India Effectiveness of Rural Water Schemes. Smita Misra Sr. Economist World Bank February 2009

Transcription

1 India Effectiveness of Rural Water Schemes Smita Misra Sr. Economist World Bank February 2009

2 RWS Expenditures Continuously Increasing Habitations ('000) Cum Exp (since 1992) % % Rural habitations covered with safe drinking water 90% Habitations ('000) Expenditure (Rs bln) 80% 70% 60% 50% 40% 30% 20% 10% Partially Not covered Fully %

3 Coverage Slipping (10th plan working group estimates) Total Rural Habitations = 1.4 million Partially/Not Covered 20% Sources going dry or becoming quality affected Systems working below capacity due to poor O&M Increase in population resulting in lower per capita availability Is RWS expenditure improving service delivery? How cost effective is the RWS program?

4 Objective of the Study This study is an attempt to understand the effectiveness of rural water supply schemes, based on a large representative scheme and household sample across ten states in India. The purpose of the study is to contribute to the policy discussions for improving rural water supply service delivery, based on a reality check of the performance of existing schemes. This study looks at various aspects of rural water supply, including flow of funds and expenditures, performance of schemes, cost of supply, household coping strategies and costs, household willingness to pay and affordability.

5 Study Design Consumer Survey Scheme Survey Sample Consumer Survey Current service vs demand Coping strategies Coping Cost Preferences for Improvements WTP and Affordability Representative Schemes Secondary Data State Secondary Data District/Village Sample Scheme Survey Capital & O&M costs Cost recovery Design & Actual performance Panchayat Level Fund flow by source Fund utilisation

6 Expenditure on Supply Driven Schemes Dominate Flow of Funds for RWS under different programs ( to ) ARWSP 34% Others 5% EAP 6% Swjldhar a + sector reform 6% MNP 42% PMGY 7% E x p e n d i t u r e o n D e m a n d v s S u p p l y d r i v e n s c h e m e s ( t o ) 9 1 % 9 % At prices

7 1 0 0 % Inadequate Services Problems reported by households (% of HH reporting) S u p p ly I n a d e q u a t e 8 0 % 6 0 % 4 0 % F r e q u e n t B r e a k d o w n s S h o r t a g e i n c e r t a i n m o n t h s o f t h e y e a r T i m i n g n o t s u i t a b le 2 0 % L o w P r e s s u r e 0 % H P M in i w a t e r S V S M V S /R e g A l l

8 Dependence on Multiple Sources % 8 0 % 6 0 % 4 0 % 2 0 % D e p e n d e n c e o f R u r a l H o u s e h o l d s o n P u b l i c a n d P r i v a t e W a t e r S o u r c e s (% HHs) M a i n + S u p p l e m e n t a r y P u b l ic + P r iv a t e M a i n P u b li c + P r i v a t e M a i n + S u p p l e m e n t a r y P u b l ic M a i n P u b li c o n l y 0 % G P C o m m P U / G o v t. Z P H a n d p u m p M i n i w a t e r S V S M V S / R e g i o n a l A l l Managed by Schemewise

9 High Coping Costs E s t i m a t e d c o p i n g c o s t b o r n e b y h o u s e h o l d s ( R s p e r m o n t h ) E x p o n r e p a i r o f p u b li c s o u r c e s E x p o n m a i n t e n a n c e o f o w n s o u r c e S to r a g e c o s t O p p o r tu n i ty c o s t o f ti m e s p e n t % Coping cost + water charges as % of income G P C o m m P U / G o v t Managed by H P M W S V M V / R e g Schemewise A ll < Monthly income (Rs) >5000 All

10 Actual Cost of Schemes much higher than Norms Actual cost of piped water schemes vs cost norm 25% 11% 7% 7% % of schemes in which per cap capital cost > norm By 100% or more By % By 25 50% 14% 7% 3% 4% % of schemes in which pre cap O&M cost > norm C o s t o f p i p e d w a t e r s u p p l y i n f r a s t r u c t u r e C a p b l d g / S O / N G O I n s t n l C o s t C a p i t a l C o s t R s /H H P U / g o v t C o m m u n i t y

