Ever since Arvind
Kejriwal led AAP has announced provision of free water to every household consuming
up to 700 liters of water daily, I have seen many people slamming it as a
populist move and economically unfeasible.
First of all, we must understand that it is totally unfair to bracket water as a freebie like laptop or tablets. Water is a necessity for life, and it should be the responsibility of every government to provide access to water to each of its citizens. Lots of governments outside India, even provide access to clean drinking water to every household, while here in India, the levels of governance have been set so low, that people have stopped expecting water for even household purposes.
First of all, we must understand that it is totally unfair to bracket water as a freebie like laptop or tablets. Water is a necessity for life, and it should be the responsibility of every government to provide access to water to each of its citizens. Lots of governments outside India, even provide access to clean drinking water to every household, while here in India, the levels of governance have been set so low, that people have stopped expecting water for even household purposes.
Understanding the
Economics behind the move
According to the
current water tariff rules (Source 1) – those domestic households who consume
up to 10 Kiloliters of water have to pay between 60-100 rupees per month.
Those who consume
between 10-20 Kiloliters of water per month are required to pay between 120-220
rupees.
What Kejriwal has
proposed is that the families, who use water up to 700 liter per day or approximately
20 Kiloliter per month, will be provided free water. Those who consume more
than 20 Kiloliters, will be charged full amount as applicable earlier, for eg. those
using 25 Kiloliter, will be charged for full 25 and not for 5.
Whom will it benefit?
Currently nearly 20% of
Delhi does not have piped water connection according to 2011 census (Source 2).
So as of now, this move will benefit the other 80% households. Among these also
it will benefit those poor and middle class households who use lesser amount of
water, judiciously. It will also encourage those families who use 20-30
Kiloliters per month to save more water and start using less than 20 kiloliter
to save their money. Therefore, AAP’s policy is also going to help in water
saving.
It would have no impact
on those rich households who use ample amounts of water for swimming pool or
bath tubs.
A normal household
would save 1200-2400 rupees per year through this intervention. While it may
not seem a very large amount to many, but for the poor households, this money
could be better used on other resources like education or healthcare.
Where will AAP get the
money to implement this?
Economists have
estimated this cost at nearly 340 Crore annually as published in various news
reports. (Source 3)
Delhi has a population
of Nearly 1 Crore people. Therefore, this cost comes to around 1 rupee per
capita per day. So effectively, AAP is providing 140 Liter of water to each
Delhi citizen at the cost of a water pouch.
Also, the annual budget
of Delhi is nearly 37,000 Crore rupees (Source 4). Thus, the cost of providing
free water would be less than 1% of the state annual budget, which is very
feasible and practical.
Source:
keep up the gud work man ..
ReplyDeleteGood analysis Nishank...quite interesting!
ReplyDeleteawesum man......keep up the good work
ReplyDelete