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Review ofWorld Bank Support to theRural Water Supply and Sanitation Sector in India (1991 - 2011)

Government of IndiaMinistry of Drinking Water and Sanitation

October 2012

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73836

Review ofWorld Bank Support to the

Rural Water Supply and Sanitation Sector

In India (1991 - 2011)

October 2012


The authors of this report are Bill Kingdom, Smita Misra, Christophe Prevost and Martin Gambrill. Suryanarayan Satish, Shyamal Sarkar, N. V. V. Raghava, Ghanasham V. Abhyankar, R. R. Mohan, Robert Roche, Somnath Sen, Ramesh Mukalla, Suseel Samuel, Kullapa Mariappa, Rajiv Raman, Mark Ellery and Nick Pilgrim provided important contributions in the preparation of the report. Valuable comments were received on the fi nal draft from Maria Angelica Sotomayor, Mike Webster and Cathy Revels who acted as Peer Reviewers. The team would like also to express its gratitude to the Department of Drinking Water and Sanitation (DDWS), now the Ministry of Drinking Water and Sanitation, for its support in undertaking this review.

Acknowledgment

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247, ‘A’ Wing, Nirman Bhawan, New Delhi-110011Tel. : 23061207, 23061245 Fax : 23062715

E-mail : [email protected] : www.ddws.nic.in

F O R E W O R D

The World Bank has partnered with Government of India in the Water and Sanitation sector since two decades. The major contribution of the bank in this sector is bringing in innovative models which are community based. The results of this can be seen in this report. The task is not simple. The water and sanitation sector is wrought with challenges like water security & sustainability and behavioural change. While appreciating the contribution of the World Bank and its professionals in this sector, we look forward to future partnerships as well.

(Vilasini Ramachandran)

New DelhiJuly 02, 2012

This review, undertaken jointly by the World Bank and the Water and Sanitation Program at the request of the Ministry of Drinking Water and Sanitation, presents the results of a 20-year partnership between India and the World Bank in the rural water supply and sanitation (RWSS) sector. Over this period the Government of India (GoI) has increased access to improved drinking water sources from 63 percent of the rural population in 1990 to 90 percent in 2010 – a total of some 360 million people. At the same time access to an improved sanitation facility increased from 7 percent in 1990 to 23 percent in 2010, equivalent to some 150 million people1.

The World Bank’s partnership with the GoI has evolved through three generations of investment projects in six states. Each project has built on the experience gained from its predecessors, and each has continued to advance sector practice and improve service delivery. Along with the investment projects a number of analytical and advisory activities have contributed to the dialogue and the reform program in the sector. This review describes the major contributions to the sector resulting from these engagements. It also presents the results of a sustainability survey of a sample of water supply schemes developed under the Bank-assisted projects and identifi es the lessons learned over this period.

The major contributions of the Bank, through this partnership, come from the successful implementation of innovative institutional models at scale. These models are built around inclusive, community-based, participatory, demand-responsive approaches to implementing RWSS infrastructure. The result is improved fi nancial, technical and environmental sustainability and high community satisfaction with the service. At the same time the projects have contributed to improved capacity amongst state RWSS departments, sector institutions, local governments and communities, and to the broader development agenda through the integration of improved governance and accountability aspects into project designs. Over two decades this partnership has provided some 24 million people with access to improved water supplies and 17 million to improved sanitation.

The review also highlights a number of challenges. Water security is a major and growing threat to the sustainability of rural water supply which requires a broader view of the water cycle, particularly the impact of agricultural practices on water availability and quality. While communities and local governments play a critical role in service delivery, they need ongoing technical, institutional and fi nancial support to ensure long term sustainability of schemes. As a result linkages between the communities/local government and higher levels of government need to be formalized and reinforced. The sustainability of multi-village schemes remains elusive and increasing expectations from customers for higher levels of service will require the introduction of new technical, institutional and fi nancial solutions.

A central message of the report is the on-going challenge to institutionalize and scale-up the proven policies and strategies promoted by the Government of India’s Sector Reform Project and Swajaldhara Program and by Bank-assisted projects. This will not be a simple task. Failure to achieve this scale–up, however, will continue to leave the sector at risk of underperformance, ineffi cient investment, as well as inadequate and unsustainable service delivery.

We sincerely appreciate the contributions of the sector professionals throughout the country who have worked tirelessly to provide sustainable drinking water and sanitation services to the rural people of India.

