SUSTAINABILITY ISSUES IN THE INDIAN WATER SECTOR Mukul Kulshrestha* and Atul K.

Mittal** *Research Scholar, Indo-French Unit For Water and Waste Technologies (IFUWWT), Department of Civil Engineering,
Indian Institute of Technology, Delhi, INDIA 110 016 (e-mail: mukul_kuls@hotmail.com) **Coordinator, Indo-French Unit For Water and Waste Technologies (IFUWWT), and Assistant Professor, Department of Civil Engineering, Indian Institute of Technology, Delhi, INDIA110016

ABSTRACT The Indian water sector has recently initiated reforms that encompass creation of enabling framework for institutional strengthening; change of government policies to effect commercialization such as tariff rationalization and transparent administration of subsidies; and framing policies for ensuring improved water management. This paper endeavors to spell the reform initiatives in the context of the sector constraints and challenges faced in India. The paper lays special emphasis on the sustainability aspects of the sector as India today stands at a crucial juncture and any policy decisions will affect more than a billion people. In this context, the paper also discusses some of the strategies adopted in the policy documents of the government of India to ensure sustainability in the sector. The paper lays special emphasis on the water supply spelled as a priority in the new Water policy 2002,that endeavours to spell a paradigm shift in the Indian water sector. Key words: Indian water sector, reforms, sector constraints and challenges, policy , sustainability, Water policy 2002. INTRODUCTION South Asia holds the swing vote whether the Millennium Development Goals can be reached by 2015. South Asia has 40 percent of the problem, which it means it has 40 percent of the solution South Asia has a special place partly because of its sheer size; it is the place where 40 percent of the population lives on less than a dollar a day, and where 35 percent of children do not get proper primary educationSo this region is most going to drive whether we reach the targets or not: UNDP Administrator Mark Malloch Brown (IPS, 2003) The South Asia region is home to more than 200 million people lacking access to safe drinking water and 800 million without proper sanitation service (Davis, 2004) and faces some of the lowest per-capita freshwater availability in the world. India is the major player in the South Asian region and it alone overshadows all other nations in the region combined together, due to its sheer size and population. Therefore, India has a big role to play if international targets are to be achieved. This realization reinforced by the sub-optimal performance of services has been mainly responsible for the recent focus on the Indian water sector by international agencies and critical evaluation of the status internally by the government. There has been a general consensus that the Indian water sector has been misgoverned for years and hence the sector reforms have been necessitated. This paper deals with some of the aspects that affect sustainability of the Indian water sector with emphasis on the water supply sector in conformity with the New Water Policy, 2002, of the government of India that accords the highest priority to the drinking water. THE INDIAN WATER SECTOR India possesses 16% of the worlds population but just 4% of its water resources (Planning Commission, 2001). Indias irrigated agriculture sector has been fundamental in its economic development and poverty alleviation. The rapid expansion of irrigation and drainage infrastructure has been one of Indias major achievements. From 1951 to 1997, gross irrigated areas expanded fourfold, from 23 million ha to over 90 million ha and irrigation continues to be the single largest use of freshwater in India accounting for more than 90% of water consumption. However, this achievement has been at the cost of groundwater depletion, water logging and increasing salinity levels affecting large areas. Indias finite and fragile water resources are stressed and depleting, while sectoral demands (including drinking water, industry, agriculture, and others) are growing rapidly. At Independence in 1947, Indias population was less that 400 million with per capita water availability over 5,000 cubic meters per year. While population has grown to over a billion now, the per capita water availability has fallen to barely 2,000 cubic meters per year and the actual usable quantity is around 1,122 cubic meters per
Mukul Kulshrestha and Atul. K. Mittal (2004), " Sustainability issues in the Indian Water sector , Proc. International Specialty Conference on Good Water Governance for People and Nature: What Roles for Law, Institutions, and Finance?, American Water Resources Association and International Water Law Research Institute (IWLRI), University Of Dundee, Dundee, 29 August 1 September, 2004, Scotland, UK 1

