95-Water Pricing-A Key Issue in Sustainable Urban Water Management.

Abstract

Water has been identified as one of the most important natural resources as it is viewed as a key to prosperity and wealth. Water price is the main instrument to control demand but designing a tariff is a complex process. The Water rates presently being charged from the users are highly subsidized and have resulted in low revenue realization. The urban water supply sector in India is entrapped in a vicious circle of poor tariff structure to poor cost recovery and hence poor service delivery to consumers. Therefore urgent steps are necessary for improving the management of urban water sector and thus ensuring sustainability. The focus of present paper is on issues in tariff fixation in urban local bodies. Basic objective of water tariff is cost recovery, economic efficiency, equity, and affordability. It is recommended that the long-term aim should be 100% metering coverage. Improving the quality of meters and reducing the frequency of faults which is essential in order to remove the commonly held perception that they are unreliable and that paying a fixed monthly charge is much better. In this paper proposed tariff structure is discussed.