Jose Luis Irogoyen N. Roberto Zagha

Acting Chair, WSP Council Country Director, World BankDirector, Transport, Water and ICTs, World Bank

1 According to the Joint Monitoring Program of the WHO & UNICEF

Foreword

4

Review of World Bank Support to the Rural Water Supply and Sanitation Sector In India (1991 - 2011)

ARWSP Accelerated Rural Water Supply Programme

BGs Benefi ciary Groups

BRCs Block Resource Centers

CDD Community-driven Development

DDWS Department of Drinking Water and Sanitation

DRA Demand Responsive Approach

ES Environmental Sanitation

GoI Government of India

GPs Gram Panchayats

HSP Hygiene and Sanitation Promotion

IEC Information, Education and Communication

Lpcd Liters per capita per day

M&E Monitoring and Evaluation

MoDWS Ministry of Drinking Water and Sanitation

MVS Multi-village Schemes

NGP Nirmal Gram Puruskar

NRDWP National Rural Drinking Water Programme

O&M Operation and Maintenance

PHED Public Health Engineering Department

PRIs Panchayat Raj Institutions

RGNDWM Rajiv Gandhi National Drinking Water Mission

Rs Indian Rupee

SRP Sector Reform Project

SVS Single-village Scheme

SWAp Sector-wide Approach

SWSM State Water and Sanitation Mission

TP Taluka Panchayat

TSC Total Sanitation Campaign

VWSC Village Water and Sanitation Committee

WS Water Supply

WSP Water and Sanitation Program

WSS Water Supply and Sanitation

ZP Zilla Panchayat

Acronyms

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October 2012

Executive Summary 6

I. Review Objectives and Rural Water Supply and Sanitation Sector Background 14

II. Evolution of Bank Assistance to the RWSS Sector in India 17

III. The World Bank’s Main Contributions to the RWSS Sector in India 29

IV. Sustainability of World Bank Rural Water Supply Schemes 32

V. The World Bank’s Main Contributions to the Sanitation Agenda 35

VI. Lessons Learned from the World Bank Experience in RWSS 36

VII. Conclusions and Way Ahead 41

ANNEX I 42

ANNEX II 45

References 46

Contents

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Review of World Bank Support to the Rural Water Supply and Sanitation Sector In India (1991 - 2011)Rev

Executive Summary

I n India, rural water supply and sanitation are the constitutional responsibilities of state governments. However, in the last two decades these services have become a national priority. Currently, annual

investment by the Government of India (GoI) in rural drinking water supply exceeds USD one billion. Together, the GoI and state governments have spent about USD 25 billion in the last 20 years, providing rural drinking water services to 700 million people in 1.5 million villages. This has been channeled through the Accelerated Rural Water Supply Programme (ARWSP) launched in 1972 and renamed the National Rural Drinking Water Programme (NRDWP) in 2009.

Historically, GoI’s approach to drinking water supply has focused on fi nancing investment for asset creation to enhance access to drinking water services. Although this has led to over 95 percent access in rural areas, concern has been raised over the sustainability of this approach. As a result, since the 1990s, GoI has been identifying and testing reform options, such as the Sector Reform Project and the Swajaldhara Program2, to attempt to ensure 100 percent access to safe and sustainable drinking water.

GoI, along with seven states, have partnered with the World Bank in implementing rural water supply and sanitation (RWSS) projects. The Bank has approved the following nine dedicated RWSS projects in India:

• First Maharashtra RWSS project (1991-1998)

• First Karnataka RWSS project (1993-2000)

• First Uttar Pradesh and Uttarakhand RWSS project (1996-2002)

• First Kerala RWSS project (2001-2008)

• Second Karnataka RWSS project (2002–ongoing with additional fi nancing through 2013)

• Second Maharashtra RWSS project (2003-2009)

• Second Uttarakhand3 RWSS project (2006-2014)

• Punjab RWSS project (2007-2013)

• Andhra Pradesh RWSS project (2009-2014)

The Second Kerala RWSS project has been recently approved and the Third Maharashtra RWSS project and the National RWSS project for Lagging States are under preparation. The location and key features of all nine projects are shown in the table and map at the end of this summary. Over two decades, these ongoing and concluded World Bank-assisted RWSS projects will have contributed more than USD 1.4 billion of fi nancing and benefi ted about 24 million rural inhabitants in over 15,000 villages in India with populations ranging from 150 to 15,000.

This review of World Bank support to rural water supply and sanitation in India was requested by the Secretary of the Department of Drinking Water and Sanitation (DDWS) of the Ministry of Rural Development (now the Ministry of Drinking Water and Sanitation). The aim of this review is to document:

• the evolution of the World Bank’s support to the RWSS sector;

• the major contributions to the sector resulting from these engagements;

• the sustainability of schemes developed under Bank-fi nanced projects; and

• the lessons learned to date from this signifi cant partnership.

