Sahjeevan A Study to understand economics, pricing of Drinking Water and it's implication for Participatory Democracy STUDY TEAM Kavita Mehta, Krupa Dholakia, Bharati Nanjar and Pravin Muchhadiya Publication Year 2012 A Study to understand economics, pricing of Drinking Water and it's implication for Participatory Democracy 1 Sahjeevan Acknowledgements Though Sahjeevan has worked in water sector since long, we are no experts in the economics aspects of the subject. Understanding economics of delivery of water were absolutely new subject for us and that’s why study took long time to get accomplish. While working on strengthening village panchayats for their drinking water security, we learnt that even though village panchayats are having their own drinking water scheme, they were tempted to continue to be connected with Regional water supply scheme of Gujarat Water and Sewage Supply Board (GWSSB). Why Village Panchayats are not ready to become independent and to own their drinking water scheme was the question in our mind. Largely, there were two major concerns from village panchayat, one,” if we say no to GWSSB that we do not need water from regional scheme, we will be in bad situation in case of shortfall or poor quality of water from source in future and another reason was why should we bear higher cost to manage our own scheme where, government is providing water on highly subsidized rate”. This has pushed us to understand the issues in detail and we took up the study. Hope we have been able to do some justice to the subject. During the course of this study, several people have contributed to our understanding the subject, many have helped to gather data and many have helped with ideas to explore further. However this study was possible due to constant support and guidance from Sri S.V. Ahuja Sir, Technical Advisor of GWSSB and WASMO - Water and Sanitation Management Organisation, Sri Yugandhar Mandavkar, Vice President of Sahjeevan and Sri Sandeep Virmani, Governing Board member of Sahjeevan. Their support and guidance has given direction to the study. We, sincerely thanks Mr. M.S. Singh, Member Secretary GWSSB, Gandhinagar, for his positive insights on the policy matters; his support and willingness to conduct sharing workshop jointly by GWSSB and WASMO to share the findings of this study at state level. Our sincere thanks to Mr. U.R. Pandya, CEO WASMO, Gandhinagar to provide inputs and help design sharing workshop at District as well State level. We specially thank all the officials of GWSSB, WASMO, and GWIL to provide all kind of data, required for the study. We would like to thanks Mr. N.M. Patel and later on Mr. R. L. Patel, Chief Executive Engineer, GWSSB Bhuj, Mr. D.G. Chaudhary, Chief General Manager, GWIL, Gandhinagar, Mr. S. H. Kanani and later on Mr. A.G. Maru, Unit Manager, WASMO, CMSU Bhuj, Mr. Fafal, Executive Engineer, GWSSB Bhuj division for their constant support. We would also like to thanks Mr. Parmar, Mr. Maheshwari, Mr. Solanki, Mr. Ramanuj, Mr. Dhokia, of GWSSB, Mr. Mitesh Vakhariya of GWIL, Anjar for providing all kinds of data at any given time. Without their support the study could not have been completed. Our sincere thanks to all members of Vllage Panchayat and Pani Samitis from study villages for fruitful interactions and further to provide ground level data on O & M aspects of their village schemes. Their cooperation and readiness to provide data at any time has helped us to provide ground level scenario. A Study to understand economics, pricing of Drinking Water and it's implication for Participatory Democracy 2 Sahjeevan Several experts on the subject have helped us understand subject. We would like to especially thanks to Mr. S. Vishwanathan, Advisor, Arghyam, Banglore for providing critical inputs. We would also like to thanks programme team of Arghyam, Mr. Rahul Bokare, Programme Director and Mr. Nelson Royal, Programme Officer, Arghyam, Banglore to back our idea and to provide financial support for this study. We would also like to thanks Mr. Yogendrsinh Jadeja, Director and Mr. Jayantilal Gorasiya, Programme Coordinator of Arid Communities and Technologies (ACT), Bhuj for helping us to present different kinds of data on maps. Several other people have helped in many ways whose names might have not mentioned here, we would like to thank all of them for their inputs and sharing. Last but not least, we would also like to thank entire water team of Sahjeevan whose dedication and timeless efforts have given end result to the study. Without their efforts this study could not have been completed. May 31, 2012 Krupa Dholakia Bhuj Bharati Nanjar Pravin Muchhadiya Kavita Mehta A Study to understand economics, pricing of Drinking Water and it's implication for Participatory Democracy 3 Sahjeevan Preface Drinking water security assumes great importance in arid and drought-prone areas