IWRA World Water Congress 2008 Montpellier France
6. Water Conservation and Demand Management
Japan Foundation Fellow, Graduate School of Life and
Environmental Sciences, University of Tsukuba,
305-8572 Japan, Associate Professor of Economics,
Nabakrushna Choudhury Centre for Development Studies
Irrigation Reforms, Water Pricing,
AbstractINSTITUTIONAL AND FINANCIAL
REFORMS IN IRRIGATION IN INDIA:
NEED FOR SYNCHRONIZATION
theme 6: Water Conservation and Demand Management: Economic instruments and water pricing; For oral
During the last decade most of the state governments in India have undertaken profound
reform measures in the irrigation sector to improve efficiency in water use, ensure equitable distribution of water
among water users and sustainability of the system. Two major planks of the reform efforts are decentralizing
irrigation management by turning over operation and maintenance of tertiary segment of irrigation systems to Water
Users’ Associations (WUAs) and economic pricing of water to recover the supply cost and manage demand.
However, a critical analysis of the reform process of irrigation sector in India unveils that though institutional
restructuring encompassing devolution of irrigation management responsibility to farmers is undertaken with a high
spirit, the financial reforms of irrigation which need to be undertaken with the same vigor with hand in hand
institutional reforms is not given due attention. Political populism overrides economic rationality. One of the most
important pre-conditions for sustainability of WUAs once they are formed is that they should be financially viable by
raising funds from various sources. In many states in India, in the case of minor flow and lift irrigation projects, the
WUAs are now empowered to fix and collect water rates and they operate and maintain the systems with the
revenue collected from water users. In the case of major and medium canal irrigation projects in few projects such
financial autonomy has been granted.
In this context this paper attempts to critically analyze the issues
relating to water pricing which need to be given due attention while restructuring irrigation institution. The issues are
(i) Who has to fix the water rate? Whether state government should fix a uniform water rate for
all projects or the concerned WUA should be given the power to determine the rate?
(ii) What should be the
norms or criteria to fix water rates? Who will fix the norms?
(iii) Which pricing principle should be followed
in fixing water rate?
(iv) What should be the method of water pricing? Whether water is to be priced
according to area irrigated or actual volume of water used or output achieved from the use of water?
WUAs need to be entrusted with the responsibility of water rate collection? Will it improve water rate collection?
(vi) Is there any need to regulate water rate fixation to ensure rational pricing of irrigation water?
If the farmers do not pay water rates to WUAs, what punitive measures can be taken against them by the WUA?
On the basis of Indian experiences the study concludes that while bringing about institutional change in the
governance structure of irrigation by democratizing and decentralizing its management by transferring some
management functions to Water Users’ Associations (WUAs), it is important that the devolution of financial power
should also be ensured to enable them to carry out the handed over responsibilities of operation and maintenance of
irrigation system. In view of the severe resource constraint faced by the government, cost (at least O&M) recovery
should be the main consideration governing water rate determination. In the assessment, billing and collection of
water charges there must be administrative decentralization.