Shankar Acharya: India's water troubles

A PIECE OF MY MIND

Official and demi-official reports from national and international organisations are a dime a dozen these days. If there is only one report you have time to read in the next three months, then I recommend "India's Water Economy: Bracing for a Turbulent Future" (IWE, for short), written by a team headed by the World Bank's senior water advisor, John Briscoe, and drawing substantially on a dozen background papers by Indian scholars and practitioners such as Ramesh Bhatia, George Varughese, Tushaar Shah, Sebastian Morris, Nirmal Mohanty and Vijay Vyas.

The final draft is available at www.worldbank.org.in. Why do I pick this report from the zillion others that float across my desk? Yes, it's cogent, well-written, marshals a tremendous range of information and analysis and puts it across in an accessible, user-friendly format.

But perhaps above all, because IWE is about water, something that affects us all...and is likely to do so increasingly as this precious fluid becomes steadily more scarce for all of India's citizens, in large part because of our collective failure to manage water systems well.

In this brief column I can't hope to do justice to the rich analysis in IWE and its well-nuanced advocacy for a charter of water sector reforms. I can only offer a "trailer" by summarising some of the key messages and themes of diagnosis and prescription that are on offer. It's no substitute for reading this excellent report.

India has always faced a severe water management challenge with its highly seasonal pattern of rainfall, resulting in 50 per cent of precipitation in just 15 days and 90 per cent of river flows in only four months. Massive investments in water storage, control and distribution were clearly warranted.

In the century or so up to around 1970, British and Indian water engineers undertook major projects of dams, canals and municipal water systems, which brought rapid economic development to the once-arid north-west India and large parts of the Deccan.

Such investments in water infrastructure spearheaded major advances in food security and hydro-power production. They also played a crucial role in generating rural development and reducing poverty, not least through enormously augmented demand for labour on irrigated farm lands.

Despite these water investments, India's dams can store only about 200 cubic metres per person, compared to around 1,000 cubic metres per capita in China, Mexico and South Africa. What's more, the likely effects of global climate change will lead to greater storage needs to manage more variable glacier melt and more variable monsoons.

One important message of IWE is a call for much greater investment in dams and reservoirs, in contrast to the World Bank's 1990s opposition to big dams (fanned partly by the shrill advocacy of a set of international and national anti-development NGOs).

The second major problem relates to the woeful maintenance of the water infrastructure assets created by 1970. For a variety of reasons (not adequately explained in IWE), the systems of maintenance and operation of public water infrastructure went into steady decline from around the 1960s.

The familiar litany of woes grew: low user charges, poor accountability, endemic corruption, massive over-staffing preempting meagre finances, and a generally bureaucratic and unresponsive approach to water users.

The mounting backlog of deferred maintenance and crumbling assets earned the Indian water investment strategy the unflattering sobriquet of "Build-Neglect-Rebuild"!

Rural and urban water problems would have assumed crisis proportions long ago but for the advent of the new "transformational technology" of tube wells around the 1960s. Faced with malfunctioning public water systems, farmers and urban dwellers switched massively to tube wells to meet their mounting water needs.

IWE estimates that today 70 per cent of irrigation needs and 80 per cent of domestic water supplies in India are met through pumping up groundwater through tube wells. But this massively deployed private response to public failure can only be temporary. Water tables are plummeting and aquifers are running dry.

Estimates show that 15 per cent of aquifers are already critical and the number is projected to rise to 60 per cent in a couple of decades. The consequences of such water stress are simply unimaginable, especially since the phenomenon of aquifer depletion is concentrated in the most populated and economically productive areas of the country. In a word, the usual Indian ploy of "muddling through" is simply unsustainable.

So what's to be done? There is no single magic bullet. But the broad outlines of a recuperative strategy seem clear. First, state agencies and water users have to work together to bring aquifer withdrawals in line with recharge. Simply passing laws and regulations won't work. They have to be buttressed by systems of tradable water entitlements, credible user associations, and a creative approach to pricing and incentives.

Second, with the obvious limitations on ground water, there will have to be much greater reliance on surface water systems, both through recuperation of existing, under-maintained systems and also through "large-scale investment in public infrastructure" of new dam systems, canals, municipal distribution networks and wastewater treatment plants.

Third, and perhaps above all, "it is going to require a dramatic transformation in the way in which public water services are provided to farmers, households and industries, in which the watchwords are water entitlements, financial sustainability, accountability, competition, regulation and entry of alternatives to government provision including cooperatives and the private sector".

If all that sounds to you like higher prices for water from formal systems, you heard right. It would be absurd to imagine that an increasingly scarce and valuable resource can be intelligently managed without significant recourse to prices and markets.

On the path to reform beware of all those well-heeled celebrities who will resist change in the name of the poor. Just remember two things: first, today's massive subsidies are enjoyed not by the poor but by those who actually consume most of the water and electricity, namely the well-off farmers and town-dwellers, including the anti-reform celebrities from up-market city areas.

Second, the poor typically pay huge prices today to water vendors and other intermediaries. Reforms which augment water supply and give some real substance to the entitlements of the poor are much more likely to benefit them.

Can the broad strategy of reform outlined by IWE actually work? I certainly hope so. Otherwise the future is too fearsome to contemplate!

The author is Honorary Professor at ICRIER and former Chief Economic Adviser to the Government of India. The views expressed are personal.