year. So increasing population has led to stress on availability of water. Significantly, environmental problems have emerged such as water quality degradation from agro-chemicals, industrial and domestic pollution, groundwater depletion, water logging, soil salinisation, siltation, degradation of wetlands, ecosystem impacts, and various health-related problems. High extraction of ground water has given rise to compounded Arsenic and Fluoride contamination and Saline Ingress. All this has resulted in declining per capita water availability and deteriorating quality. Intersectoral allocations, planning and management of increasingly fragile water resources have thus emerged as a major challenge. Between 69-74% of Indias rural population take their drinking water from protected sources, leaving an unserved population of 26-31%. Between 91-93% of Indias urban population take their drinking water from protected sources, leaving an unserved population of between 7-9%. Only 70% of the people in urban areas have access to basic sanitation services. A large number of rural habitations remain without any identified source of safe drinking water. Groundwater tables are receding, rivers are silting up, and leaching of chemical fertilizers is polluting drinking water supplies. The rising consumption will further aggravate water scarcity as population, food production, industrialization and living standards continue to rise over the next two decades. The total water consumption in India is expected to rise by 20-40% over the next 20 years (Planning Commission, 2002). SECTOR PROBLEMS AND SHORTCOMINGS India is undergoing rapid urbanization (Figure 1). It is estimated that by 2025, more than 50% of the countrys population will live in cities and towns and thus the likely demand for infrastructure facilities is expected to rise sharply posing a challenge to urban planners and policy makers. Role of Multiple agencies in diluting responsibility: A plethora of organisations play role in managing water. The Central Water Commission (CWC) in the Ministry of Water Resourses (MoWR) has responsibilities for regulating use of surface water for irrigation, industry and drinking water purposes and in mediating inter-state water allocation disputes. The Central Groundwater Board (CGWB) of the same Ministry has an overseeing responsibility for monitoring of groundwater levels, as well as production of water resource inventories and maps. The National Rivers Conservation Directorate (NRCD) under the Ministry of Environment and Forests (MoEF) oversees implementation of Action Plans to improve the quality of the nations rivers. The Central Pollution Control Board (CPCB) promotes basin-wide pollution control strategies and liaises with State Water Pollution Control Boards and lays down standards for treatment of sewage and effluents. Other government agencies involved either directly or indirectly with water supply and sanitation in India include the Ministry of Agriculture (MoA), which is involved in planning, formulation, monitoring and reviewing of various watershed based developmental project activities, the Ministry of Urban Development (MoUD) which is the nodal Ministry for policy formulation and guidance for the Urban water supply and sanitation sector. The Ministrys responsibilities include broad policy formulation, institutional and legal frameworks, setting standards and norms, monitoring, promotion of new strategies, and coordination and supporting State Programmes through institutional expertise and finance. The Ministry is also responsible for managing international sources of finance. The Central Public Health and Environmental Engineering Organization (CPHEEO), created in 1953, is the technical wing of the MoUD, which advises the Ministry in all technical matters and collaborates with the State Agencies about water supply and sanitation activities. CPHEEO also plays a central role in setting design standards and norm setting for urban water supply and sanitation. As many as 8 agencies are involved in collecting data on the following water-related parameters: quality of surface water, ground water quality, monitoring of drinking water quality, sanitation and drinking water supply. Such a scenario of fragmentation at the central and state levels, results in duplication and ambiguity of functions and hinders effective fixing up the responsibility of failure to implement stated policy. The situation becomes more complicated because co-ordination between various agencies is often missing. Not all states have Water policies: Water being a state subject, the states are empowered to enact laws or frame policies related to water. Even then, only some of the states have set up organizations for planning and allocating water for various purposes. Though water policy for the country has been prepared by the MoWR, only few of the states have their own respective state water policies. Unregulated Groundwater withdrawals: A proper legal framework for regulating withdrawals of groundwater is not in place. Though efforts have been made to check the overexploitation of groundwater through licensing, credit or electricity restrictions, these restrictions are directed only at the creation of wells. Even the licenses do not monitor or regulate the quantum of water extracted. For water supplies, this spells problems due to the rapidly falling ground water levels and pollution of aquifers.

