Urban water in India is a state subject; the central government’s responsibility in respect of water which is defined in River Board Act, 1956 and Inter-State Water Disputes Act, 1956, is limited to the regulation and development of inter-state rivers and river basins and provision of support for such programmes as the accelerated urban water supply, low cost sanitation, and establishment of water monitoring systems. The functions in respect of this sector stand allocated to the Public Health Engineering Department (PHED), e.g., in Rajasthan; a state-level agency with state-wide jurisdiction like the Kerala Water Authority and Delhi Jal Board; state-level parastatals such as those in Karnataka and Uttar Pradesh (Karnataka Water Supply and Sewerage Board and Uttar Pradesh Jal Nigam), metropolitan-level agency like in Bangalore, Chennai and Hyderabad, and municipal corporations and municipalities in such states as Gujarat, Madhya Pradesh and Maharashtra. It is not uncommon to find existence of arrangements wherein capital works are dealt with by a state-level agency (PHED), and the operation and maintenance of water supply systems being conducted by a city-level agency or municipality. Participation of the formal private sector (excluding the production of bottled water) in urban water provision and management is negligible, although several cities in India have witnessed the emergence of small scale water providers.
A few concluding observations are offered
Urban water is charged in many ways – a connection charge is a one-time levy; a tax and other rents like meter rents are payable annually, while other consumption charged are either paid every month or at a pre-determined time. For this reason, the accounting of revenues of water supplying entities assumes a complex character, particularly when the life of the water system is unstated or unspecified. With the exception of Bangalore where tariff revisions have led to a marginal surplus, other water supplying entities run into losses with the usual consequences for service delivery, expansion of water networks, and the like. It means that the most basic requirement of any water tariff, i.e., to raise enough revenues to cover the cost of service provision is not met in most Indian cities.
High proportion of non-revenue water is a common feature in India cities and towns. It should be evident that to the extent it cannot be brought down, non-revenue water will impede any attempt to rationalize water tariff structures.