2008 - 2009 - Pinsent Masons Water Yearbook 2012 - 2013

INDIA
PART 2: COUNTRY ANALYSIS
Demand by industry
1970 6million MI
1990 15million MI
2000 30million MI
2025 120million MI
Pricing
Water was traditionally seen as God’s gift both by Hindus and Muslims. This means that there is
considerable pressure at the local and rural level for it to be provided as a free (or nominally priced)
resource, especially for domestic use. The 74 th constitutional amendment gives local authorities the
responsibility for planning, operating, maintaining and upgrading water supply, sewerage and
sanitation services. Funds have to be raised by the authority, which also has the right to determine
and enforce its own charges. In many cases, attempts to start operating water services on a self
financing basis have focused on using higher industrial charges to cross subsidise domestic fees.
Given the small size and uneven distribution of India’s industry, this approach has not met with great
success to date.
Economics; operating spending, income and capital spending
O&M spend pa Revenues pa 5 year Capex
(INRmillion) (INRmillion) (INRmillion)
Ahmadabad 318 223 1,189
Amritsar 224 172 212
Bangalore 3,414 4,255 1,918
Bhopal 283 100 21
Chandigarh 548 404 526
Chennai 1,388 3,127 17,343
Coimbatore 111 135 543
Indore 881 165 543
Jabalpur 104 62 200
Jamshedpur 328 532 188
Kolkata 1,229 260 2,954
Mathura 28 9 88
Mumbai 4,284 8,789 7,581
Nagpur 424 562 953
Nashik 215 182 809
Rajkot 149 92 792
Surat 368 N/A N/A
Varanasi 183 141 65
Vijayawada 104 91 80
Visakhapatnam 412 525 1,667
The Water (Prevention and Control of Pollution) Cess (Amendment) Bill introduced in 2003 seeks to
strengthen the financial resources of pollution control boards and promote water economy by
factories. The tax was last increased in 1991, resulting in a rise in annual income from INR81.3million
to INR637.8million in 2000. The new charges are expected to bring in around INR2billion a year. State
Pollution Control Boards will receive 80% of tax revenues, with Delhi retaining the balance for the
central pollution control agencies. The tax will be applicable to all industries, except hydropower and
seeks to encourage water conservation.
Delhi’s fundamental financial challenge
Annual operating costs for the Delhi Jal Board (DJB) have gone up from INR2.76 billion
(USD61million) in 1998 to INR7 billion (USD154.7million) by 2003. DJB has annual revenues of
INR2.30billion (USD50.8million) and debts of INR36 billion (USD795million) and INR16.2billion
(USD357.8million) in interest liability. Legislation will be sought in order to establish a Delhi Water
Regulatory Commission, the first such water structure to be formed in any Indian state. About 85% of
water supplies serve residential consumers who pay INR0.53 (GBP0.006) per m 3 . As 75% of
municipal connections are unmetered, there is a need to consider metering before tariff rationalisation
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Pinsent Masons Water Yearbook 2008-2009