Mukul Kulshrestha and Atul. K. Mittal (2004), " Sustainability issues in the Indian Water sector , Proc. International Specialty Conference on Good Water Governance for People and Nature: What Roles for Law, Institutions, and Finance?, American Water Resources Association and International Water Law Research Institute (IWLRI), University Of Dundee, Dundee, 29 August 1 September, 2004, Scotland, UK

Data Availability: Knowledge/information/data gaps also plague the sector. Data is not readily made available and is many times not recorded and maintained. The lack of reliable and dependable information on water services and databases at local, state, and central level imply that there is very little actual basis for planning improvements. Issue of Coverage: There is considerable skepticism about the accuracy of government figures on coverage. The definitions in use tend to be static, so that once a community has been served it is considered covered, regardless of later population growth or the current conditions of the facilities or status of water table. Hence, the use of coverage targets inevitably leads to some overstatements of accomplishments and understatements of targets to cover the gaps. Low tariffs :The Root of The Problem: The major problems in the water sector in India can be delineated to be originating from poor governance that allows and expounds unreasonably low tariffs. For water sector the consequences have been significant: low coverage, poor O&M practices, and low staff morale. Low tariffs are often justified on the ground that water is a social good and that the poor cannot afford to pay high tariffs. The poor often end up paying far more than their fair share since small vendors charge exorbitantly for the water sold and the poor have to pay 10 to 20 times ( Planning Commission , 2001) the cost of water from piped supplies for getting water of dubious quality. The resultant subsidies to compensate low tariffs benefit mainly those who are not poor since the poor either do not use the piped supplies (for example in India 60% of the poor do not have access to private connections (PPIAF, WB, WBI AND WSP (b) (2002)) or the poor have far too small consumptions so that larger users who are economically well off, seize most of the subsidies. Inadequate tariffs also lead to: low service coverage, as the utilities do not find enough resources to expand services. The result is that the poor are invariably left out. poor O&M conditions for the existing infrastructure. An important measures of the poor O&M state is the large Unaccounted for Water (UFW) defined as the difference between the water supplied and water billed (or sold).UFW ranges around 16% (mean) for the developed countries, and is 23% for the top 25% of utilities in the developing countries (Tynan and Kingdom, 2002). In comparison the Indian cities fare poorlypreliminary assessments indicate that the percentage of UFW in Indian cities is in the range of 50% (FIRE(D),2000). intermittent supplies- most utilities supply intermittently for durations ranging from 2-8 hours (Shukla,1999). This obviously implies greater costs as pointed by Yepes et al (2001), who have demonstrated that the cost of intermittent services exceeds that of continuous services if consumers coping costs are included. Most municipalities operate with net financial losses. In only a few cases are revenues sufficient to cover operating costs, much less depreciation and borrowing charges. The combination of inadequate revenues and poor procurement, construction and maintenance practices has led to low operating efficiencies.

Subsidies: In most of the cities, production cost of water is much higher than the amounts billed to most consumers so that most consumers connected to the network get subsidy (Figure 2). Poor do not either have connections, since connection costs are barriers, and therefore, pay high rates to local vendors or are connected via shared connection, and hence end up paying high tariff charges since the consumption goes up for the shared connection due to large number of users. Subsidies for domestic water in India are at present, extremely large, spread very widely, ineffective in helping the poor, and mainly an advantage to the better off. This is a result of the lack of a detailed understanding of the effect of high subsidies on individual incentives. Any subsidy quickly becomes and entitlement for those who benefit, and the group of those considering themselves entitled to the subsidy grows rapidly. The unfortunate result is that, in India today, most people continue to feel that the government should subsidize the cost of their water consumption.

Willingness to pay but unwillingness to charge : A number of studies such as WSP (1999) have found that a large proportion of households (up to 80%) are found willing to pay more than the prevailing tariffs in exchange of securing better services. In a Capacity building and learning initiative the PPIAF, WB, WBI AND WSP (2002a) have concluded that families living under poverty line can still afford to pay approximately up to 4 times the current typical water charges levied, and even this 4-fold increased tariff will be almost 2.5 times short of recovering just the O&M costs. This indicates the necessity of restructuring tariffs to realistic levels.

