2 INDIA INFRASTRUCTURE REPORT 2011 Water: Policy and Performance for Sustainable Development Three quarters of Indians live in water-stressed regions. The situation is worsening with growing demand and ineffi cient water usage while the availability of clean water is declining due to overexploitation of groundwater and pollution of water bodies. Climate change would exacerbate the problem. The widening water gap could have serious ramifi cations such as constrained INDIA INFRASTRUCTURE REPORT INDIA INFRASTRUCTURE REPORT development, food shortages, and increased confl icts unless a new approach is taken towards eff ective water resource management (WRM). The India Infrastructure Report 2011 (IIR 2011) focuses on the theme of ‘Water: Policy and 2011 Performance for Sustainable Development’. The Report analyses: • the water situation in India, Water: Policy and Performance for • climate change and implications on WRM, • dimensions of confl icts related to water, Sustainable Development • the rights–policy–legal–institutional framework for the sector, • sectoral practices, policies, programmes, and institutions, and their eff ectiveness, • international experiences in achieving better water service delivery, and • techno-economic and regulatory aspects of water conservation. The Report is a collective eff ort of contributors affi liated to universities, NGOs, think tanks, and private and government agencies, coordinated by Infrastructure Development Finance Company (IDFC). IIR 2011 will be an invaluable resource for policymakers, academics, researchers, and business organizations. 2011 Cover visual: Age Fotostock/Dinodia Photo ISBN 0-19-807885-4 4 1 9 780198 078852 www.oup.com Rs 695 INDIA INFRASTRUCTURE REPORT 2011 OTHER IIR TITLES India Infrastructure Report 2001 Issues in Regulation and Market Structure India Infrastructure Report 2002 Governance Issues for Commercialization India Infrastructure Report 2003 Public Expenditure Allocation and Accountability India Infrastructure Report 2004 Ensuring Value for Money India Infrastructure Report 2006 Urban Infrastructure India Infrastructure Report 2007 Rural Infrastructure India Infrastructure Report 2008 Business Models of the Future India Infrastructure Report 2009 Land—A Critical Resource for Infrastructure India Infrastructure Report 2010 Infrastructure Development in a Low Carbon Economy INDIA INFRASTRUCTURE REPORT 2011 Water: Policy and Performance for Sustainable Development Infrastructure Development Finance Company 1 1 Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trademark of Oxford University Press in the UK and in certain other countries Published in India by Oxford University Press YMCA Library Building, 1 Jai Singh Road, New Delhi 110001, India © Infrastructure Development Finance Company Limited 2011 Th e moral rights of the author have been asserted First Edition published in 2011 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer ISBN-13: 978-0-19-807885-2 ISBN-10: 0-19-807885-4 Typeset in 11/13 in Adobe Garamond Pro by Excellent Laser Typesetters, Pitampura, Delhi 110 034 Printed in India at Rakmo Press Pvt. Ltd., New Delhi 110 020 9780198078852 IIR-2011_00_FM.indd iv 10/20/2011 4:31:56 PM Contents List of Tables, Figures, and Boxes viii Foreword xv Acknowledgements xvii List of Contributors xix List of Abbreviations xxi Overview xxix Piyush Tiwari and Ajay Pandey Section I MACRO 1. A River Basin Perspective of Water Resources and Challenges 3 Anju Gaur and Priyanie Amerasinghe 2. Implications of Climate Change for Water Resources Management 18 P.P. Mujumdar 3. Opportunities for Trans-boundary Water Sharing in Th e Ganges, Th e Brahmaputra, and Th e Meghna Basins 29 Mashfi qus Salehin, M. Shah Alam Khan, Anjal Prakash, and Chanda Gurung Goodrich 4. A Million Revolts in the Making: Understanding Water Confl icts 44 Suhas Paranjape and K.J. Joy 5. Water Rights and the ‘New’ Water Laws in India: Emerging Issues and Concerns in a Rights Based Perspective 56 Videh Upadhyay Section II RURAL 6. Past, Present, and the Future of Canal Irrigation in India 69 Tushaar Shah vi Contents 7. Groundwater Irrigation in India: Growth, Challenges, and Risks 90 Vasant P. Gandhi and Vaibhav Bhamoriya 8. Rainwater Harvesting for Irrigation in India: Potential, Action, and Performance 118 Vasant P. Gandhi and Vaibhav Bhamoriya 9. Water Management Institutions for Enhancing Water and Food Security: Designing for Better Adaptiveness 