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ADB's Water Sector Operations in India

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ADB's Water Sector Operations in India ADB’s Water Sector Operations in India Review and Way Forward Numerous challenges are plaguing the water resources sector, including diminishing water availability, growing multisector and competitive demands, deteriorating quality, overexploitation of groundwater, increased magnitude of flood, riverbank and coastal erosion, and issues related to urban and rural water supply and sanitation. Strategies and options to address these are briefly described in the paper. Beginning 1995 the Asian Development Bank (ADB) supported investments in India’s water sector to address these challenges covering South Asia operations in the agriculture and natural resources, urban, and energy sectors. The paper analyzes these issues and enumerates the possible opportunities for cooperation between ADB and the Working Paper Series government in developing and managing the country’s water resources sector. About the Asian Development Bank ADB’s vision is an Asia and Pacific region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Despite the region’s many successes, it remains home to two-thirds of the world’s poor: 1.8 billion people who live on less than $2 a day, with 903 million struggling on less than $1.25 a day. ADB is committed to reducing poverty through inclusive economic growth, environmentally sustainable growth, and regional integration. Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. ADB’s Water Sector Operations in India: Review and Way Forward Harish Kumar Varma No. 7 | October 2011 Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org/poverty Publication Stock No. WPS114086 Printed on recycled paper Printed in the Philippines ADB South Asia Working Paper Series ADB’s Water Sector Operations in India: Review and Way Forward Harish Kumar Varma No. 7 October 2011 Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines www.adb.org © 2011 by Asian Development Bank October 2011 Publication Stock No. WPS114086 The views expressed in this paper are those of the author/s and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area. The ADB South Asia Working Paper Series is a forum for ongoing and recently completed research and policy studies undertaken in ADB or on its behalf. The series is a new knowledge product and replaces the South Asia Economic Report and South Asia Occasional Paper Series. It is meant to enhance greater understanding of current important economic and development issues in South Asia, promote policy dialogue among stakeholders, and facilitate reforms and development management. The ADB South Asia Working Paper Series is a quick-disseminating, informal publication whose titles could subsequently be revised for publication as articles in professional journals or chapters in books. The series is maintained by the South Asia Department. The series will be made available on the ADB website and on hard copy. Printed on recycled paper. CONTENTS Tables, Figures, and Boxes iv Abstract v Currency Equivalents vi Abbreviations vi I. Introduction 1 II. Challenges in India’s Water Sector 1 III. ADB’s Water Policy 20 IV. ADB Investment in India’s Water Sector 21 A. Water Sector Activities in India 23 B. Review of Water Sector Lending (by sector) 23 C. Technical Assistance 26 D. Knowledge Development and Technology Transfer 28 V. The Way Forward 29 A. Near and Medium Term 30 B. Long Term 35 References 36 Annexes Annex 1: Water Resources Potential and Requirements for 37 River Basins of India Annex 2: Types of Technical Assistance 38 TABLES, FIGURES, AND BOXES Tables 1 Flood Outlay, Expenditure, Damage, and Relief in Tenth Plan 12 2 Summary of Lending to Water Related Sectors—ADB and India 26 Figures 1 Per Capita Water Availability in India 2 2a Basin-wise Water Resources Potential 3 2b Basin-wise Utilizable Water 3 3a Installed Capacity by Sector 14 3b Installed Capacity by Source 14 4 Amount Approved for Water Sector Activities (1986–July 2011) 22 5 Technical Assistance to Water Sector Activities 27 Boxes 1 India’s Water Resources Development Scenario 3 2 Participatory Irrigation Management: A Success Story 5 3 Ministry of Water Resources Programs 6 4 The Benefits of the Bhakra System 8 5 Jyotigram Yojna (the Lighted Village Scheme) in Gujarat 9 6 Nirmal Gram Puruskar (Clean Village Award) 16 7 Private Sector Participation in Domestic Water Supply in Karnataka 18 8 Impacts of Climate Change on Water Resources in India 19 9 Publications in Agriculture and Natural Resource Sector 28 10 Regional and Subregional Networks 28 11 Examples of IWRM and Basin Organizations 31 ABSTRACT Water, of course, is the elixir of life. Yet rapid population