Mukul Kulshrestha and Atul. K. Mittal (2004), " Sustainability issues in the Indian Water sector , Proc. International Specialty Conference on Good Water Governance for People and Nature: What Roles for Law, Institutions, and Finance?, American Water Resources Association and International Water Law Research Institute (IWLRI), University Of Dundee, Dundee, 29 August 1 September, 2004, Scotland, UK

THE POLICY OF REFORMS Recognising the problems with the water sector, major policy reforms have been initiated or proposed. The Tenth Plan of the Planning Commission,2002-2007, has put forward several fiscal incentive measures to promote reforms in the urban water services such as the City Challenge Fund and the Pooled Finance Development Fund. The aim is to prompt Urban Local Bodies (ULBs) to become viable, credit-worthy entities to access market funds. The Plan also proposes the Urban Reforms Incentive Fund to encourage ULBs to take up financial strengthening and reforms and better enforcement of user charges, taxes, etc. Improving efficiency of existing systems/schemes is being advocated by conducting diagnostic studies of operational status, reviews of practices in management and finance, assessments of investment needs in terms of restoration, renovation and augmentation. Once implementation of efficiency enhancement measures is underway and viability is established, financial strengthening schemes could be availed to further enhance efficiency and creditworthiness. The Tenth Plan also envisages 100% coverage of rural and urban population with safe drinking water as per the stipulated norms and standards (40 lpcd of safe drinking water within a walking distance of 1.6 Kms or elevation difference of 100 meters in hilly areas, to be relaxed as per field conditions; at least one hand pump/spot source for every 250 persons). Water conservation in urban areas forms a major thrust area and several measures are proposed, including tariffs at appropriate levels to discourage excessive use, mandatory water efficient systems for flushing, reducing leakages and unaccounted for water, reuse and recycling of sewage, rainwater harvesting, etc. The Plan further envisages establishment of a nationwide quality monitoring and surveillance system, evolution of cost effective and socially acceptable operation and maintenance (O & M) strategies, and reorienting the structure and functioning of rural water supply planning and implementing agencies to ensure sustainability. The Plan advocates management of water as an economic asset rather than a free commodity and places responsibility for source regeneration on all user agencies to ensure comprehensive development of water resources. In line with the increasing recognition that centralized, government controlled, and supply driven approaches need to be changed to more decentralized, people centric and demand responsive approaches has led to the inception of the Sector Reforms programme. This major paradigm shift in thinking and policy for the rural areas , incorporates the principles of (a) Adoption of demand responsive approaches based on empowerment, to ensure full participation in decision making, control, and management by communities, (b) Shifting the role of governments from direct service delivery to that of planning, policy formulation, monitoring and evaluation, and partial financial support, and (c) Partial capital cost sharing, in either cash or kind or both, and 100 percent responsibility of O & M by users. Broadly, the reform strategies include decentralization; commercialization or corporatisation of existing institutions; enhancement of technical and managerial capabilities; unbundling or rebundling of functions if ULBs; institutional restructuring; changing role of government from service provider to regulator and facilitator; appropriate forms of private participation and public private partnerships; benchmarking for performance, and evolution of a sound sector policy. Decentralization strategies are accompanied by reforms that include development of good practices in municipalities, especially in the areas of accounting, auditing and procurement, the professionalising of municipal management, removal of monopolies to state owned providers to encourage competition, corporatisation of dis-aggregated entities (privatization in some cases), full autonomy to ULBs, and adoption of institutional capacity building. Financial reform strategies will now increasingly include direct market access to service providers, better access to capital markets, credit enhancement facilities, utilization of public funds to further reform initiatives (thereby enabling ULBs to leverage market funds) and improved accounting based on double entry based accrual systems are also being advocated. Tariff reform strategies include rational water pricing on volumetric basis to encourage conservation and planned achievements of cost recovery via rationalized pricing (thereby generating internal funds for infrastructure improvements and enhancements). Several options for private sector participation and public private partnerships are also being increasingly facilitated. Increasing emphasis on use of information technology applications in urban governance and management to ensure quick access to information, planning and decision support systems (such as GIS), public domain access to all relevant information is also being advocated. National Water policy 2002: A new National Water Policy was adopted in 2002, according primacy to drinking water, as in the earlier policy. Some states such as Karnataka, Madhya Pradesh, Orissa, Rajasthan and Tamil Nadu have already drafted state policies based on the new national policy. The National Water Policy, 2002, formulated by the Government of India (GoI) incorporates several changes from the earlier water policy of 1987. It recognizes the need for welldeveloped information systems at the national and state level, comprising of standardized networks of data banks and databases as a prerequisite for resource planning. The policy places strong emphasis on non-conventional methods for utilization such as inter-basin transfers, artificial recharge, desalination of brackish or sea water, as well as traditional water conservation practices such as rainwater harvesting, etc to increase utilizable water resources. It also advocates
Mukul Kulshrestha and Atul. K. Mittal (2004), " Sustainability issues in the Indian Water sector , Proc. International Specialty Conference on Good Water Governance for People and Nature: What Roles for Law, Institutions, and Finance?, American Water Resources Association and International Water Law Research Institute (IWLRI), University Of Dundee, Dundee, 29 August 1 September, 2004, Scotland, UK 4

