Subsidies and targeting of subsidies

Subsidies and targeting of subsidies

There are no accurate recent estimates of the level of subsidies for water and sanitation in India. It has been estimated that transfers to the water sector in India amounted to 5,470.8 crore (US$1.2 billion) per year in the mid-1990s, accounting for 4% of all government subsidies in India. About 98% of this subsidy is said to come from State rather than Central budgets. This figure may only cover recurrent cost subsidies and not investment subsidies, which are even higher (see below). There is little targeting of subsidies. According to the World Bank, 70% of those benefiting from subsidies for public water supply are not poor, while 40% of the poor are excluded because they do not have access to public water services.

Investment and financing

Investment in urban water supply and sanitation has increased during the first decade of the 21st century, not least thanks to increased central government grants made available under Jawaharlal Nehru National Urban Renewal Mission alongside with loans from the Housing and Urban Development Corporation.

Investment

The Eleventh Five-Year Plan (2007-2012) foresees investments of 127,025 crore (US$28.2 billion) for urban water supply and sanitation, including urban (stormwater) drainage and solid waste management.

Financing

55% of the investments foreseen under the 11th Plan are to be financed by the central government, 28% by state governments, 8% by "institutional financing" such as HUDCO, 8% by external agencies and 1.5% by the private sector. Local governments are not expected to contribute to the investments. The volume of investments is expected to double to reach 0.7% of GDP. Also, it implies a shift in financing from state governments to the central government. During the 9th Plan only 24% of investments were financed by the central government and 76% by state governments. Central government financing was heavily focused on water supply in rural areas.^[50]

Institutions

State Financing Corporations (SFC) play an important role in making recommendations regarding the allocation of state tax revenues between states and municipalities, criteria for grants, and measures to improve the financial position of municipalities. According to the Planning Commission, SFCs are in some cases not sufficiently transparent and/or competent, have high transactions costs, and their recommendations are sometimes not being implemented.^[51] An important source of financing are loans from Housing and Urban Development Corporation Ltd (HUDCO), a Central government financial undertaking. HUDCO loans to municipal corporations need to be guaranteed by state governments. HUDCO also on-lends loans from foreign aid, including Japanese aid, to states. The Jawaharlal Nehru National Urban Renewal Mission initiated in 2005 also plays an increasingly important role in financing urban water supply and sanitation through central government grants.

The current system of financing water supply and sanitation is fragmented through a number of different national and state programs. This results in simultaneous implementation with different and conflicting rules in neighboring areas. In rural areas different programs undermine each other, adversely affecting demand driven approaches requiring cost sharing by users.

External cooperation

In absolute terms India receives almost twice as much development assistance for water, sanitation and water resources management as any other country, according to data from the Organisation for Economic Co-operation and Development. India accounts for 13 per cent of commitments in global water aid for 2006-07, receiving an annual average of about US$830 million (€620 million), more than double the amount provided to China. India's

biggest water and sanitation donor is Japan, which provided US$635 million, followed by the World Bank with US$130 million.^[52][53] The annual average for 2004-06, however, was about

half as much at US$448 million, of which Japan provided US$293 million and the World Bank US$87 million.^[54] The Asian Development Bank and Germany are other important external partners in water supply and sanitation.

In 2003 the Indian government decided it would only accept bilateral aid from five countries (the United Kingdom, the United States, Russia, Germany and Japan). A further 22 bilateral donors were asked to channel aid through nongovernmental organisations, United Nations

agencies or multilateral institutions such as the European Union, the Asian Development Bank or the World Bank.^[55]

Asian Development Bank

India has increased its loans from the Asian Development Bank (ADB) since 2005 after the introduction of new financing modalities, such as the multitranche financing facility (MFF) which features a framework agreement with the national government under which financing is provided in flexible tranches for subprojects that meet established selection criteria. In 2008 four MFFs for urban development investment programs were under way in North Karnataka (US$862 million), Jammu and Kashmir (US$1,260 million), Rajasthan (US$450 million), and Uttarakhand (US$1,589 million). Included in these MFFs are major investments for the development of urban water supply and sanitation services.^[56]

Germany

Germany supports access to water and sanitation in India through financial cooperation by KfW development bank and technical cooperation by GTZ. Since the early 1990s both institutions have supported watershed management in rural Maharashtra, using a participatory approach first piloted by the Social Center in Ahmednagar and that constituted a fundamental break with the previous top-down, technical approach to watershed management that had yielded little results.^[57] The involvement of women in decision-making is an essential part of the project. While the benefits are mostly in terms of increased agricultural production, the project also increases availability of water resources for rural water supply.^[58] In addition, GTZ actively supports the introduction of ecological sanitation concepts in India, including community toilets and decentralized wastewater systems for schools as well as small and medium enterprises. Many of these systems produce biogas from wastewater, provide fertilizer and irrigation water.^[59]

Japan

As India's largest donor in the sector the Japan International Cooperation Agency (JICA) finances a multitude of projects with a focus on capital-intensive urban water supply and sanitation projects, often involving follow-up projects in the same locations.

