Nature and Organization of I di ’ W t EIndia’s Water Economy:

Insights from 10 years of IWMI‐Tata  Water Policy Program

Tushaar ShahInternational Water Management Institute

t.shah@cgiar.org

Defining features of India’s water economy

• Unusually high reliance on groundwaterUnusually high reliance on groundwater

• Large and growing informal component with• Large and growing informal component with over reliance on self‐provision of water servicesservices

• Heavy emphasis on water resources• Heavy emphasis on water resources mobilization to the neglect of  governance of infrastructure and service provisioninfrastructure and service provision

Unusually high reliance onUnusually high reliance on groundwater

South Asia and North China are the world’s biggest irrigated areas.gg g

India is the world’s largest userof groundwater in agriculture in the world.

300

India has over 20 million irrigation wells. Until 2000, it

India

200

250

m/

year

added 0.8 million/year.

100

150

cub

ic k

m

Every fourth cultivator owns an irrigation well; non

0

50

1940 1950 1960 1970 1980 1990 2000 2010

irrigation well; non-owners depend on groundwater markets

US W.Europe SpainMexico China IndiaPakistan Bangladesh Sri Lanka

markets.

Increasing irrigation Pakistan Bangladesh Sri LankaVietnam Ghana South AfricaTunisia

g gin canal and tank commands is with Pumped water

Over half of India’s irrigation pumps were installed after 1990..

Pre 1970-80Pre-1970

India’s GroundwaterJuggernaut is still

1980-90 After 1990Accelerating!!!

Pervasive groundwater Irrigation‐A South Asian Phenomenon

Each dot represents

5000 i i ti n 5000 irrigation wells

There is a similarly explosive growth in urban and i d i l d

Private groundwater industrial groundwater use. 

The groundwater boom is a response to the inability of 

boom is undermining, even cannibalizing on public water systems

Irrigation as well as urban water planning ignores 

groundwater..p y

public systems to meet growing water demand.

After US $ 35 billion invested in canal irrigation since 1991, India has 3 m ha less under canal irrigation.

4260

Trends of public expenditure in major and medium irrigation and net irrigated area under different sources in India

30

36

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Groundwater

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t irri

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iture

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Net

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Investment

001960 1970 1980 1990 2000

(

Expenditure Tanks Canals Groundwater

Future of urban water demand..

High GW dependence

eDep

ende

nc

Higher SW access

% GW D

1,00,00010,000 10,00,000

Population

Large and growing informal component with over reliance on self‐provision of water 

services

How effectively these instruments can be used to influence theBehaviour of millions of final users depends upon the degree ofFormalization of the water economy.

India’s Water EconomyIndustrialized country’s Water Economy

Formal Water Sector Formal SectorFormal Water Sector 

Incidence of Laws, prices, taxes/subsidies, public policies  Informal Water Economyfalls on service providers

Self‐provision dominates; laws, prices, policies fail to stick

Informal Sector

800

1000

Rural India: Predominence of Self‐supply of drinking water (NSSO 65th round)

600700800

Urban India: Public Supply Increasing but slowly (NSSO 65th Round)

189

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665

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0tap (public supply) wells & tubewells (self‐

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(CPR source)

49th round [JanJune 1993] 58th round [July‐Dec 2002]

65th round [June‐July 2009]

0tap (public supply) wells & tubewells (self‐

supply)tanks, ponds, rivers, lakes 

(CPR source)

49th round [JanJune 1993] 58th round [July‐Dec 2002]

65th round [June‐July 2009]

Figure % of villages dependent on alternative irrigation sources: Survey of 4646 villages (NSSO 2003-report 487)

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domestic Water needs; 70-75% of Irrigators self-supply their

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% of surveyvillages with no irrigation source % of surveyvillages with canals as main source

Irrigation requirements using pumps. The only way IE can work with these is offering

% of survey villages with no irrigation source % of survey villages with canals as main source

Villages with groundwater as the main source % Villages dependent on other sources

% of India's Gross Cropped area

resource support. But regulation, managementAre possible only in towns and cities.

Per capita RURAL monthly expenditure on taxes and cesses including domestic water supply in 1999 (NSSO report 457)

4.00

4.50

10 00

12.00

For a long time to come, India’s prime water sector challenge will be the creation and sustainable

1 00

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300-340

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Expenditure classes (Rs per person per month)

R

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Taxes and cesses including water charges % of persons sampled

Per capita URBAN monthly expenditure on taxes and cesses including domestic water supply 1999 (NSSO report 457)

30 12Indians today pay just around

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y p y jRs 10,000 crore for their domestic water supplies; but India needs to invest Rs 500-

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so600 thousand crore to assure protected water supply to all. The issue is not capital or t h l b t h t 000-

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425-500

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575-665

665-775

775-915

915-1120

1120-1500

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Expenditure classes (Rs per person per month)

Taxes and cesses including water charges % of persons sampled

technology; but how to pave the way for an organized water industry.

