Madhya Pradesh Urban Sector Investment Program (RRP IND 42486) FULL SECTOR ASSESSMENT: WATER AND OTHER URBAN INFRASTRUCTURE AND SERVICES A. India Urban Scenario 1. About 377 million (31%)1 of India’s population lives in 7,935 urban areas and contributes 63% of gross domestic product (GDP). About 70% of the urban population resides in 4682 rapidly growing urban agglomerations and cities with a population of over 100,000, including 53 cities with a population of more than a million. Growth in the remaining small towns was nominal. The contribution to GDP from the urban areas is expected to increase to about 75% as the proportion of urban population reaches 40% of the total population by 2030. 2. Urban water supply in India is characterized by intermittent water supply (often for a couple of hours in a week) and low coverage, high nonrevenue water, and poor cost recovery. No city in India can claim for universal coverage with continuous pressurized water supply. The service levels are even lower in small towns, which have been upgraded from village character to a town. These small towns mostly depend on local groundwater sources with no treatment and no planned hydraulic networks. The small town local bodies have been struggling with limited financial resources further aggravated by a lack of competent and skilled human resources capable of delivering services expected from a fully functional water utility. 3. The investment in urban infrastructure3 up to the year 2031 was estimated at $53.5 billion for water supply and $40.5 billion for sewerage services at 2009–10 prices. Learnings from the previous mission (Jawaharlal Nehru National Urban Renewal Mission) shows that infrastructure creation, such as providing water connections and toilets, would have direct impact on people’s needs and economic status. In this background, the Government of India has recently launched the Atal Mission for Rejuvenation for Urban Transformation (AMRUT) program for improving urban infrastructure services in 500 cities and towns in the country. 4. The Government of India also launched a Smart City mission to drive economic growth by improving quality of life through local area development and by harnessing technology that leads to smart outcomes. The mission will cover 100 cities in 5 years, that is, by fiscal year (FY)2019–20, at an estimated investment of $16.7 billion. Significant features of the program are to select the cities on completion and implementation through special purpose organizations with involvement of the private sector both in investments and management. Sixty proposals selected for implementing the Smart Cities program have been released by the ministry by 2017. B. Madhya Pradesh Context 5. Madhya Pradesh is located in Central India and has an area of 308,000 square kilometers covering 9.5% of the country’s total area. The state has a population of 72 million. From 2004–05 to 2013–14, its GDP at current prices grew at a compound annual growth rate of 16.6%, making Madhya Pradesh one of the fastest-expanding state economies. Agriculture and agro-based industries, forest-based industries, and textiles are key contributors to the state economy. 1 Census of India 2011. 2 Census of India 2011, Urban Agglomerations and Cities. 3 Government of India, High Powered Expert Committee. 2011. Report on Indian Urban Infrastructure and Services. Delhi. 2 6. Despite its reputation as a largely rural state, Madhya Pradesh has a growing urban population of about 20 million (ranking eighth in India) with an annual growth rate of 2.57%, which is higher than the national average of 2.45%. In line with expected growth trends in India, urbanization in Madhya Pradesh is expected to intensify over the coming decades, and the urban population is likely to exceed 25 million by 2021. By 2026, urbanization in the state will reach 34.8% compared with 27% in 2011. 7. The state poverty ratio is 32%, constituted by 21% from the urban areas and 35.7% from the rural areas. The poverty ratio of Madhya Pradesh declined from 49% to 32% from 2004–05 to 2011–12, with urban poverty declining by 14 percentage points from 35% to 21%. Yet the incidence of poverty in Madhya Pradesh is one of the highest among the states of India. 