Current projects. Projects approved between 2006 and 2009 include the Guwahati Water Supply Project (Phases I and II) in Assam, the Kerala Water Supply Project (Phased II and III), the Hogenakkal Water Supply and Fluorosis Mitigation Project (Phases I and II) in Tamil Nadu, the Goa Water Supply and Sewerage Project, the Agra Water Supply Project, the Amritsar Sewerage Project in Punjab, the Orissa Integrated Sanitation Improvement Project, and the Bangalore Water Supply and Sewerage Project (Phase II).^[60]

Evaluation of past projects. An ex-post evaluation of one large program, the Urban Water Supply and Sanitation Improvement Program, showed that "some 60%-70% of the goals were achieved" and that "results were moderate". The program was implemented by the Housing and Urban Development Corporation, Ltd. (HUDCO) from 1996 to 2003 in 26 cities. The

evaluation says that "state government plans were not based on sufficient demand research, including the research for residents' willingness to pay for services", so that demand for

connections was overestimated. Also fees (water tariffs) were rarely increased despite recommendations to increase them. The evaluation concludes that "HUDCO was not able to make significant contributions to the effectiveness, sustainability, or overall quality of individual projects. One of the reasons that not much attention was given to this problem is probably that there was little risk of default on the loans thanks to state government guarantees."^[61]

World Bank

Current projects. The World Bank finances a number of projects in urban and rural areas that are fully or partly dedicated to water supply and sanitation.^[62] In urban areas the World Bank supports the Andhra Pradesh Municipal Development Project (approved in 2009, US$300 million loan), the Karnataka Municipal Reform Project (approved in 2006, US$216 million loan), the Third Tamil Nadu Urban Development Project (approved in 2005, US$300 million loan) and the Karnataka Urban Water Sector Improvement Project (approved in 2004, US$39.5 million loan). In rural areas it supports the Andhra Pradesh Rural Water Supply and Sanitation (US$150 million loan, approved in 2009), the Second Karnataka Rural Water Supply and Sanitation Project (approved in 2001, US$151.6 million loan), the Uttaranchal Rural Water Supply and Sanitation Project (approved in 2006, US$120 million loan) and the Punjab Rural Water Supply and Sanitation Project (approved in 2006, US$154 million loan).

Evaluation of past projects. A study by the World Bank's independent evaluation department evaluated the impact of the World Bank-supported interventions in the provision of urban water supply and wastewater services in Mumbai between 1973 and 1990. It concluded that water supply and sewerage planning, construction and operations in Bombay posed daunting challenges to those who planned and implemented the investment program. At the outset, there was a huge backlog of unmet demand because of underinvestment. Population and economic growth accelerated in the following decades and the proportion of the poor increased as did the slums which they occupied. The intended impacts of the program have not been realized. Shortcomings include that "water is not safe to drink; water service, especially to the poor, is difficult to access and is provided at inconvenient hours of the day; industrial water needs are not fully met; sanitary facilities are too few in number and often

unusable; and urban drains, creeks and coastal waters are polluted with sanitary and industrial wastes." ^[63]

1. (a) Name any four important waterborne diseases. What are the sources, symptoms, significance and

methods of prevention and (or) control of these diseases.

(b) Give the Process flow diagram of a typical Protected Water Supply Scheme for a Town of popu-

lation 1 lakh using River Water as its source. [8+8]

2.   (a) Distinguish between a 'Reservoir Intake' and a 'Portable Intake'.

(b) Discuss the Criteria for 'Location of Intakes'. 

3.             Discuss in detail, with the help of sketches, the role of following design considerations while designing

a Settling/Sedimentation system like a clarifier.

(a)Surface loading

(b) Detention Time

(c) Shape of the Reactor

(d) Depth

(e) Types of Sedimentation. 

4. (a) Describe the working of a Pressure Filter with the help of a sketch.

(b)  A private estate uses a Pressure filter to treat 500 cu.m./day of turbid water. If filter

operates from 04.00 pm to 08.00 am every day, find the size of pressure filter. Also find the approximate HP of the pump that supplies water to pressure filter under pressure.

5. (a) Explain the general methods of distribution of water employed in municipal water supply schemes.

(b) Illustrate with sketch the Grid iron type of layout of pipe system in distributing water, and compare its merits and demerits. [6+10]

6. (a) Name the two factors used as criteria for selection of pipe diameter and slope in design of sewer.

(b) Calculate the ratio of discharge of a sewer when flowing at full depth to that when flowing at 3/4

depth. [8+8]

7.   Write short notes on the following'

(a)Humus tank

(b) Contact bed

(c) Dunbar filter

(d) Bio-filter. [4+4+4+4]

8. (a) Design a septic tank for 100 users in a hostel. Assume per capita water demand as 150 litres.

(b) Write a note on soak pit. [8+8]