The cost of water

The cost of water

It is tempting to describe the Delhi government’s move to waive the pending water bills of consumers as a sop with polls in mind. But the move should occasion a broader debate on water pricing. The arrears for domestic consumers in the city amount to more than Rs 6,000 crore, which includes a late payment surcharge (LPSC) of Rs 3,500 crore.

Arrears for commercial consumers amount to Rs 10,000 crore, of which Rs 9,000 crore is LPSC. The surcharge would be completely cleared for domestic consumers and a rebate of 25 to 100 per cent will be offered to them, depending on the colony they live in. For commercial consumers, the LPSC would be cleared if they pay the principal amount before the deadline of November 30.

The Delhi government has clarified that the waiver is a one-time move. But the AAP government’s admission that lot of the arrears are a result “of wrong meter readings” should occasion discussion on water billing mechanisms, especially at a time when providing piped supply to all households in the country is high on the Centre’s agenda.

The Standing Committee of the Ministry of Water Resources, which submitted its report to Parliament in 2015, found that the percentage of districts with over-exploited groundwater level increased from three in 1995 to 15 in 2011.

The situation has worsened, since then. Twenty one Indian cities including Delhi, Bengaluru, Hyderabad and Chennai are racing towards zero groundwater by 2020, according to a Niti Aayog study. At the same time, about 80 per cent of rural India lacks access to piped water. In such a situation, subsidies — as well as payment-waiver schemes like the one in Delhi — are likely to draw the criticism that they work to the benefit of the well-heeled.

A water pricing policy should facilitate the extension of supply while also ensuring that the affluent do not milk the system. As per the UN’s Dublin Principle, water is an economic good and its pricing should, therefore, reflect its scarcity value. But at the same time, policy shouldn’t compromise on the principles of equity.

Since water is a state subject, charges for domestic, agriculture and industrial consumers vary across the country. But the determination of water charges for the different sectors is largely ad hoc and the processes are non-transparent. Most states have dragged their feet on the National Water Policy 2012 directive of setting up an independent Water Regulatory Authority. The Delhi loan waiver scheme should occasion revisiting this policy document.