134 Vaibhav Bhamoriya and Vasant P. Gandhi 10. Evolving Regulatory Framework for Rural Drinking Water: Need for Further Reforms 151 Philippe Cullet 11. Changing Waterscapes in the Periphery: Understanding Peri-urban Water Security in Urbanizing India 162 Anjal Prakash, Sreoshi Singh, and Vishal Narain Section III URBAN 12. Provincial Water Access in China and India: A Comparative Assessment 177 Fan Mingxuan and Bhanoji Rao 13. Review of Reforms in Urban Water Sector: Institutional and Financial Aspects 199 Subodh Wagle, Pranjal Deekshit, and Tejas Pol 14. Addressing the Challenge of Financial Sustainability in Urban Water Supply Services— Role of Performance, Monitoring, and Planning 210 Vandana Bhatnagar and S.R. Ramanujam 15 Private Sector Involvement in Water 225 Part I PPPs in the Drinking Water and Irrigation Sectors: A Review of Issues and Options V. Sathyanarayana and D.T.V. Raghu Rama Swamy Part II Water Sector—A Private Equity Perspective 235 Prasad Gadkari and Shishir Maheshwari 16. Transforming Water Utilities: Policy Imperatives for India 240 Piyush Tiwari and Ranesh Nair 17. Water in Cities: Rethinking Services in Transformation 260 Marie-Hélène Zérah and Sylvy Jaglin 18. Industrial Water Demand in India: Challenges and Implications for Water Pricing 274 Suresh Chand Aggarwal and Surender Kumar Section IV WASTEWATER 19. Water Pollution in India: An Economic Appraisal 285 M.N. Murty and Surender Kumar 20. Municipal Wastewater Management in India 299 J.S. Kamyotra and R.M. Bhardwaj Contents vii 21. Th e Economics of Municipal Sewage Water Recycling and Reuse in India 312 Pritika Hingorani Section V WATER VALUATION AND INSTITUTION 22. Water Sector Reforms: Implications on Empowerment and Equity 325 Sachin Warghade and Subodh Wagle 23. Pricing the ‘Fluid Mosaic’: Integrated ‘Inclusive Valuation’ of Water from the Scarcity Value Perspective 337 Nilanjan Ghosh and Sarika Rachuri 24. Pricing Urban Water: A Marginal Cost Approach 351 Kala Seetharam Sridhar and Om Prakash Mathur 25. Dams and Environmental Governance in North-east India 360 Neeraj Vagholikar 26. Evaluation of National Water Mission using Global Water Partnership Toolbox 370 Suman Apparusu Section VI INFRASTRUCTURE REVIEW 27. Th e Infrastructure Sector in India 2010–11 379 Manisha Gulati Tables, Figures, and Boxes Tables 1.1 Surface and Groundwater Resources in River Basins in India 4 1.2 Available Water Resources in India and Demand Projections by 2025 and 2050 8 1.3 River Basin-wise Water Demand Projections for 2010, 2025, and 2050 9 1.4 Pollution in Selected Stretches of Rivers Basins 11 3.1 Catchment Areas of the GBM Basins 30 6.1 Deteriorating Finances of Indian Canal Irrigation, AD 1900 compared with AD 2000 71 6.2 Extent of Irrigation Deprivation Levels of Tail-enders in Selected Gravity Flow Irrigation Projects in India 73 6.3 Various Estimates of Area Irrigated by Canals and Wells in India, C. 2000 75 6.4 Socio-technical Context of Surface Irrigation in Diff erent Eras 79 6.5 Farmer Modifi cations and Adaptations of Canal Systems to Serve their Needs 85 7.1 Dynamic Groundwater Resources of India, 2004 91 7.2 River Basin-wise Groundwater Potential of the Country 91 7.3 State-wise Ultimate Groundwater Irrigation Potential, 2001–2 93 7.4 State-wise Groundwater Resource and its Development in India 94 7.5 State-wise Frequency of Villages having Irrigation Facility per 1,000 Villages, and their Distribution by Type of Such Facility in India 95 7.6 Sources of Irrigation in India, 1950–1 to 2008–9 96 7.7 Average Yields of Major Crops by Water Source 98 7.8 Input Use and Agriculture Productivity by Water Source 98 7.9 Th e Impact of Irrigation on Variability in Agricultural Output 99 7.10 Distribution of Wells According to their Ownership, 2000–1 100 7.11 Distribution of Wells According to Farm Holding Size, 2000–1 101 7.12 Crop Season-wise Area Irrigated by Groundwater, 2000–1 101 7.13 Farm Size-wise Distribution of Households Participating in Water Markets 103 7.14 Reasons for Participation or Non-participation in Water Markets 104 7.15 Impact of Rainwater Harvesting and Groundwater Recharge by Check Dam Groups of Saurashtra Region in Gujarat—Members’ Response 105 7.16 Categorization of Blocks/Talukas/Watersheds as Overexploited and Dark/Critical 106 Tables, Figures, and Boxes ix 7.17 Pricing of Water: Crop-wise Charges and General Irrigation Needs 112 7.18 Approximate Depth of the Water Level, Wells,