11 Costs vary across States Capacity building/so/ngo cost Institutional cost C o s t D i s t r i b u t i o n f o r R W ( t o ) 6 4 % S Capital cost Rs/HH % I n s t n l 2 3 % 1 4 % PU/Govt community PU/Govt community PU/Govt community PU/Govt community PU/Govt community PU/Govt community PU/Govt Community PU/Govt Community PU/Govt Community PU/Govt Community Kar Kerala UP UTTK Mah TN AP Punjab Orissa WB

12 Cost Recovery relatively better in Demand Driven Schemes 7 1 % 4 6 % DEMAND DRIVEN 5 2 % 2 1 % 0 % H P A v g C o m m u n it y m a n a g e d G P m a n a g e d Piped Water Supply Schemes P U m a n a g e d

13 O&M Cost Recovery much lower against Design Costs Good Practice Design Cost Actual Cost Incurred Cost Recovery 50 Rs per HH pm % 58% 55% 56% 57% 10 53% 35% 46% 0 37% 29% 19% 27% Mini water SVS MVS/Reg All

14 Effectiveness of Service Delivery vis à vis all Indicators Reliability & Adequacy PU GP Community Fin Sustainability Affordability Environ Sustainability

15 Huge Subsidies perpetuating Inefficiencies (Subsidy per year, ) West Bengal Orissa Punjab Andhra Pradesh Uttarakhand Uttar Pradesh Tamil Nadu Maharashtra Kerala Karnataka Rs million O&M cost Capital cost Indirect power NOTE: O&M cost subsidy is computed on the basis of O&M cost of schemes and O&M cost recovery Subsidy per HH served (Rs/mont h) Ratio to state domestic product (%) Rural Subsidies on roads, Power 0.1%; 2% of GDP

16 Cost inefficiencies higher in Supply driven Schemes (Piped Water) Economic cost Economic cost + time cost (standposts) Supply driven Demand driven Capital cost O&M cost Supplementary source cost Coping cost Institutional cost SO/NGO cost Indirect power subsidy Rs / KL

17 1% GDP Loss Due to Inefficiency Loss due to inefficiency of piped water supply systems in the ten states studied Loss due to schemes getting defunct Rs 50.2 billion per year Rs 1.9 billion per year Possible resource saving during to % loss in GDP in the ten states Rs 468 billion 0.9%

18 Economies of Scale yet to be realised Scheme size and cost of water supply (annualized capital cost plus O&M Cost) cost per HH, ground water based cost per HH, surface water based 2500 Cost per HH per annum (Rs) Optimum scale Households served

19 WTP & Affordability much higher than User Charges Stand Post Users Pvt Connection Users Rs/month Water Charges Exp on own sources Other Coping Costs Rs/month Costs WTP for improved services Affordablity for improved services 0 Costs WTP for improved services Affordablity for improved services

20 Observations & Way Forward

21 Key Challenges Performance of Schemes Inadequacies in Service Provision Dependence on Multiple Sources High Coping Costs borne by Households Cost of Service Provision High Institutional Costs High Capital Cost and Inadequate O&M Costs Over provisioning by some Schemes Defunct or Partially Functioning Schemes Existence of Multiple Schemes Low Cost Recovery from Beneficiaries Huge Direct and Indirect Subsidies High Cost of Service Provision compared to Economic Cost Funding Programs continue to Support Supply Driven Programs Effectiveness of Service Delivery Indices confirm low to moderate Effectiveness Fraction of Expenditure trickles down to Beneficiaries Economies of Scale not Realized Strong Demand, Willingness to Pay and Affordability

22 Improve O&M Cost Recovery Adopt Flexible Norms for Service Delivery Improve Scheme Design, Monitoring Way Forward Adopt Scale Efficient Scheme Size Implement Top down/ Bottom up Planning Un bundle to Improve Accountability Reduce Inefficient Costs Emergence of a New Model? Redefine Swajaldhara