Conference Report

 This conference on the theme ‘Water and ’ is 7th in the series of lead-up events

prior to the 3rd Annual Meeting of the AIIB to be hosted by India in on 25-26

June. The AIIB is a new Multilateral Development Bank with more than 80 member

countries headquartered in Beijing. India is the second largest shareholder after China

and is keen to leverage this platform to provide leadership, ideas and proposals on future

infrastructure for an Asian Century and also leverage the portfolio of the AIIB to finance

its selected infrastructure initiatives.

 At RIS we are priviledged to associate with the Ministry of Finance as their knowledge

partner for the 3rd Annual Meeting of the AIIB and the lead-up events. We are grateful to

our industry partners in this journey and today I am particularly thankful to FICCI for

their support. I acknowledge the dynamic leadership and meticulous guidance of our

Director General Professor Sachin Chaturvedi and kind support of our mentors

Ambassador S T Devare, Dr Sheshadri Chari and Professor Amitabh Kundu.

 We have witnessed great transformations in the sphere of infrastructure development in

India in the last 4 years under the vision and leadership of the Prime Minister and some of his able ministerial colleagues. This does not only suggest that key areas of infrastructure

have been prioritized and expedited tremendously, but also throws variety of lessons on

good governance in the area of infrastructure development. This includes novel PPP

designs, new models of financing, systematic monitoring, innovation driven

infrastructure and institutional and regulatory reforms.

 Globally investment needs across infrastructure sectors, particularly in the emerging and

developing economies are huge. Multilateral Development Banks are a key source of the

additional finance. However, neither Governments nor the MDBs can cover this gap. The

new way forward has been suggested in terms of collaborations among concessional

finance, institutionalized financing agencies, innovative financing mechanisms, blended

finance and leveraging private capital. Also emergence of new technologies have made

planning and allocation even more challenging even as there are definite positive benefits

in terms of quality and coverage of conventional and new infrastructure. The forthcoming

AIIB Annual Meeting is slated to explore such issues.

 To place the issues in context I recount flagship initiatives of the like

Smart Cities, , SagarMala, and above all Swachh Bharat Mission.

In the lead-up events we have covered each of these initiatives and associated areas of

action and concern.

 In the conference on Digital Infrastructure held last month in Bangalore it was referred

that Digital Infrastructure is the ‘infrastructure for infrastructure’. After the intensive

deliberations here, I can definitely say that ‘Water and Sanitation’ is in fact the ‘Mother’ of

all infrastructure and anchors sustainability of the environment and society in all possible

ways. This was wisely alluded to in the context of an age old Indian saying – “Jal hi Jivan

Hai”. Two of the SDGs – SDG 6 (totally) and SDG 12 (in spirit) have been directly devoted

to ‘Water and Sanitation’. The background paper by Mr Parameswar Iyer brilliantly

captures this point and reiterates highest political commitment towards SDGs in general

and SDG 6 in particular.  Based on the stupendously rich conversations since yesterday I divide my conclusions

into three broad areas. The detailed conference report will be prepared in due course.

o Current Status – investments and achievements

o Key outcomes and recommendations for policy action and institutional reforms

o Other highlights of the proceedings

Current Status – investments and achievements

 Since the inception of the National Rural Drinking Water Program in 2011, the coverage

of habitations with over 40 LPCD rural water supply has increased to 78 percent, in line

with supplying all habitations with sustainable and sufficient drinking water by 2030 as

part of the SDGs. Of these, 57 per cent of the population is also covered by Piped Water

Supply through public standposts. However, drinking water supply is alarmingly

depended on groundwater sources, to the extent that India is the highest consumer of

groundwater. This leads us to issues of water quality across the country.

 The NRDWP provides grants for construction of rural water supply schemes with special

focus on water-stressed and water quality affected areas, rainwater harvesting and

groundwater recharge measures, and for operation and maintenance including minor

repairs.

 On March 22,2018 World Water Day the Government of India launched ‘Swajal’ –

community – led drinking water projects aimed at providing sustainable and adequate

drinking water in an integrated manner to the rural masses.

 The last few years have also seen a noticeable rise in the investment made on drinking

water through NRDWP, with a total of Rs 17,184 cr invested in the last three years alone.

Encouragingly, States have been investing their own funds as well – notable examples are

Gujarat, , and Telengana (Mission Bhagiratha – which has been a truly

ambitious programme to provide piped water supply to all households).  On 2nd October 2014, the rural sanitation coverage stood at approximately 39 percent

while as of May 2018, it has increased to over 83 percent under the Swachh Bharat

Mission. However, the States that need significant improvement include , Bihar,

Puducherry and .