2 Guidelines on Swajaldhara, RGNDWM, June 2003. http://ddws.nic.in/Data/Swajal/sw_guidelines.htm.3 Uttarakhand was formerly known as Uttaranchal

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This report draws on (i) a desk review of project documents, aides-memoires and implementation completion reports of the nine World Bank funded projects, (ii) the Scheme Sustainability Survey—a fi eld study of RWSS schemes implemented under World Bank projects; (iii) interviews and discussions with community, local government, NGO and state project implementers and other stakeholders; and (iv) interviews and discussions with former and current Bank RWSS task team leaders.

Evolution of World Bank-Supported Projects

The World Bank’s partnership with GoI has evolved through a series of investment projects. Three generations of projects have been identifi ed, each one building on the lessons learnt from earlier generations, and each one continuing to advance sector practice and improve service delivery.

The fi rst generation of Bank-assisted RWSS projects (approved during 1991-1996) were community-driven development (CDD) projects. These projects included the “Swajal”4 Project in Uttar Pradesh and Uttarakhand (1996)—forerunners to the GoI’s RWSS Sector Reform Project and Swajaldhara Program. These projects introduced new institutional models and were aligned with the then emerging national policy principles of the reform approach. They supported the access agenda for water and sanitation and introduced the demand-responsive approach (DRA) comprising decentralized planning by user groups according to their preferences and willingness-to-pay. This approach included capital-cost sharing and a commitment to a full operation and maintenance (O&M) cost recovery policy—signaling benefi ciaries’ eff ective demand for water—and an integrated approach to water, sanitation and health/hygiene behavior.

The overriding objectives of this approach was to ensure sustainable service delivery of safe and adequate quantities of potable water to rural and small town communities while transforming government agencies from providers to facilitators. The demand responsive approach also promoted the use of NGOs and private sector consultants to support rural communities in RWSS subproject implementation.

In the 2000s, the second generation of World Bank-assisted RWSS projects was guided by India’s 73rd Constitutional Amendment, transferring RWSS functions to local governments (Panchayat Raj Institutions, PRIs5). Bank projects focused on the long-term general sustainability of RWSS schemes and, in particular, whether user groups and village water and sanitation committees (VWSCs) could meet O&M management and cost recovery challenges. These projects further promoted the decentralization of service delivery responsibility to the PRIs—specifi cally to village-level governments (Gram Panchayats, GPs)—and to user groups, including the transfer of investment fund management.

From 2005, a third generation of World Bank RWSS projects advanced the decentralization and sustainability agenda through the use of sector-wide approaches (SWAps). The Bank’s support thus started to move from a traditional project-based approach to programmatic approaches supporting agreed sector strategies, policies, systems and procedures—representing another paradigm shift in the reform program. The SWAp approach includes using a common framework for planning, implementation, expenditure, and monitoring and evaluation across the state or district, irrespective of the source of funding or the implementing agency.

Major Contributions of World Bank Projects

The World Bank’s main contributions to the sector during the last two decades cover a wide array of project activities across the following sectoral themes:

4 “Swajal” means “own water”5 Panchayati Raj is a system of governance encompassing lower tiers of government, in which gram panchayats (village governments, GPs) are one of the basic units of administration.

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• Implementing new institutional models at scale;

• Demonstrating inclusive community-based, participatory, demand-responsive approaches;

• Building the capacity of state RWSS departments, sector institutions, local governments, NGOs and the local private sector, and communities;

• Integrating governance and accountability aspects into project designs;

• Improving sustainability—fi nancial sustainability of programs, water source sustainability, service delivery sustainability—and ongoing community satisfaction;

• Designing and implementing consistent sector-wide approaches at the state and district level to scale up reforms; and

• Enabling the achievement of ‘open defecation free’ villages through eff ective sanitation programs, advancing the household sanitation agenda and starting to tackle next generation sanitation challenges of community-centric solid and liquid waste management.

Key Findings of Analytical Studies

In addition, the World Bank has carried out two major analytical studies which have informed its work in the RWSS sector in India: Bridging the Gap between Infrastructure and Service in 2006; and a Review of Eff ectiveness of Rural Water Supply Schemes in India in 20086. These studies found that while access to water and sanitation infrastructure is increasing in India, access to reliable, sustainable and aff ordable water and sanitation service is lagging behind. The crucial challenge is not to simply provide infrastructure to all of the population, but to increase access to reliable, sustainable and aff ordable services. Both studies conclude that India is unlikely to meet this objective unless it adjusts its policies, institutional arrangements and fi nancial incentives to improve service delivery and build capacity.

