The World Bank reiterates what has been glaringly evident: India will have neither the cash to maintain and build new infrastructure, nor the water required for the economy and its people; and unless current water development and management system goes through dramatic changes, the country's water future will remain turbulent. Making the most out of this prophecy, however, the World Bank has carved out a renewed but controversial niche for itself in reshaping the country's sustainable water future. The Bank's recent report India's Water Economy: Bracing for a Turbulent Future (see link) has caused quite a stir; the craftily packaged assessments and insights only help the legitimise a lending portfolio commensurate with a reform process that favours privatisation. With $3.2 billion in loans for 2005-08 as against $700 million for the previous five years, the Bank has clearly launched itself to drive significant changes in water governance.

Based on a set of commissioned studies by Indian experts, the study has meandered through the muddled waters of the sub-continent to conclude that the country needs the World Bank's money as much as its knowledge to affect a paradigm shift in water management. Through a comprehensive analysis of the country's water economy the report builds a case for increased investment in water infrastructure. The trouble is, the Bank's advocacy for such investment includes a prominent place for its own lending - a clear conflict of interest.

It is true that the gap between tariffs and value of water supply services has fuelled endemic corruption in the water sector. As demand outpaces supply, the deficit of funds needed to sustain under-priced delivery has grown. This does not mean, however, that the World Bank's recipes offer a good solution; the lender's track record in affecting reforms in the water sector across different countries is highly questionable, so even if it has correctly identified the problem India should be wary of its proposed solutions. Unfortunately, given the current emphasis on infrastructure development, the Bank's report finds favour with politicians and planners of every hue as it advocates building dams and irrigation networks - the sort of investment from which corruption has poured over the years. Consultations with several ministries including Water Resources and Finance have yielded strong endorsement of re-engagement with the apex bank in the full-range of water-related issues, including the big and the complex.

Unfortunately, given the current emphasis on infrastructure development, the Bank's report finds favour with politicians and planners of every hue as it advocates building dams and irrigation networks - the sort of investment from which corruption has poured over the years.

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Interestingly, the report interprets available information to suit its prescription. It quotes a study by the International Food Policy Research Institute to argue that the poor and the landless have gained as much as 125% from the massive Nagarjunasagar project on the Krishna River by way of wage employment. Further, the report highlights the World Bank's own assessment of the Bhakra dam that adds to its overwhelming 'pro-poor' thesis of large dams. These, the report argues, are reason enough for India to increase its stock of water infrastructure, even if it were to be at the cost of massive displacements!

Such an assessment could at best be seen as motivated, as it ignores reams of literature that presents counter-position on dams. Moreover, reading the report one senses that the Bank recognises problems with past policies and implementation, only to thereafter urge more of the same, completely ignoring the evidence of past failures. Thus, though the report is critical of an enormous backlog of deferred maintenance of existing infrastructure that reflects water machinery's gross inefficiency and lack of accountability, its prescription - increased lending to better infrastructure - could end up repeating the same mistakes, and leave India footing an even larger bill.

India must store as much water as possible to fight poverty, the report notes. Storage structures alone can plug the leak as 50 per cent of precipitation falls in just 15 days and over 90 per cent of river flows occurs in just four months in the country. Currently, India stores only about 30 days of its rainfall, compared to 900 days in major river basins in arid areas of developed countries. Citing rapid glacial melting and increased variability of rainfall, the report argues that the need for storage will grow as India braces up to confront global climate change. However, it fails to present any credible evidence that establishes a correlation between large water bodies and climatic change!

Nor is there any explanation as to why this storage needs to happen in mega-projects. The report underlines the fact that 'all water is local and each place is different' and hence 'one size will not fit all', yet it advocates creating a monoculture of engineering infrastructure (dams and irrigation network) that are rarely site-specific. How should the storage capacity be increased? Should it be at the cost of displacing millions of poor through submergence of fertile lands or should it be through engagement of the communities in reviving water bodies across the country? Ironically, if the current rate of siltation of country's reservoirs is any indication, 65 billion cubic metres - 38% of the capacity for storage - will get filled by silt in the next 40 years. Should such structures be promoted nonetheless?

There is no doubt that to meet rising demand for potable water and food the country would need to bring its per capita water storage (200 cubic metres) at par with that of say, China (1000 cubic metres). But increased storage need not result from large infrastructure projects only, especially if those projects are all silting up! Numerous much smaller efforts by local communities could produce the same result. Oddly enough, while the report itself acknowledges that the 'era of the individual coping strategies' has been remarkably successful and that communities are the country's greatest 'assets', its prescription continues to ignore both. The report argues in favour of reforming the water sector but fails to acknowledge the need for institution building at the local level to bring about paradigm shift in water governance. The report paints a gloomy picture apparently only to justify increasing the Bank's lending stakes.

India needs to be able to separate the World Bank's advocacy of particular reforms from its interest as a lending institution. For too long the institution has worn its 'development' hat while making solemn pronouncements of problems, and quickly switched to its 'moneylender' hat as soon as it is time for solutions.