8. The state-specific poverty lines for 2011–2012 indicate that the monthly per capita consumption expenditure for Madhya Pradesh was among the lowest at Rs1,842 in urban areas in comparison with the all-India average of Rs2,477 in urban areas. The poverty estimate for the state is Rs897 per capita per month in urban areas in comparison with the all-India average of Rs1,000 per capita per month in urban areas.4 C. Urban Scenario in Madhya Pradesh (i) Urban Local Bodies 9. The urban Madhya Pradesh has 378 urban local bodies (ULBs) comprising 16 municipal corporations, 98 municipal councils, and 264 Nagar Parishads (Municipality) with 20.1 million total urban population (2011 census). The heightened economic activities in urban areas create employment opportunities, education, health facilities, and other social infrastructures; it attracts distressed rural population to cities. A map indicating the location of all ULBs in the state is provided in Appendix 5. (ii) Urban Governance 10. The Urban Development and Housing Department (UDHD), headed by a cabinet minister (currently held by the Honorable Chief Minister), is responsible for the urban governance including policy making, regulation, and financial devolution of funds to all ULBs in the state. The Urban Administration and Development Department (UADD), headed by the Commissioner reporting to UDHD, is the line organization implementing all urban development program and provides all administrative control and decision making. The state had recently established Madhya Pradesh Urban Development Company Limited (MPUDC) to accelerate the implementation of urban development programs. (iii) Urban Water Services 11. Increasing urbanization is putting more stress on urban infrastructure and urban basic services. Many urban local bodies (ULBs) or local municipal boards do not have piped water supply, and only a fraction have wastewater and sanitation systems. A 2013 survey of 378 ULBs in Madhya Pradesh noted that less than 57% of households have access to piped water 4 Planning Commission. Government of India. 2013. Press Note on Poverty Estimates (2011–2012). New Delhi. 3 supply.5 About 60% of households with piped water connections have intermittent water supply (from 30 minutes to 2 hours per day), and the rest have water once every 2 days; some urban areas get drinking water even less frequently. Less than 2% of piped water supply connections are metered, and less than 45% of total consumers pay for water supply. Nonrevenue water is high, and none of the cities or towns has continuous pressurized water supply services, leading to inefficiencies and potential health risks. A 2013 study showed the importance of increasing access to potable water supply for poverty reduction: poor drinking water quality has increased the disease burden, resulting in economic repercussions that disproportionately impact women, the poor, and vulnerable sections of society. 6 About 90% of the state’s drinking water is from groundwater, increasing vulnerability of drinking water supply to declining groundwater levels. A service-level benchmarking assessment conducted for 110 sample ULBs by the Urban Development and Housing Department (UDHD) of Madhya Pradesh indicated an extremely uneven distribution of urban services, with small ULBs (nagar parishads or municipal boards) ranked at the bottom. Table 1 provides the urban water supply coverage according to 2011 census. Table 1: Urban Water Scenario in Madhya Pradesh as per 2011 Census Parameter Unit Value % Total urban households Number 3,845,232 Water supply facilities Drinking water source within premises Number 2,130,473 55 Drinking water source near premises Number 1,157,105 30 Drinking water source away from premises Number 557,654 15 Source: Madhya Pradesh Government 2011 census 12. About half of the towns have daily water supply, with supply hours varying between 30 minutes to 4 hours per day. None of the towns have continuous pressurized water services. Table 2 provides the distribution of towns based on frequency of supply. Table 2: Water Supply Frequency in Urban Local Bodies Water Supply Frequency Unit Value % Towns with daily water supply Number 202 53 Towns with alternate day water supply Number 129 34 Towns with once in 3 days water supply Number 36 10 Towns with water supply once in 4 or more days Number 11 3 Total 378 Source: Madhya Pradesh Government 2011 census (iv) Toilet Coverage 13. About 26% of the urban households have no private toilet/latrine in their house premises. 5 Government of India. 2014. Drinking Water, Sanitation, Hygiene and Housing Condition in India: NSS 69th Round, July 2012–December 2012. New Delhi. 6 Oxford Policy Management Asia and CRISIL. 2013. Research into Lessons Learnt from DFID India Urban Investments over 20 Years: Final Report. New Delhi and Mumbai. 4 Table 3: Urban Sanitation Scenario in Madhya Pradesh as per 2011 census Parameter Unit Value % Total urban households Number 3,845,232 Sanitation Facilities No latrine Number 991,151 26 Water closet Number 2,750,877 72 Pit latrine Number 63,842 2 Other latrines Number 39,362 1 Source: Madhya Pradesh Government 2011 census (v) Madhya Pradesh State Vision 2018 14. The Government of Madhya Pradesh (GoMP) had recently set Vision 2018 comprising the various missions for overall development of the state, and the vision with respect to water supply is spelled out in Mission 8. Some of the key strategic initiatives in urban water supply are summarized below. A. Universal Coverage (i) Expand drinking water supply coverage to provide 135 liters per capita per day in urban areas to each household.