Finance Minister P Chidambarams budget speech last year made many to sit up and applaud. Echoing the voice of the poor, Chidambaram had said that though water harvesting schemes were specific to a village these were extremely useful in overcoming local water scarcities. Announcing a capital subsidy of 50 per cent with a total allocation of Rs.100 crore (1 crore = 10 million) towards water harvesting, the budget speech had made amends to the serious neglect of the poor by the previous regime.
Promised to cover one lakh irrigation units, the scheme had envisaged investing an average of Rs. 20,000 per unit. The budget document had made it clear that NABARD will lend money on easy terms and that no margin money will be charged to the borrower. As credit institutions rarely service the poor, the scheme has been rightfully targeted at providing financial support to scheduled castes and scheduled tribe families in the rural areas.
A year later and with a reasonably good monsoon behind, the scheme announced with much accolades is nowhere on the ground yet. Surprisingly, the government is now approaching the World Bank for assistance to revive and restore the 15 million water bodies. The proposal to undertake water bodies' restoration in 15 districts in 8 states on a pilot basis is being favourably seen by the World Bank that has already indicated extending support to the proposal.
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But the manner in which New Delhi has perceived water harvesting is in direct contrast to the ethos and strengths of these systems. This is also the crucial question in the case of World Bank's Tank Rehabilitation project in Karnataka. Why should the State sponsor and seek participation in the conventional cost - or labour - sharing sense to revive community-managed systems when the actual need is give communities the 'charge' and create non-interfering conditions through legal and administrative facilities of removing encroachments for village institutions?
The World Bank, however, views harvesting as an opportunity to continue increasing its water sector lending from the current 9.5 per cent. Notably, its lending had dipped down through the last decade and had touched an all time low of 4 per cent in 2002, sending alarm bells across the Breton Woods fraternity.
Things have now started looking up for the World Bank though. Its annual water sector lending in the country has been raised from $200 million (1$ = Rs 43.7 at current exchange rates) in the last decade to $800 million from this year. The Water Resources Ministry has decided to play a perfect host for this hefty funding from the World Bank for 'sustained, long-term' development of the water sector. Interestingly, it doesn't worry the Water Ministry a bit that the Banks lending comes with conditionality and an interest rate of 16 per cent.
Is the World Banks interest confined to lending and the interest that may accrue on it? Could it have other interests hidden beneath? Undoubtedly, the bank is pursuing its sector reform agenda across the globe and its most recent loans are guided by that. It is well recognized that the reform agenda requires incurring major expenditure to begin with, followed by regulatory and institutional reforms that are not only political but controversial too. In making its commitment for lending to reform the countrys water sector, the bank has made it clear that the suggested reforms 'in the right direction must provide returns to politicians who are willing to make changes.'
Politicians who fall prey to such 'reform bait' help the World Bank unleash its broader aim of creating better environment for investments. Driven by corporate interests, external assistance often guides the developing countries to move away from the existing subsidy-based regime in creating a productive and competitive environment for investment. Any sector that is heavily dependent on large subsidies is not considered conducive to such change.
While the lending institution pursues its goals, the Water Ministry seems to be bartering away the interests of the poor for seeking more investments. The government's earlier interest in getting NABARD to lend for the water sector has waned; NABARD has since been bypassed in favour of the World Bank itself. In the meantime, the Planning Commission has termed the current goings on in the water sector a 'total anarchy'. Suggesting across the board changes, commission member B N Yugandhar has called for integration of various government programmes to improve water resource management.
If millions of poor, living in an estimated 80 million hectare of semi-arid regions, have to benefit from revival of water harvesting systems, public policy must be geared to transform the highly inefficient and ineffective water resource management system. Yugandhar has rightly advocated ruthless decentralization of delivery systems such that the benefits get harvested by those for whom these systems are primarily meant.
In contrast, much of government-led decentralisation is really a misnomer. People take part in government-designed and government-run water programmes. But wherever civil society has revived systems, citizens themselves have also built/revived the associated community institutions for operations and management. Decentralisation must mean that the onus of choosing the right institution rests with the community. Which institutions (panchayat or water user's committee or some other traditional ones) citizens of a region chose should be left for them to decide.
On balance, unless people begin to believe that they can gift water to themselves (through harvesting), they will strengthen the hands of governments that only know how to design new schemes, earmark more allocations and raise additional loans! Despite recent efforts by the civil society groups in reviving traditional water systems vis-à-vis the associated institutional mechanisms, for the time being at least, the movement of storing rainwater is up against water-illiterate governments.