Business Today

A clear priority

E. Kumar Sharma        Print Edition: Jan 8, 2012

Mandavgan Pharata is a village on the banks of the Bhima river in Maharashtra, just 70 km from Pune city. Its idyllic appearance belies the fact that the water is polluted with excess fertiliser from cane fields and effluents from sugar factories. Not long ago, villagers travelled six km or more every day to fetch drinking water. But this is now changing, as a community water project that became operational in early 2011 has increased access to potable water. Water is purified by reverse osmosis to remove chemicals such as copper sulphate and phosphorus.

Local residents say they do not mind paying Rs 5 for 20 litres of drinking water. The gains in terms of health are substantial. Dr Manjusha Satpute, a medical officer at the local primary health centre, says the number of cases of diarrhoea, jaundice and kidney stones has dropped. "Diarrhoea is down from around 45 cases to about eight a month," she says.

Water pollution is so widespread in India that access to clean drinking water has long seemed a pipe dream. However, in the past five years, state governments have changed their approach, and the private sector has become more aggressive. States such as Andhra Pradesh, Haryana, Karnataka and Punjab are entering publicprivate partnerships that require consumers to pay. Other states are following suit. Their governments have been inviting tenders, and about half a dozen nationally known private companies and not-for-profit organisations are at the forefront.


Earlier, planning for water projects focused on capital expenditure. 'User pays' models factor in operating expenses, too.


As a result, today there are at least 2,500 community water projects, covering about nine million people in 5,000 villages. Almost none of these people had an assured supply of clean water five years ago. This progress may sound substantial, but it is a drop in the ocean. An estimated 720 million Indians in 600,000 villages have no access to clean drinking water.


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The cost of setting up a community-based water project varies between Rs 2 lakh and Rs 12 lakh, depending on population and contamination levels. If one were to set up 300,000 projects at an average cost of Rs 5 lakh each, the total cost would be some Rs 15,000 crore, which looks achievable. The estimate is just for capital expenditure; operating expenses are typically in the range of Rs 10,000 to Rs 20,000 a month. Such projects can be made sustainable if users pay for the water.

The key change in state governments' approach has been to partner with the private sector. Until five years ago, community water projects promised access but not quality, because the focus was only on capital expenditure. But maintenance and sustainability are now integral to projects, which are designed with local involvement and through publicprivate partnerships. What is needed next is an increase in the pace of change. A rapid scale-up, of course, has its own dangers.

The biggest, perhaps, is the populism of politicians who want water to be given away free. India has no choice but to address the issue of clean water. The statistics are scary: the aggregate demand-supply gap is projected at 50 per cent by 2030, driven by agricultural, municipal and household demand, according to a report of the 2030 Water Resources Group, whose members include McKinsey and the International Finance Corporation.

One way to step up the pace of change may be to give water the importance it deserves. A good place to start is to appoint fulltime ministers. Currently, Pawan Kumar Bansal, the Union Minister for Parliamentary Affairs, holds additional charge as the minister for water resources, and Minister for Rural Development Jairam Ramesh holds the additional charge of drinking water and sanitation.

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