The Review of Eff ectiveness study, based on primary data collected from more than 700 schemes across ten states, showed that about 30 percent of households using piped water schemes do not receive a daily supply in the summer months (some do not even in other seasons) and most households do not receive the GoI norm of 40 liters per capita per day (lpcd) from schemes, receiving only an average of about 25 lpcd. The study also noted that about 50 percent of households under schemes implemented by state public health engineering departments (PHEDs) depend on supplementary public and private sources, in addition to supply from the main PHED schemes, demonstrating a serious shortfall in sustainable services of suffi cient quantity. As a result, households incur huge coping costs for meeting their daily needs.

Results from the Scheme Sustainability Survey

As a part of this review of Bank-supported projects, a Scheme Sustainability Survey was undertaken in 2010. This comprised a fi eld study conducted over a sample of 75 piped water schemes across the states of Kerala, Karnataka, Maharashtra and Uttarakhand. This survey shows that 87 percent of the schemes in World Bank-assisted RWSS projects are still functioning well at least three years after commissioning. Customer groups in about three-quarters of the schemes7 had a good perception of both the quantity and the reliability of

6 This report, based on a rigorous contingent valuation survey of 40,000 rural households across ten states, reviewed the eff ectiveness of the traditional rural water schemes of state governments, across ten states in India, and is used as a benchmark/comparator to the fi ndings regarding the Bank-supported DRA projects.7 This data is based on response in meetings and discussions, and as reported by the VWSC/BG, GP and key informants in the village—not from household interviews.

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the potable water services provided by the schemes. Eighty percent of the schemes provide more than 40 lpcd, even in the summer season, and a quarter of the schemes have achieved supply levels above 70 lpcd, providing water for one to four hours daily as per the original design parameters of the scheme. The level of service provided in these schemes complies with the demand expressed by the communities and with GoI norms at the time of implementation of the respective projects. The level of service, quantity, and availability of water in the World Bank-assisted RWSS schemes observed during the fi eld survey compares well to the results of the 2008 Review of Eff ectiveness study and to the GoI offi cial norms of rural water access in India8.

In addition, more than 60 percent of the Bank-supported schemes surveyed as part of the Scheme Sustainability Survey demonstrated the ability to cover at least their operating expenses through the collection of user fees. Again, this result compares favorably to the typical 21 percent O&M cost recovery under the traditional PHED piped water supply schemes surveyed under the Review of Eff ectiveness study.

Although Bank-supported RWSS schemes have performed strongly, the Scheme Sustainability Survey identifi ed a number of areas for potential improvement. These generally refl ect the need for ongoing oversight of the VWSCs by the GP and/or the Zilla Panchayat (ZP) governments. Further technical support is necessary to continue to build the capacity of the VWSCs. Other areas for improvement that emerged from the fi eld survey include the unreliable electricity supply reported in about half of the schemes and the water resource challenge of maintaining raw water supply of suffi cient quantity and quality for the schemes throughout the year, especially in the dry months. Approximately 20 percent of the schemes surveyed receive less than 40 lpcd supply in the summer months with 5 percent receiving less than 25 lpcd. This highlights the acute crisis encountered during the drier months in some locations. Such problems however, which vary from state to state and within individual states, are not specifi c to the World Bank-assisted projects and are consistent with those observed throughout the country as recognized by ongoing the Ministry of Drinking Water and Sanitation (MoDWS) initiatives on the issue of water sustainability.

Lessons Learned

The three generations of World Bank-assisted projects have both informed and successfully demonstrated the principles of the GoI’s approach to reform as articulated by the Sector Reform Project and the Swajaldhara Program. These projects developed clear sets of structured processes and procedures necessary to decentralize service delivery systems, thereby making the PRIs and the communities responsible for planning, designing, implementing and maintaining schemes.

The community-managed, demand-responsive approach, integrated into the responsibilities of the PRIs, has demonstrated the viability of the reform approach in improving service delivery. This integration is essential for institutional sustainability because local governments can provide long-term oversight and support, as well as an important long-term link in support of VWSCs.

The Bank-supported projects have demonstrated that community-led procurement can reduce the capital costs of the water supply schemes signifi cantly. The demand-responsive approach requires communities and local governments to contribute to the capital costs of the rural water supply schemes (15 percent and 10 percent, respectively under the fi rst Kerala project). This means that the GoI and state governments can provide smaller subsidies to the sector on a per capita basis and hence reach a greater proportion of the population for any given amount of capital subsidy.

8 Access to rural water supply infrastructure in India is defi ned as access to an average of 40 liters per capita per day within a distance of 1.6 kilometers or, in hilly areas, within an elevation of 100 meters. Coverage: Habitations are villages with more than 100 people. Not Covered (NC) habitation is defi ned as less than 10 liters per capita day , or Partially Covered (PC is between 10 and 40 lpcd availability and more than 40 lpcd being the norm for being FC or Fully Covered).