growth, urbanization, and industrialization, the impact of climate change, and geographical and seasonal variability, make meeting the present and future needs for this most essential of elements a challenging one. The Indian water sector faces present and future competitive water demands from various sectors and the challenge of meeting them and ensuring food security without harming the environment and indigenous people. India’s utilizable water resource potential (surface and groundwater) is 1,123 billion cubic meters (BCM), whereas water demand projected for 2050 is 1,180 BCM, agriculture alone accounting for about 70% of the total. So far, storage of only 225 BCM could be created out of 690 BCM of utilizable surface water, which is equivalent to only 187 m3 per capita. Total surface and groundwater utilization is about 403 BCM and 231 BCM, respectively. To bridge the gap between demand and supply, the Ministry of Water Resources of the Government of India is implementing a number of programs, such as an accelerated irrigation benefits program; command area development and water management programs; repair, renovation and restoration of water bodies, and so on. Yet, a lot more is required to harness India’s full water resources potential and address the numerous challenges of agriculture, irrigation and drainage, water quality and supply, and sanitation and hydropower development. This paper looks at the strategies and options available in the water sector and ADB’s contribution to the development and management of the country’s water resource potential. ADB’s water sector operations in India began in 1995 with the approval of a loan of $85 million for an urban infrastructure development project in Karnataka State. Agriculture and natural resources was introduced as a new water-related sector for ADB in the 2003–2006 country strategy and program to strengthen mainstreaming of poverty reduction, with the approval of a first loan for the Chattisgarh irrigation development project in 2005. Water-related activity in the energy sector started in 2007 with a loan to Uttarakhand under a large hydropower project to support renewable energy development. By July 2011, 31 loans including periodic financing requests, totaling $3.14 billion, had been approved for water-related activities in agriculture and natural resources, urban, energy, and multisector areas. JEL Classification: E52, E61, E62, H30, H63 Keywords: surface water, groundwater, water quality, water supply and sanitation, hydropower. Author’s email: [email protected] CURRENCY EQUIVALENTS Currency unit = Indian rupee (INR) INR 1.00 = $0.02152 $1.00 = INR 45 ABBREVIATIONS ADB - Asian Development Bank BCM - Billion cubic meters CPS - Country Partnership Strategy CSP - Country Strategy and Program CWC - Central Water Commission DMC - Developing member country ERM - Extension, rehabilitation, modernization FFW - Flood forecasting and warning GW - Groundwater JNNURM - Jawaharlal Nehru National Urban Renewal Mission IWRM - Integrated water resources management MFF - Multitranche financing facility Mha - Million hectares MMT - Million metric tons MRC - Mekong River Commission MW - Megawatts O&M - Operations and maintenance PPP - Public–private partnership PRC - People’s Republic of China WFP - Water Financing Program WFPF - Water Financing Partnership Facility WUA - Water user’s associations NOTES (i) The fiscal year (FY) of Government of India ends on 31 March. FY before a calendar year denotes the year in which the fiscal year begins, e.g., FY2009–2010 begins on 1 April 2009 and ends on 31 March 2010. (ii) In this report, “$” refers to US dollars and INR refers Indian Rupees. (iii) Data and information in the paper are as available up to 15 July 2011 otherwise as specified. I. INTRODUCTION 1. Rapid population and economic growth is putting huge pressure on scarce water resources in Asia, especially South Asia. During the last 50 years, per capita availability of water fell by 70% in South Asia, 60% in North Asia, and 55% in Southeast Asia. In India, per capita availability by 2050—already down from about 5,200 cubic meters (m3) in 1951 to 1,588 m3 in 2010—is expected to fall to just 1,140 m3. Highly uneven distribution of water resources, geographically and seasonally, compound the problem. 2. Meeting the water needs of urbanization, industrialization, and the demands from agriculture and municipalities are also increasingly big challenges. Aggravating this mix are climate change, water pollution, and the environmental degradation associated with development. All these factors raise the question of just how the requirements of food security and competitive water demands can be fulfilled without further harming environments and indigenous people.
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