like Kutch, where water is a scarce and thus a precious resource. After independence, India adopted a democratic governance system and responsibility of a Welfare State, whereby undertaking a role of providing basic services and facilities to her citizens. Over the last thirty years, the government endeavoured to supply drinking water to all villages of Kutch, with financial assistance from several sources, including Rs 30 crore provided by the World Bank. Such centralised approach did not succeed in addressing the drinking water security of the people of Kutch due to a variety of factors. Sahjeevan and other VOs have been working towards water security in times of stress - cases of two consecutive years of droughts was common in Kutch and water security in such years was a challenge successfully met by over a hundred village communities at present. This was possible because of decentralised and community managed schemes were promoted and implemented by Sahjeevan and other VOs since 1990’s, and more prominently, under WASMO project in recent years. For more than a decade, Narmada water was a promise by the government as a reliable alternative to perpetual scarcity problem - people from Kutch and Saurashtra looked at it with great expectation. Now that the water supply from Narmada canal has started, it was considered useful to study its reliability and financial aspects. On this backdrop, Sahjeevan undertook a study during 2009-10 to understand the operational aspects of locally managed water supply systems and the cost and price- related implications of centralised versus decentralised systems. This study report is an attempt to familiarise the reader with ground reality about drinking water pricing in an objective manner. A Study to understand economics, pricing of Drinking Water and it's implication for Participatory Democracy 4 Sahjeevan Index Chapter 1: Background of the study/ History 6 Chapter 2: Study Design 9 Chapter 3: Water Supply Scenario in Kutch 1. Historical Perspective 13 2. Policy Framework of Water Pricing in Gujarat 13 3. Present Status of Water Supply 15 4. Narmada water in Kutch 17 5. Cost for delivery of water 20 6. Recovery for Centralised Scheme 22 Chapter 4: Water Distribution and its Economics – Village Level Scenario 23 1. Narmada / RWSS based Drinking Water Scheme 24 2. Tube-well based Individual Drinking Water Scheme 27 3. Open-well based Individual Drinking Water Scheme 32 4. Summary Village Level Scenario 37 Chapter 5: Conclusions and Recommendations 39 A Study to understand economics, pricing of Drinking Water and it's implication for Participatory Democracy 5 Sahjeevan Chapter 1 Background of the study/ History About Kutch Kutch district is located in a crescent-shaped peninsula in the Gujarat state of Western India on the western border with Pakistan and the Arabian Sea; it is the largest district in Gujarat and has an area of 45,612 sq km constituting 23 per cent of the state, with the lowest population density of 66 persons per sq.km. Kutch is like an island as it is bound by the sea in the South and West and by the Ranns (salt marshlands) in the East and North. Kutch has 886 inhabited villages with a population of 2.1 million. It has ten talukas or Administrative sub-districts: Bhuj and Nakhatrana in the North; Lakhpat and Abdasa in the West; Mandvi, Mundra, Anjar and Gandhidham in the South and Bachau and Rapar in the East Water situation: Kutch has a semi-arid type of climate and accounts for 60 per cent of the semi-arid tract in Gujarat. Kutch is known for its scanty and erratic rainfall with average annual rainfall is 388 mm ranging from 338 mm in Lakhpat to 440 mm in Mundra. With 2-3 droughts every five years, water availability remains the central issue for any development. The rainfall conditions and topography limits the scope for sites for large dams -there are 16 medium-sized and 160 minor-sized water schemes in Kutch (Raju: 1985). Kutch has 97 rivers that flow seasonally with a high run-off rate. A Study to understand economics, pricing of Drinking Water and it's implication for Participatory Democracy 6 Sahjeevan Kutch has barely 15 per cent of its geographic area as cultivable land, which supports animal husbandry and rainfed agriculture, the mainstay of rural economy. While settled agriculture is practised as an important occupation today, traditionally, most Kutchis, in spite of very heterogeneous social and ethnic composition, were pastoralist. Even today the cattle population exceeds that of the human population and dairy products form a crucial part of the daily diet. However, the planners have rarely taken into account the cattle population and its water requirement in development planning of Kutch. Water scarcity in Kutch is a commonly known curse, especially since 1812 when an earthquake changed the course of River Sindhu erstwhile flowing into Kutch.