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The Bank-assisted projects have helped defi ne the relationship between the Gram Panchayats, the VWSCs/Benefi ciary Groups (BGs) and the water operators: some of the third generation projects have established a clear relationship of accountability between these three stakeholder groups. The need for, and importance of, these links and responsibilities has been clarifi ed since the earlier generation of Bank–supported projects, although further improvements in this regard are still needed.

Large single and large multi-village/multi-GP water supply systems are diffi cult to operate and maintain solely by community groups. Generally, these types of water supply systems require a small utility-like service provider to operate and maintain them properly, complemented by a separate oversight group to supervise the operator and to plan future expansion.

Over the last two decades, the demand from communities for higher levels of service has increased signifi cantly and this is likely to continue to grow. Households in the 1990s were generally satisfi ed with open well and hand pump supplies. However, demand has clearly moved toward household piped water connections. The proportion of open wells and hand pumps implemented under Bank projects has constantly decreased over time, and the proportion of piped water systems constructed (with concomitant higher levels of household services) has increased, to eventually become the predominant solution proposed to communities under the projects. During this time, piped water service delivery moved progressively from communal stand posts to more household connections.

Similarly, the technical service standards for the piped water systems implemented under the Bank RWSS projects have progressively evolved from one to four hours daily supply in the fi rst and second generation projects to fl exible norms under more recent Bank projects, including a shift towards 24/7 supplies, as piloted under the Bank-supported Punjab RWSS project. The technical service standards refl ect both the needs and the demands of the community as well as the GoI norms prevalent during the preparation and implementation phases of the Bank projects.

Another feature of Bank-assisted projects is to integrate the planning and implementation of water supply schemes with catchment area protection, household sanitation (latrines), village sanitation (solid waste management and drainage), and health and hygiene awareness promotion—important elements for maximizing health and environmental benefi ts.

Water quality and scarcity of water resources have emerged as the biggest challenges for the sustainability of rural water supply services. In the last ten years the number of communities aff ected by water quality problems has been rising and solutions for water treatment to potable/acceptable levels are proving increasingly complex. Source sustainability – i.e., the water quantity issue – is equally a challenge, as evident in the fi eld survey. Experience gained from World Bank projects that have already successfully addressed these issues will provide a basis on which further refi ning and scaling-up can fully integrate water resource management, water demand-side management and water service levels into the design of quality- and quantity-secure drinking water supplies.

Under the Bank-supported Maharashtra projects, a successful Aquifer Pilot Program has emerged as a rational tool to improve the sustainability of groundwater in meeting competing demands such as drinking water, other domestic needs, and agriculture. Under the Second Kerala RWSS project, water resources security mapping has been refi ned and is now an integral part of the GP-wide planning of water supply system development.

Although World Bank-assisted RWSS projects have continuously informed GoI’s programs and policies, these projects have often had a limited impact on the states’ sector practices, policies and institutions. The main challenge is the multiple GoI and state programs and institutional approaches that co-exist at the state, district and, sometimes, at the Gram Panchayat levels. With about 90 percent of funding for traditional programs focusing on infrastructure coverage, most state RWSS sector investments are still implemented using top-

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down approaches, even in those states where Bank-assisted projects have demonstrated a viable alternative approach for sustainable service provision. This approach persists because there are few incentives for, and many obstacles to, PHEDs to empower the PRIs and decentralize service delivery responsibilities.

Despite this lack of incentive, the three generations of Bank projects have piloted and progressively scaled-up a number of institutional models, appropriate for diff erent states, market segments, and local conditions. Statewide and district SWAps off er an alternative for states to engage with their sector institutions in the reform process. The SWAp methodology, combining programmatic, decentralized service delivery approaches, professional scheme management and institutional post construction support is one way of ensuring successful scale-up and adoption statewide to meet the growing water supply needs of rural populations.

The approaches advocated by GoI and a few states under the Sector Reform Project, the Swajaldhara Program and the Bank-supported projects, have demonstrated their success regarding sustainability, but also illustrate two key issues. Firstly, there are always new technical challenges to ensure the delivery of sustainable rural water and sanitation services. These challenges include increasing the level of service provided to households to meet growing demands, maintaining the adequacy of raw water quantity and quality, and making professional technical back-up available to service providers. Secondly, and more importantly, is how to mainstream the successful DRA in states still using GoI funds to do RWSS in a ‘business as usual’, top-down, engineering-based way even though the DRA models have clearly demonstrated the delivery of improved and sustainable services at lower total costs. This is a more complex challenge as it requires understanding and addressing the existing political economy, incentives and interests in the sector. Further study is needed to better understand and address these issues.