watershed management through extensive soil conservation, catchments area treatment, preservation of forests and increasing forest cover and the construction of check dams. The policy recognizes the need to reorganize and reorient institutional arrangements for the sector and emphasizes the need to maintain existing infrastructure. The policy further addresses issues such as planning of water resource development projects, maximizing water availability, water pricing, water quality, water zoning for proper management of resources and other issues. Community participation in management of water resources, appropriate pricing for water, tackling of pollution of surface and ground water bodies, and encouragement to the private sector to invest in water resources development are also emphasized. What is now required is to operationalize the policy by preparing state level policies and drawing up action plans to implement the various recommendations.

WATER RELATED SUSTAINABILITY ISSUES BEFORE INDIA Subsidies: Total subsidies for domestic water supply in India are currently about Rs 40 billion a year. Of that amount, roughly Rs 12 billion goes to urban water systems, and Rs 25-30 billion to rural schemes (half from the central government, and half from the states). The actual beneficiaries of this subsidy are those who receive some sort of water services-clearly people who do not get services do not benefit from the subsidy, regardless of how much is spent. In rural areas, it is generally the better-off who live close to good water sources, while the poor have marginal land and less reliable sources, and suffer most from falling water tables, seasonal variations, etc. In urban areas, most of the subsidies also benefit the non-poor, who typically pay far less than the real cost of the water they consume. Therefore, there is a need to target the subsidies well. Water being a state subject, pricing is done by the state governments and water prices vary from state to state. With water demand in the agricultural sector as high as 95% of total demand and no proportions between the water rates and consumption patterns, water usage efficiency is only 3035%. Such poorly targeted subsidies send the wrong signals to users causing a wasteful use of resources and suboptimal choices by consumers. India has significant income disparities and therefore, subsidies must be designed to make the water services affordable to the poor by directing them appropriately and transparently so that the user knows the extent to which he is being subsidized. Reconciliation of these objectives remains an elusive task, but is nevertheless a cherished goal for any government to ensure sustenance of the water sector. Cross-subsidies can also play a useful role if properly administered. Tariff Design: Paradoxically, the very policies that were designed to help suppliers provide water cheaply to the poor have resulted in financial and operational mismanagement by suppliers so that they provide inadequate and inefficient services. This is so because tariff design is not based on factual data and the various tariff blocks are not evaluated for effectiveness. There is a significant lack of information in Indian cities relating to the profile of consumers in each tariff block, the volume of consumption in each block, number of people sharing connections and the number of people unconnected to the network. Tariff structures are designed to operate cross subsidy between high volume consuming households and low volume consuming households. Often the domestic and agriculture sector are cross-subsidized heavily by industrial and commercial users. This coupled with the fact that several states like Haryana often provide free electricity for irrigation pumps, often provide undesirable incentive to the agriculture sector to use large-scale groundwater or to the domestic consumer who does not understand that he is being subsidized and does not conserve water accordingly. This causes the large industries to exit from the municipal services and instead develop their own sources of water including recycling of used water as has happened in Bangalore (WSP, 1999) Employment policies: Overstaffing is widely prevalent in Indian water services. In a survey of 4 cities in North India, Kulshrestha et al (2004) found that ratio of staff per 1,000 service connections ranges around 10. In contrast, researchers such as Tynan and Kingdom, 2002, have shown that the developed counties have a staff per 1000 water connections mean value of 2.1 and the top 25% of utilities in the developing countries have 5 or less staff per 1000 connections. These values assume significance, since for several utilities rapidly increasing real wages are the major contributory factors for unsustainable personnel costs (Yepes and Dindares, 1996). Such high ratios indicate profligate employment practices in the region that may arise either due to flawed policies or political interference in the working of water utilities and indicate misgovernance. Need for coordination with health and education authorities : While massive inputs have been made by the Government to supply potable water in urban as well as rural areas morbidity due to water-borne diseases has not declined commensurate with increasing finances and efforts largely owing to the fact that quality of water is not maintained at consumer point and that safe water may become contaminated during storage due to poor handling practices and poor personal hygiene. This is the result of not adopting 24 hours supplies. Intermittent supply is not merely an inconvenience for consumers, it also provides opportunities for contamination of drinking water; this is also amply proven by the water related diseases morbidity data which has virtually remained the same over the entire
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Mukul Kulshrestha and Atul. K. Mittal (2004), " Sustainability issues in the Indian Water sector , Proc. International Specialty Conference on Good Water Governance for People and Nature: What Roles for Law, Institutions, and Finance?, American Water Resources Association and International Water Law Research Institute (IWLRI), University Of Dundee, Dundee, 29 August 1 September, 2004, Scotland, UK

