Context: Water is considered as a non-economic good and this leads to its over exploitation and excessive wastage.
What are the underlying issues involved?
- More than 40 per cent of India is arid and semi-arid with erratic and scanty rainfall.
- Water stress/scarcity situations impact lives and livelihoods in these regions.
- With climate change, the rainfall pattern is changing and water shortage is visible in many parts of the country.
- There are wide spatial and temporal variations in the distribution of water.
- A NITI Aayog study (2019) estimates that by 2050, water availability (supply) in India will reduce to half of the demand.
Water having an economic value:
- The UN Dublin Principle (1992) emphasised on the importance of economic value of water in general and irrigation water in particular.
- Domestic water and water for industries are charged, but irrigation water is considered a non-merit good, often supported by government funds.
- The National Water Policy (NWP) 1987 mandated that water rates should convey the scarcity value of the resource to users.
How the water should be valued?
Experts have found few inter related things in this regard:
- Valuing in situ water resources and ecosystems
- Valuing water infrastructure for water storage, use, reuse or supply augmentation
- Valuing water services, mainly drinking water, sanitation and related human health aspects
- Valuing water as an input to production and socio-economic activity, such as food and agriculture, energy and industry, and business and employment
- Other socio-cultural values of water, including recreational, cultural and spiritual attributes
What can be a way ahead?
- The NWP 2002 suggested that water rates should cover at least O&M cost initially and part of capital costs subsequently. (OECD countries levy uniform volumetric charges.)
- Subsidy on water rates should be well-targeted and transparent.
- There should be independent Water Regulatory Authorities (WRA) to fix the price in consultative and transparent manner.
- There should be frequent revision of water rates. (in Kerala, for 47 years there were no changes in water rates.)
- Volumetric pricing system in irrigation sector should be implemented. Incentive should be given for using water-efficient technologies such as drip/sprinkler irrigation in agriculture. A National Irrigation Water Policy should be framed after extensive deliberations with States.