Looking Forward

This review illustrates the ongoing challenge to deliver sustainable rural water and sanitation. Each generation of Bank-supported projects has faced new challenges as the sector responds to the backlog in service provision spurred by the ever-rising expectations of rural communities. Eventually, a mature sector will evolve with a focus on infrastructure maintenance, operational effi ciency and resource management.

On-going technical and institutional improvements should continue to be incorporated into the next generation of World Bank-supported projects and Water and Sanitation Program (WSP) knowledge products. Appropriate implementation and management models for multi–village schemes (MVSs) or multi-GP schemes are important issues, especially concerning the issue of how to link GPs and VWSCs to higher levels of government for the sustainability of support that the more sophisticated MVSs systems require. It is also necessary to address the next generation of community-centric sanitation issues linked to solid and liquid waste management.

However, the single most important challenge for the RWSS sector in India is to institutionalize and scale-up successful and proven policies and strategies demonstrated through, inter alia, the various Bank-supported projects. While such scaling-up is essential for the provision of sustainable water supply and sanitation facilities, it has been diffi cult to achieve. Building capacity at the community level, and changing the role of parastatals from implementers to facilitators, are not simple tasks. However, failure to achieve this scale up places the sector at risk of continued underperformance, ineffi cient investment, as well as inadequate and unsustainable service delivery. The critical question is how to scale-up the positive experiences as promoted by GoI through its Swajaldara Program and Sector Reform Project (SRP), and as demonstrated through the Bank-supported projects.

Currently such scale-up is restricted, mainly through a continued bias in funding toward traditional top-down programs (which attract about 90 percent of all funding) and in providing O&M subsidies—both of which provide support to ‘business as usual’ behavior.

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If scale-up is to occur, GoI, with appropriate support from WSP and the World Bank, needs to establish the underlying causes of the slow pace of the scale-up to date, and identify possible solutions. These include: (i) publicizing the successes of, and creating demand for, decentralized, bottom-up approaches through the Panchayat Raj Institutions; (ii) providing fi nancial incentives through GoI and state programs that specifi cally target the scaling-up of successful DRA and decentralized approaches; (iii) opening a special window of GoI assistance to support reform programs to build on these proven successes; (iv) providing technical assistance to foster sustainability through state/district/GP/village water security planning and to promote the scaling-up of decentralized services through cost-eff ective SVSs and MVSs; and (v) building capacity of the sector institutions, PRIs and other stakeholders to enable them to understand their new roles and responsibilities. These suggested areas of action should be actively debated in order to create buy-in across the main sector stakeholders and to encourage the evolution of a new framework for the sector.

Figure 1: Location of World Bank Rural Water Supply & Sanitation Assisted Projects in India

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Table I: Summary of Key Features of World Bank-Assisted Rural Water Supply & Sanitation Projects

Project Objective Technology Output Cost (US$ million)

Maharashtra 11991-1998

Raise the standard of living via better health and productivity from access to WS & ES.

Hand pumps: population <1000.Piped system: population >2000.VIP latrines

1.7 million people in 1060 villages

WS:86.0ES: 9.0HSP: 5.0IS: 5.0

Karnataka 11993-2000

Raise the standard of living via better health and productivity from access to WS & ES.

Combination of HPs and stand posts. Provided individual connections, power line extensions for electric pumps, and devices to control power and voltage changes. VIP latrines and sullage drains


WS:$71mES: $29mHSP: $1mIS: $17m

Uttar Pradesh1996-2002

Sustainable health and hygiene via time savings and extra income from improved WS & ES.

400 to 2000 people/scheme.Mix of technologies employing surface and groundwater, gravity and pumped schemes.VIP and pour fl ush latrines, sullage drains.


IS: $8mWS&ES: $60mSD: $2.5m

Kerala 12000-2008

Improve WS & ES through cost recovery and building the state's capacity to scale up decentralized service delivery.

Mostly piped systems for settlements serving about 250 people based on groundwater. 70% household connections.New and upgraded latrines.Drainage for rainwater and sullage.

1.1 million people in 3,700 villages100% household with water connections

IS: $11mWS&ES:$75mSD: $4m

Karnataka 22002-2013

Increase access to improved & sustainable WS & ES. Institutionalize decentralized WS services.

Springs, HPs and open wells used for villages with <500 people.Piped systems based on level of service aff ordable to community.Drainage and lane improvement.Twin pit, pour-fl ush latrines.

5 million people in 2100 villages, 47% household with water connections

WS&ES:$166mIS: $21mSD: $6m

Maharashtra 22003-2009

Increase access to improved/sustainable WS institutionalize decentralized WS service delivery in districts and communities.