decade of 1990s despite increasing investments over the years (Figure 3). This may be attributed to water and sanitation programmes operating in isolation from programmes in health and education and reflecting the fact that water and sanitation is not pursued with the aim of reducing disease, improving hygiene, improving educational levels or reducing poverty. It is important that urban and rural water agencies operate hand-in-hand with their health and education counterparts to jointly monitor indicators of health, education, poverty, and equity in order to make significant headway in the respective sectors. With the new policy agendas in these sectors, such intersectoral collaboration is now possible, more than ever before. Provide incentives for efficient water use: Subsidized or free supply of power and water has resulted in overexploitation and inefficient use of water in agriculture, leading to water-logging and salinity on 5.76 million hectares. Tremendous wastage occurs as a result of evapostranspiration, distribution losses, seepage through unlined channels and excess application. Canal-irrigation efficiency in India is estimated at around 35-40%, which is below international standards. Government policies need to be revised to provide incentives for efficient use of water, including appropriate water pricing and more effective institutional mechanisms for water management. Role of Government: It is essential that the governments progressively and steadily modify their roles and move away from being service providers to become regulators. This would increase the autonomy of the utilities and would automatically bring in accountability and competition in a market situation. Need to build transparent database for introducing the concept of efficiency: There is an urgent need for a comprehensive, reliable, cross-sectoral, continually updated system for collection and analysis of water metadata, including the financial information. Such a metadata system can be complemented by use of dedicated GIS based planning tools and decision support systems. Sustainability is Important: Coverage, meaning the provision of services has been largely emphasized, even while ignoring the considerations of sustainability of the infrastructure in place. Besides creating additional water resources facilities, adequate emphasis needs to be placed for ensuring physical and financial sustainability of existing facilities. Upgrading the quality of personnel: Another major area of introducing reforms could be the training and upgrading the quality of the personnel related to water services, so that they could keep abreast of the scientific and technological developments in their area of work .There already exists a programme wherein the Public Health Engineering (PHE) departments trains 108 in-service engineers every year through 11 postgraduate courses in engineering, while the CPHEEO arranges various Short Term Courses. However the programme needs to be carried out at a much accelerated pace if the real benefits of developments in technology are to be passed on to the site engineers and technicians. Need for international investments and Private sector Participation: The government spends huge amounts on water, to the order of Rs 40 billion a year currently about Rs 25 billion for rural and about Rs 16 billion for urban water. The recent joint review of water resources management by the Government of India and the World Bank arrived at rough estimates of recurrent expenditure and investment needs. For water in rural areas, the annual requirement just for adequate O&M is estimated at Rs 29 billion. The investment requirement is over Rs 200 billion to rehabilitate and repair all existing schemes and fill in gaps where necessary, and an additional Rs 450 billion to bring the whole rural population to the full coverage standard of 40 liters per capita per day within a distance of 1,600 meters. For urban areas, the report assumed that O&M costs would be covered by appropriately increased tariffs, and included an estimated investment requirement for water supply schemes of Rs 284 billion over five years. It is evident that such huge public funds are not likely to be available to cover these needs.The same report also estimated rural O&M needs at Rs 29 billion a year noting that current and prospective funding for this purpose was to the order of Rs 2.5 billion a year, less than one-tenth of the requirement. And the urban report projected that about Rs 30 billion would be available annually for both water and sanitation following past patterns, that would mean about Rs 15 billion a year for water supply. Even the lowest estimate of requirements is four times this amount. It is certainly not possible for the government to increase funding to the required level. Hence it is necessary that international aid be sought and private parties be encouraged to invest in the sector. Such participation may also help in introducing innovative ideas, generating financial resources and introducing corporate management and improving service efficiency and accountability to users. However, it must be noted that commercially unviable urban local bodies imply that fresh investments by external agencies and private sector will not be forthcoming. The recent policy provisions for financial strengthening and improving creditworthiness are therefore very significant and should be used by the local bodies. River basin approach for water management: With water being a subject under the state list, the present approach to water-related matters restricts the issue only to political boundaries, involving a number of agencies and ministries with overlapping responsibilities. Instead a river basin or sub-basin-based approach to water management could be
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Mukul Kulshrestha and Atul. K. Mittal (2004), " Sustainability issues in the Indian Water sector , Proc. International Specialty Conference on Good Water Governance for People and Nature: What Roles for Law, Institutions, and Finance?, American Water Resources Association and International Water Law Research Institute (IWLRI), University Of Dundee, Dundee, 29 August 1 September, 2004, Scotland, UK

