Recently, CEOs of six major global corporations, including Coca-Cola Co. and Nestle SA, pledged at a global summit in Geneva to set water-use targets, work towards progressive public policy, and make their own water management programmes transparent. Coca-Cola has also launched a water conservation programme in India this month, insisting this is not a public relations response to its growing criticism in the country for unsustainable exploitation of water resources. Even if it is indeed motivated by the need for damage control, here’s one instance where political compulsions are working as constructive drivers. On the other hand, it is political compulsions that obstruct the adoption of at least one obvious solution to the water crisis India faces—rational pricing.
The need for sustainable supply of potable water is indeed increasingly a global challenge, but for a densely populated India, with growing contamination of both surface and ground-water resources, the cost of inaction is unmistakably high. Yet, we persist with undeniably low tariffs that provide little incentive to conserve this scarce resource.
An early morning walk through the backlanes of a middle-to-upper middle class residential area in the country’s Capital will show overflowing water tanks, because residents would not have cared to switch off the pumps that pull up the water from municipal supply pipes.
Why? Because the bill at the end of the month is a fraction of what these residents could actually afford to pay. In the rural areas, flooding of fields with irrigation pumps is the common picture—on account of lack of price incentives to save water and power.
The absence of appropriate price signals also has meant the lack of scale in water reutilization efforts across industrial users. Do we then intend to rely on corporate social responsibility programmes? (Last month, Coca-Cola said that the company would replace every drop of water it uses in its beverage production at the World Wild Life Fund annual meet in Beijing). Or should we have a reliable regulatory framework that not only stipulates norms and price incentives for conservation and reutilization, but also has the capability for oversight? Surely, the problem is not one that can be solved through voluntary and sporadic efforts.
What is worrying is that we don’t see urgency on the part of the government to suitably price water so that there’s a more sustainable balance between demand and supply. And what would be a rational approach to pricing? The obvious answer is to have fees that rise with the amount of water consumed, necessarily coupled with proper metering.
The objective is to ensure that the slab-based tariff regime delivers a real incentive to rationalize consumption. Though this has been attempted, it has not delivered so far. The Bangalore Water Supply and Sewerage Board, which mainly supplies to urban households, is rated as one of the best performing water supply institutions in India, owing to its metering record and its increasing block tariff approach. But simple calculations in a recent report indicate that its pricing could be vastly improved to nudge middle class urban households to rationalize consumption.
Unfortunately, lack of political will to raise tariffs is forcing municipal water suppliers’ books into the red, leaving them little money for repairs and maintenance, or for expanding services. The corollary is that the poor don’t get access, ironically defeating a political objective. Even in the country’s Capital, the Delhi Jal Board has been cited for its poor service provision for lack of funds, while any hike in tariffs is opposed vehemently.
The political class should drop its myopic view. And urban consumers must not oppose higher tariffs, provided the additional mop-up is ploughed back into the sector.
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