Urban Domestic Water Pricing in India and China

Over a billion people live in India and China. Providing water for these citizens is a daunting task; finding money to pay for the provision of that water is at least as daunting.

Urban water tariffs in both countries are low and infrequently adjusted, even with current efforts at reform. In order to tease out some lessons from the experience of the two world giants, we investigate their institutional frameworks for water tariffs, water tariff regimes, inter-regional differences, and recent efforts at reform.

Urban water tariffs in both countries are low and infrequently adjusted, even with current efforts at reform. In order to tease out some lessons from the experience of the two world giants, we investigate their institutional frameworks for water tariffs, water tariff regimes, inter-regional differences, and recent efforts at reform.

The authors’ have focused on the domestic household sector served by water agencies, as that is usually the area of greatest policy concern.

This research paper attempts to tease out some lessons from the experience of the two world giants and investigates their institutional frameworks for water tariffs, water tariff regimes, inter-regional differences, and recent efforts at reform.

The research focuses on the domestic household sector served by water agencies, as that is usually the area of greatest policy concern. Some takeaways include:

• Water, and especially pricing, remains highly political in both countries and involves key stakeholders that extend beyond the conventional provider-user nexus. The result is that the final say over pricing remains outside the direct control of the provider, at the state level in India, and under the supervision of local Bureaux of Pricing that report to the powerful central National Development and Reform Commission in China.

• Diversity – in physical, economic and hydrological terms – has resulted in discernible inter-regional differences, in both India and China, in the operational costs and water tariff levels of water utilities.

• Both countries have launched nationwide water conservation campaigns.

• Regular tariff adjustments have been promoted and accepted in principle in both countries at the national level, but not adopted in practice at the city level in the 21st century.

• Despite the reform efforts, urban water supply operations in Indian cities have as a rule remained inefficient, services have not improved and service providers are suffering from accumulative deficits.

• Casual observation indicates that water utilities in China, on average, seem to be able to provide better services than their counterparts in India. They deliver water for much longer periods of the day, usually 24/7, and claim lower ratios of unaccounted-for-water.

This summary is based on the research paper Urban Domestic Water Pricing in China and India.

 

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