much more effective. This would avoid the fragmented approach involving multiple agencies and would ensure that aspects such as water allocation, pollution control, protection of resources, and mobilization of financial resources are not dealt in isolation, and decisions on the overall development process and land-use planning flow from this. Need for water management in fringe urban areas: Traditional community-oriented solutions are difficult among recent migrants who settle in slums or city outskirts as they do not constitute a community; peri-urban areas are populated by large numbers of migrants from rural areas, hence community approaches are unlikely to work. And because peri-urban sector services are a relatively new area of concern, municipal water agencies are often particularly unaware of how to implement and how to finance decentralized solutions in these areas. There is therefore, a need for focussed programme on slum development as urbanization unfolds.

CONCLUSIONS Indian water sector today is very crucially poised in view of the recently formulated Millennium Development Goals related to water and sanitation, the international targets defined by the United Nations. Water policies implemented today will have a large bearing on whether these global targets are finally met or not, and will have decisive heath and poverty implications for more than a billion people. It is, therefore, vital that policies be planned, drawn, implemented, monitored and evaluated with utmost precision to ensure that the Indian water sector retains sustainability for the future generations.

REFERENCES Davis Jennifer. (2004). Corruption in Public Service Delivery: Experience from South Asias Water and Sanitation Sector, World Development, 32 (1) 5371 IPS.2003. DEVELOPMENT: South Asia Holds the Key to Millennium Goals. Inter Press Service News Agency, London , 08 July, 2003 Kulshrestha M., Umesh Bharadwaj and Atul. K. Mittal, (Accepted), " A Generic Approach To Benchmarking of Water and Sanitation Utilities, World Water & Environmental Resources Congress 2004,The Environmental Water & Resources Institute Of The American Society Of Civil Engineers (ASCE), June 27 -July 1, 2004, Utah FIRE(D)(2000) Measures to Address UFW Improving the Operation of Urban Water Supply Systems in India: A Discussion of Unaccounted for Water, Note No. 23,November 2000 Project Notes Planning Commission India. 2001.Indian Planning Experience : A statistical profile, Government of India Planning Commission.2002.Report of the Committee on India Vision 2020,Government of India PPIAF, WB, WBI and WSP (a) (2002). Water Tariffs and Subsidies in South Asia: A scorecard for India, Paper 2,Public private Infrastructure Advisory Facility, World Bank, World Bank Institute and the Water and Sanitation Program, December 2002 PPIAF, WB, WBI and WSP (b)(2002). Water Tariffs and Subsidies in South Asia: Do current water subsidies reach the poor India, Paper 4,Public private Infrastructure Advisory Facility, World Bank, World