 The number of total household built since 2nd October 2014 is 7,30,70,830; 3, 70,

243 ODF Villages; 387 ODF districts and 17 ODF States/UTs.

 The 14th Finance Commission has emphasized delivery of basic services such as water

and sanitation in the utilization of basic (90 per cent) and performance (10 per cent)

grants provided to Gram Panchayats. Local funds are being used for capex and opex for

water supply scheme, rainwater harvesting, water treatment, retrofitting etc.

 The Government of India has set up an arrangement of pooled funds called the Swachh

Bharat Kosh in order to enable companies to contribute towards the programme. The

funds collected is in the tune of Rs 1000 cr since October 2014.

 Government is taking robust measures towards piped water supply to all households by

2030; improve water quality; focus on surface water vis-à-vis ground water;

decentralized irrigation and sanitation systems. It is also focusing on community led

initiatives and traditional approaches on like the GOBARDhan

initiative.

Key Outcomes and Policy Recommendations

 User Charges for Water and Water Tariff: In this context it was discussed that out of

3Ts – tax, tariff and budgetary transfers, tariffs may be most sustainable. It has been

argued that people are ready to pay for quality services and due to water scarcity and

water quality issues people are in any case paying coping charges. Poor do not benefit

from low user charges. They end up paying much more to vendors. So, operational cost

recovery is a feasible objective. The modalities of this are being worked out. It was suggested that non-revenue water supply in cities have to be significantly reduced. Water

budgeting and implementation of water meters need to seriously considered. Issues of

tariff for irrigation water were also explored. There is a big scope for disciplining water

use in irrigation.

 Institutional Provisions: Water is a State subject in India, which comes in the way of

comprehensive national planning and programme in this sector. It was suggested that a

fresh look on the subject may be necessary to effectively address issues of watershed

management, and regulation.

 Watershed Management and Water-intensity of Agriculture: It was pointed out that

river-linking initiatives are misnomer, and the correct approach should be linking of

water basins and sources of surface water for sustainable water management. It was also

highlighted that due to poor understanding and planning several water scarce states end

up having water intensive cropping patterns; case in point is Punjab. On the other hand

as an encouraging example it was highlighted that discourages rice

production during Rabi season and subsidizes wheat production. However, we need to

promote alternatives in irrigation systems like micro-irrigation and drip-irrigation for

sustainable water management since changing cropping patterns is less palatable to a

large section of farmers.

 Private Sector Participation: Interventions in these sectors and utilities in most cases

are publicly funded. However, given the nature of challenges the private sector can be a

source of innovation and solutions. It is generally perceived that it is difficult for the

private sector to invest in water and sanitation globally. The range of issues includes

tendering process, sustainable revenue/tariff risk, bankability of projects and lack of

focus on issues of water quality beyond flow and supply. The successful cases of PPP

models in water supply from Manila and were discussed in detail. In Nagpur

sewage water is being recycled for non-potable use in the industry. It was suggested that

the DBO contracts have to be effective. Right incentives for recycling and waste segregation have to be provided to tackle the challenges of landfill. Decentralized

solutions and use of technology for water supply and sanitation have been strongly

advocated.

Other Highlights of the Proceedings

 In terms of better management of water – water footprint assessment of the private

industry could be adopted. Moreover, significant R&D is required in areas like scenario

building software to inform policymakers and citizens of the implications of different

patterns of water use. This would improve the response from both.

 Urban areas mostly source water from water basins located at a distance. This has

significant cost implications. In order to keep these basins recharged and free from

contamination, interventions in terms of industrial waste management and reduction of

fertilizer use have to be adopted. This has social and political implications.

 Conservation of water is equally important for ecological balance and protection of

species. Water wastage through modern but perceivably misguided household

purification devices and bottled water supply, needs fresh examination and mitigation.

 It was highlighted that 498 Class I cities in India had treatment plants with average of

only 32 percent of treatment and 225 Class II cities have treatment plants with a further

poor average of 8 percent of treatment of the total waste generated. To improve the

situation, decentralized solid/septage waste management may be promoted. However,

regulation would be important for any decentralized approach.

 There has been a call made to reduce food waste, plastic usage and general reduction of

waste through public awareness. Water-energy-food nexus is very strong.

 Use of bio-toilets by the Indian Railway is a best practice and a success story from India in

terms of timelines and coverage. Such decentralized waste management technologies can

be adopted by urban housing societies as well.  There is a need to improve spatial data generation by use of technologies for effective

planning and monitoring for water and sanitation.

 Finally, institutional issues that need attention are:

o New financing options/cost sharing and cost recovery

o Regulatory issues around cost effectiveness, transparency, predictability, design

and capacity building, monitoring, accountability, project/impact evaluation

o From output based to outcome based assessment.

o Coordination, governance and social conditions.