
Management<br />
(3) Irrigation<br />
(4) Rural Water Supply and Sanitation<br />
(5) Urban Water Supply & Sanitation<br />
A sixth report, synthesising all the<br />
above was also prepared 5 . <strong>The</strong>se were<br />
first published as World Bank reports in<br />
the year 1998.<br />
This Review identified two broad issues<br />
that needed to be addressed –<br />
“Mechanisms ....for integrated treatment<br />
of surface and groundwater... and<br />
for efficiently and equitably allocating<br />
scare water resources between competing<br />
uses...[that is, inter-sector allocations].<br />
Second, reforms to improve service<br />
delivery in the water sub-sectors<br />
(i.e. irrigation, urban water supply, rural<br />
water supply...)”.<br />
For both these broad objectives, the<br />
measures suggested consisted essentially<br />
of transforming the sector to operate<br />
on commercial and market basis, and<br />
the privatisation of various activities.<br />
This agenda is being rolled out through<br />
a number of different measures. <strong>The</strong> key<br />
One of the far reaching recommendations made by the<br />
World Bank was the introduction of tradable water rights<br />
or water entitlements. <strong>The</strong> idea is this – that all (or at least<br />
some) people have a defined water entitlement<br />
mechanism to further this approach has<br />
been a series of Water Sector Restructuring<br />
loans given by the World Bank to<br />
a number of states, for example in Madhya<br />
Pradesh, Maharashtra, Rajasthan<br />
etc. 6 <strong>The</strong> reforms package implemented<br />
through the conditionalities in these<br />
loans is often supported by other loans,<br />
grants and technical assistance from<br />
Asian Development Bank, or agencies<br />
like British Government’s development<br />
assistance agency DFID.<br />
<strong>The</strong> reforms processes have the following<br />
common elements:<br />
• Unbundling (separation of source,<br />
‘transmission’ and ‘distribution’)<br />
• Independent regulator to set tariffs<br />
and decide other issues<br />
• Steeply increasing tariffs, de-politicisation<br />
of tariffs<br />
• Full cost recovery<br />
• Elimination of subsidies<br />
Cutting off supplies for non-payment<br />
• Dismantling public / community supplies<br />
like public taps, stand posts<br />
• Retrenchment<br />
• Privatisation and PPPs<br />
• Allocation of water to highest value<br />
use through market mechanism<br />
<strong>The</strong> net result of these policies is the<br />
conversion of the sector into a market.<br />
Not only is the service provision within<br />
a sub-sector (for example irrigation) to<br />
be carried out on a commercial basis, on<br />
market principles, but the inter-sectoral<br />
allocation also is to be done through<br />
market mechanisms. What are the implications?<br />
Let us examine the inter-sectoral<br />
allocation in more detail.<br />
Tradable Water Rights For Inter-<br />
Sectoral Allocation<br />
One of the far reaching recommendations<br />
made by the World Bank in the<br />
Water Sector Review 1998 was the introduction<br />
of tradable water rights or water<br />
entitlements. <strong>The</strong> idea is this – that all<br />
(or at least some) people have a defined<br />
water entitlement. <strong>The</strong>re is also a<br />
developed market of such entitlements,<br />
in which these can be sold or bartered.<br />
<strong>The</strong> economic logic is that this trading<br />
will ensure that water is allocated to the<br />
highest value user – thus ensuring<br />
efficiency of use. This is being justified<br />
as an easy way (where political resistance<br />
will be least) of inter-sectoral<br />
allocations.<br />
<strong>The</strong> Water Sector Resources Stra<br />
tegy of the World Bank, adopted in<br />
2003, states 7 :<br />
“....those requiring additional resources<br />
(such as cities) will be ...able to meet<br />
48 THE <strong>IIPM</strong> THINK TANK