Bank Institute and the Water and Sanitation Program, December 2002 Shukla R.S. (1999) Urban Water Sector Beyond 2000 AD, Journal of Indian Water Works Association, Vol. XXXI No.3 Tynan N. and Kingdom B. (2002) A water Scorecard, Note No 242, Viewpoint Public policy for the Private Sector , Private Sector And Infrastructure Network ,The World Bank Group WSP.1999. Water for Indias Poor: Who Pays the Price for Broken Promises? UNDP-World Bank Water and Sanitation Program South Asia Yepes G. and Dianderas A. (1996). Indicators, Water And Wastewater Utilities 2nd ed, Water and Sanitation Division of the Transportation, Water and Urban Development Department, TWUWS, Published informally by International Bank for Reconstruction and Development, World Bank. Yepes G, Ringskog K and Sarkar, S. (2001) The high cost of intermittent water service, Journal of Indian Water Works Association, Vol. XXXIII No.2
Mukul Kulshrestha and Atul. K. Mittal (2004), " Sustainability issues in the Indian Water sector , Proc. International Specialty Conference on Good Water Governance for People and Nature: What Roles for Law, Institutions, and Finance?, American Water Resources Association and International Water Law Research Institute (IWLRI), University Of Dundee, Dundee, 29 August 1 September, 2004, Scotland, UK 7

60 50 40 30 20 10 0 2021(projected) 1981 1991 2001

Urban Population ( 10 millions) percentage of urban population Number of cities with population more than a Million

Figure 1. Urban Demography in India (Data Source: CPHEEO and Census of India)

14,00 COST (Rs.per cu.m) 12,00 10,00 8,00 6,00 4,00 2,00 0,00 Bangalore Chennai CITY Production cost lowest domestic tariff second lowest domestic tariff Hyderabad

Figure 2. Water costs and Tariffs in Indian Cities

Mukul Kulshrestha and Atul. K. Mittal (2004), " Sustainability issues in the Indian Water sector , Proc. International Specialty Conference on Good Water Governance for People and Nature: What Roles for Law, Institutions, and Finance?, American Water Resources Association and International Water Law Research Institute (IWLRI), University Of Dundee, Dundee, 29 August 1 September, 2004, Scotland, UK

Diarrhoea 12000000 10000000 Morbidity 8000000 6000000 4000000 2000000 0 1989 1990 1991

Enteric Fever

Viral Hepatitis

Cholera

1992

1993

1994

1995

1996

1997

Year

4.8 4.6 % Outlay for W&S 4.4 4.2 4 3.8 3.6 3.4 3.2 3 1985-1990 7th Plan 1992-1997 8th Plan 1997-2000 9th Plan

Figure 3. Increasing Sector Investments and Corresponding water related Morbidity levels (Data Source:Planning Commission and Directorate of Health Services, India)

Mukul Kulshrestha and Atul. K. Mittal (2004), " Sustainability issues in the Indian Water sector , Proc. International Specialty Conference on Good Water Governance for People and Nature: What Roles for Law, Institutions, and Finance?, American Water Resources Association and International Water Law Research Institute (IWLRI), University Of Dundee, Dundee, 29 August 1 September, 2004, Scotland, UK

1998