HPs and piped systems with stand posts and house connections. Attention to source sustainability and ground water recharge.Latrines, solid waste, and drainage.

6.7 million people in 2300 villages- 61% project GPs (ODF) -3000 GPs

WS&ES:$187mIS:$55mSD:$5mPilot:$5m

Uttarakhand2006-2014

Improve eff ectiveness of RWSS services through decentralization and increased role of PRIs and involvement of local communities.

Piped water systems with spring/stream sources in hilly areas and surface water sources in the plain areas, and distribution with stand posts and private connections. Household toilets, solid and liquid waste management. Integrated approach for source sustainability, water supply, and sanitation.

1.2 million people expected in 3750 villages

WS&ES:$103.4mIS: $11.6mSD: $5m

Punjab2007-2013

Increase access of rural communities to improved and sustainable rural water supply and sanitation services.

New/upgraded piped systems with tube well and canal sources providing at least 40 lpcd. Sullage drains where septic tank overfl ows are a problem.

Bank component1.5 million people expectedin 1,200 villages

IS: $32mCD: $24m WS&ES:$20m

Andhra Pradesh2009-2014

Improve rural water supply and sanitation services through progressive decentralization, community participation and enhanced accountability

Piped systems, using mostly groundwater for SVS and surface water for MVS with source protection sustainability measures.Household toilets, solid and liquid waste management.

1.2 million people expected in 1000 villages

SD:$12mWS&ES:$154mIS:$14m

* WS-Water Supply; ES-Environmental Sanitation; HSP-Household (Health/Hygiene) Sanitation Program; IS-Implementation Support; SD-Sector Development; CD- Capacity Development; HP – hand pumps; ODF- Open Defecation Free

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Review Objectives

This review of World Bank-assisted rural water supply and sanitation (RWSS) projects in India was carried out at the request of the Secretary of the Department of Drinking Water and Sanitation (DDWS)—now the Ministry of Drinking Water and Sanitation—of the Ministry of Rural Development, Government of India (GoI) to refl ect on the experience gained over the past two decades.

This review has the following objectives:

1. To map the evolution of World Bank RWSS engagement with the GoI since 1990

2. To assess the main contributions to the sector of the World Bank’s assistance

3. To evaluate the sustainability of World Bank water schemes through a fi eld survey

4. To assess the lessons learnt from the World Bank’s engagement and to identify the next generation of technical and institutional challenges facing the sector

The review consisted of a desk study of all nine World Bank projects implemented over the last 20 years, as well as fi eld surveys from February to May 2010. Field surveys were conducted in a limited sample of 75 piped water schemes across 12 districts in Kerala (30 schemes), Karnataka (30 schemes), and Maharashtra (15 schemes). Some schemes were also visited in Uttarakhand to understand the new sector-wide approach under implementation there.

It is expected that the fi ndings of this review will assist in the preparation of a strategy by the World Bank and the Water and Sanitation Program (WSP) to support GoI and state governments to deliver improved and sustainable service to rural dwellers.

RWSS Sector Background

India has long faced the challenge of providing safe drinking water to over 700 million people in more than 1.5 million villages. The GoI’s intervention in rural water supply started with the Accelerated Rural Water Supply Program in 1972 (see Box I for key dates concerning the RWSS sector in India) and became a national priority with the introduction of the National Drinking Water Mission in the mid-1980s. This was later renamed the Rajiv Gandhi National Drinking Water Mission, and institutionalized with the creation of the Department of Drinking Water Supply and Sanitation (DDWSS) within GoI’s Ministry of Rural Development in 1999 (see Annex I).

In recent years, rural water supply sector expenditures have risen to about USD 2.5 billion per year, made of USD one billion from GoI and USD 1.5 billion from state governments, local governments and communities. This is the biggest rural water program in the world. Rural water coverage in India grew from 30 percent to 70 percent between 1981 and 1990 during the International Drinking Water and Sanitation Decade, and increased again from 70 percent to 90 percent between 1991 and 2000—a considerable achievement. However, over the last decade, source sustainability, water quality problems and inadequate scheme operation and maintenance (O&M) have been formidable constraints to achieving a higher level of service for the rural population. According to DDWS, 30 percent of systems each year revert to the status of ‘partially covered’ (meaning they provide on average 10-40 lpcd) or ‘not covered’ (providing less than 10 lpcd). Other challenges include the management of multi-village schemes, strengthening links between diff erent levels of

I. Review Objectives and Rural Water Supply and Sanitation Sector Background

15

October 2012

government, improving monitoring and evaluation (M&E) systems to better inform policy makers, and scaling up the reform approach to extract its full benefi t.

