Trickle-down theory

Published on Mar 22, 2006 01:17 AM IST

Solutions to global water crises already exist in the way communities manage their limited access to water, writes Barun Mitra.

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None | ByBarun Mitra, New Delhi

This week, thousands of officials and activists are meeting at the fourth biennial World Water Forum in Mexico City to discuss the future of water. At international meets like the Water Forum, it is common to narrate the enormity of the crisis, to blame everything from population growth to commercial interests, to exhort governments to exhibit leadership and political will and to ensure more equitable access to water. The Mexican government is proposing a debt for water development initiative. Hardly any attention will be paid to the little fact that government control over water may have something to do with the present scarcity of water.

Governments — national, provincial and local — have been promising for years to deal with the challenge, yet have been consistently failing to perform. It is customary to cry over poor implementation of water policies. But little thought is given to the institutional arrangements and incentive structures that almost doom these public policies from inception. Many individual entrepreneurs and communities are, however, refusing to wait for political promises to be fulfilled. People are increasingly rising to the challenge and creating a market for water to ensure better and more efficient allocation of the precious resource.

Consider this. In the early part of the 19th century, natural ice was a very important part of exported items from the US. In 1833, history was made when an American businessman shipped 200 tonnes of ice from Boston to Calcutta, a journey of 16,000 miles which took over four months. By 1850, ice was being exported from North America to almost every major tropical port, north and south of the equator. Today, there is talk of a wider water market across North America, and even city councils are exploring ways of selling bottled water to raise revenues.

Today, the estimated economic value of investment in water-related projects across the world, public and private, is upward of $ 250 billion. This is expected to rise to $ 400 billion in a decade. The current size of the bottled water market in India is over $ 350 million. Yet, any talk of water market is anathema to politicians and activists. But countless private initiatives are already sustaining local markets and improving access to water for millions.

Take the case of farmers in Coimbatore district selling water to the hosiery industry in Tirupur. This town has over 9,000 small textile units, and contributes to 56 per cent of cotton knitwear exports from India. It is estimated that the water market is of the size of Rs 100 crore, compared to the loss of agriculture production of around Rs 20 lakh. No wonder farmers were happier selling their ground water to industry rather than trying to protect their earnings from their crops. One does not need to explain water rights to these people.

In Saurashtra, small rural communities  have taken to constructing small check-dams on their own rivulets and seasonal streams to catch the scarce rain water to recharge their ground water aquifers. Riparian rights have found acceptance among these villagers as fish in water.

In the slums of Delhi, informal entrepreneurs have dug borewells and laid small-pipe networks to connect 50 to 100 dwellings. The seller assures water at least twice a day. In return, the households pay a fee for the privilege. Around 40 per cent of municipal water in Delhi is wasted or lost. These informal local water entrepreneurs could easily become the nodes for the city’s water authority to distribute water, and collect the charges. Such co-option would not only reduce wastage of water, but also make quality water accessible to many more.

Economic development empowers people to access newer technologies to access water. Recognising and expanding the market for water will provide incentive to use water as efficiently as possible. To keep water flowing in our taps, we need to legalise the water markets, and recognise property rights and riparian rights over water resources. Private entrepreneurs and public agencies can then freely compete to provide water to consumers in the most cost effective manner.

The typical public sector reform measures, limited to raising rates or converting public monopolies into private ones, has proven to be inadequate. The paying public, not surprisingly, does not feel confident about higher prices without any assurance of quality and quantity of water supplied. In a truly competitive market, prices need not only go up, but competitive pressures will also induce greater efficiency leading to greater abundance and even lower prices.

There is no reason for our population to go thirsty when barely 2.2 per cent of our utilisable water resources are needed for domestic purposes. We are unlikely to learn this lesson by attending a mega-conference in Mexico if we close our eyes to the experiences of people in our own neighbourhood.

The writer is the director of Liberty Institute

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