Calls for abolition of subsidies to agricultural, domestic sector

The Union government has begun consultations on a new National Water Policy that calls for privatisation of water-delivery services and suggests that water be priced so as to “fully recover” the costs of operation and administration of water-resources projects, documents available with The Hindu show.

Recently circulated to water experts for consultations, the 15-page draft National Water Policy suggests that the government withdraw from its role as a service provider in the water sector. Instead, it says, communities and the private sector should be encouraged to play this role. The proposals could mean sharp rises in the cost of water for both rural and urban users — an outcome the policy suggests will help curtail misuse of a precious but scarce resource.

The draft policy calls for the abolition of all forms of water subsidies to the agricultural and domestic sectors, but says “subsidies and incentives” should be provided to private industry for recycling and reusing treated effluents. It also proposes that subsidy to agricultural electricity users be curtailed, saying it leads to a “wasteful use of both electricity and water.”

Similar World Bank proposals

In 2005, a World Bank paper made similar recommendations, arguing that “if India is to have sustainable economic growth, the role of the Indian water state must change from that of builder and controller to creator of an enabling environment, and facilitator of the actions of water users large and small.” The paper called for, among other things, “stimulating competition in and for the market for irrigation and water and sanitation services”.

The draft policy calls upon the government to ensure access to a minimum quantity of potable water for essential health and hygiene to all citizens, available within easy reach of the household. Significantly though, it does not suggest that these be turned into enforceable rights through new laws.

For expeditious resolution of inter-State disputes, the draft policy suggests the establishment of a permanent tribunal at the Centre.

In a major departure from the past, the policy also suggests that people displaced by large water projects should be made partners in progress and given a share in the benefits comparable to the project-benefited families. In fact, the policy suggests that the cost of rehabilitation and compensation to the project affected families be “partly” borne by the project-benefited families through “adequate pricing of water.”

Himanshu Thakkar, an expert at the South Asia Network on Dams, Rivers and People, said the policy showed the government had been unable to “learn from the past.” “The entire focus should have been on how to sustain groundwater, which is the country's lifeline,” he said.