Community‐driven water harvesting and groundwater recharge movement in Saurashtra has revitalized dying agriculture

Meghal basin drainage netwrork Profusion of checkdams built by peopleLarge scale people’s andProfusion of checkdams built by peopleLarge‐scale people s and community water initiatives  unknown in highly formalized 

water economies of Industrialized societies.

These contain challenges as well gas opportunities.

The booming informal economy of peri‐urban waste water irrigation

• Urban India releases 15 BCM of waste water/year.Urban India releases 15 BCM of waste water/year. • Some of this is  untreated nutrient rich water.• According to one estimate around 1 million ha ofAccording to one estimate, around 1 million ha of gross area is irrigated with urban waste water.

• Opportunity out of an adversity?Opportunity out of an adversity? • Can this recycling be done by design to minimize health risks and develop cost‐effective, sustainable p ,urban wastewater treatment regime?

O h i f bliOver‐emphasis of public policy on water resources development, overlooking the relationship between pthe water economy and the larger national economylarger national economy.

Obsession with resource development to the neglect of infrastructure and service provision.

Abundant water resources = Improved Water access? NoNo

• Physical and economic water scarcity;

• Improved water access= f(Improved governance of the water economy Gw);

• Gw =g(economic development; x, y, z)

• Water poverty index = f( access to water; water resources; capacity; water use efficiency; water environment)environment)

Figure 2 Water Access Poverty and Water Scarcity: How Little they Have to Do with Each Other

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Figure 3 Correlates of Water Poverty: Water Scarcity or Underdevelopment?

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Environment Kuznet’s Curve: E. degradation is not 

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environment amenity  and changing  structure of output 

00 20 40 60 80 100 120 140 160

147 Countries in ascending order of PPP adj. GNP

g g phelp .

Transformation of Informal Water Economies with Overall Economic GrowthStage I: Completely

InformalStage II: Largely

InformalStage III: Formalizing Stage IV: Highly Formal

Water Industry

% of users in the <5% 5 35% 35 75% 75 95%% of users in the formal sector

<5% 5-35% 35-75% 75-95%

Examples Sub-Saharan Africa India, Pakistan, Bangladesh

Mexico, Thailand, Turkey, Eastern China

USA, Canada, Western Europe, Australia

Dominant mode of Self-supply and informal Partial Public Private-public provisioning; Rise of modern water water service provision

mutual-help community institutions

Provisioning but self-supply dominates

attempts to improve service and manage the resource

industry; High Intermediation; self-supply disappears

Human, technical, financial resources used/km3 of water diversion

% of total water use self-supplied

Rural population as % of total

Cost of domestic water as % of per caput income caput income

Cost of water service provision

Concerns of the G t

Infrastructure creation in Welfare Mode

Infrastructure and Water services especially in Urban

Infrastructure and service in towns and villages; Cost

Integrated mgt. of water infrastructure service Governments Welfare Mode services, especially in Urban

areas in a welfare modetowns and villages; Cost recovery; Resource protection

infrastructure, service and resource; Resource protection

Institutional Arrangements

Self-help; mutual help and feudal institutions dominate

Informal Markets; Mutual help and community management institutions

Organized service providers; self-supply declines; informal institutions decline in significance

Self-supply disappears; all users get served by modern water industry.

Highlights

• During the past six decades, India’s water withdrawals have increased faster than population growth.

d h d h d l d h ld• India has emerged as amongst the most densely irrigated regions in the world.

• India used less than 20 BCM of groundwater for all uses around 1960. Today, India is the groundwater champion of the worldIndia is the groundwater champion of the world.

• India’s water economy is highly informal, with over 75 percent of water volume and water users outside the ambit of direct regulation or o u e a d ate use s outs de t e a b t o d ect egu at o ointermediation.  

• As a result, India’s water economy is driven more by near‐ term incentives and jugad technology rather than a well‐organized water industry.

• The dynamic linkages between the water economy and the larger national economy determine the ease of sustainable water governanceeconomy determine the ease of  sustainable water governance.

Th k f h iThank you for the opportunity.

2. Does water scarcity cause water poverty? The Water Poverty Index for 147 countries

WPI Component and its weight

Sub-components

Water Resource Availability (20%)

• Internal freshwater flows• External inflows( )• Population

Access to Water(20%)

• % of population with access to clean water• % of population with access to sanitation• access to industrial water compared to need• access to industrial water compared to need• access to irrigation compared to need for irrigation

Capacity(20%)

• ppp adjusted per capita income• under-five mortality rates• education enrolment rates• Gini co-efficient for income distribution

Water Use efficiency(20%)

• Domestic water use in litres/day• Share of water use by industry adjusted by sectoral share in GDP(20%) Share of water use by industry adjusted by sectoral share in GDP• Share of water use by agriculture adjusted by its share in GDP

Environment(20%)

Indices of• Water quality• Water stress (pollution)• Environment regulation and management• Informational capacity• Biodiversity based on threatened species