As a result of this situation, GoI developed guidelines in 2009 to address the main issues that are constraining progress. The new National Rural Drinking Water Program (NRDWP) focuses on ensuring drinking water security in rural India. It has the stated goal “to provide every rural person with adequate safe water for drinking, cooking and other domestic basic needs on a sustainable basis. This basic requirement should meet minimum water quality standards and be readily and conveniently accessible at all times and in all situations” (see Annex II). Also, in recognition of the importance of scaling-up and the PRI/community-led decentralized approaches for improving the sustainability of schemes, the NRDWP has allocated 20 percent of its funds under its ‘sustainability component’ to encourage states to achieve drinking water security through the sustainability of sources and systems. This allocation was reduced to 10 percent for 2010-2011 and 2011-2012, followed by a specially designed ‘devolution index’ to incentivize and monitor the use of these funds.

Box I illustrates how three generations of Bank-supported RWSS projects have helped the GoI advance knowledge and practice through the implementation of pragmatic reforms at each stage of the sector’s development.

Box I: Key Dates for the Rural Water Sector in India and the Bank-assisted RWSS Program

1972: GoI launched the Accelerated Rural Water Supply Programme (ARWSP) as a 100% grant to state governments using supply-driven institutional approaches to cover all rural habitations with water and sanitation services.

1985: Rural water received major priority nationally with the introduction of the National Drinking Water Mission (later renamed the Rajiv Gandhi National Drinking Water Mission (RGNDWM)).

1990: The New Delhi Declaration formed the basis of India’s Eighth Five-Year Plan (1992-1997), which refl ected the growing importance of environmental sustainability and integrated water resource management. Community participation, especially in O&M and cost recovery was articulated, albeit weakly.

1990s: World Bank - First Generation of RWSS Projects introduced Community Management and Demand Responsive Approaches

1993: 73rd Constitutional Amendment Act made it mandatory for states to ratify their own decentralization laws and devolve powers and responsibilities from state departments and agencies to elected local governments at the village, sub-district and district levels. Rural water and sanitation were two of the 29 items devolved to local governments, and public health engineering departments (PHEDs) and water boards were meant to become facilitators to local governments.

1999: Coverage had risen to 95%. The Tenth Five-Year Plan (2002-2007) subsequently recognized that high levels of physical provision had been achieved but at the cost of inadequate attention to resource sustainability, institutional ownership, fi nancial and O&M management, and water quality issues. In addition, there was a lack of responsiveness to local needs and demands of community groups and institutions.

1999: Creation of a separate Department of Drinking Water and Sanitation (DDWS) established as a part of the GoI Ministry of Rural Development.

1999: Launch of the Sector Reform Project (SRP), piloted by RGNDWM, introducing a demand-responsive, community-led approach to rural water supply in 67 districts and 26 states drawing on the experiences of the World Bank-funded Swajal Project in Uttarakhand (formerly known as Uttaranchal). The SRP was largely successful.

2000s: World Bank - Second Generation of Bank-assisted RWSS Projects scaled-up PRI-led institutional models

2003: Launch of the Swajaldhara Program across the nation. RGNDWM scaled up the SRP through the Swajaldhara, a community-led, demand-responsive program across the country. However, RGNDWM and state water departments (PHEDs/water boards) had diffi culty implementing the new program. RGNDWM reverted to centrally-administered formulas to allocate funds to states.

2004: Launch of the state and central government MoU process as an alternative scale-up mechanism, through which it was attempted to provide the framework to guide future releases of Swajaldhara and Total Sanitation Campaign (TSC) funding. The MoU approach sought to alter RWSS reforms within India by bringing all initiatives under a state articulated agenda guided by central principles of the GoI’s reform approach, based on RGNDWM’s new guidelines for the Swajaldhara Program. However, ultimately no MoUs were signed.

16


2004: The Swajaldhara Program was downgraded to a small component of the ARWSP. 90 percent of ARWSP funds continued with 50% GoI and 50% state government funding to address non- and partially-covered habitations, extend coverage to quality-aff ected habitations, and to cover slip-back habitations that were still using supply driven approaches.

2006 onwards: World Bank - Third generation of RWSS projects adopted sector-wide approaches for decentralized service

delivery systems, integrating water supply, sanitation, and source sustainability programs, along with higher levels of service

delivery, including metered 24/7 water supply.

2007: The Eleventh Five-Year Plan (2007-2012) identifi ed one of the major issues in rural water supply, namely that 30 percent of habitations experienced a deterioration of the level of water service due to: (i) falling groundwater tables and surface sources drying up; (ii) sources becoming quality aff ected; and (iii) systems operating below capacity due to poor O&M. It advocated a decentralized approach based on the community-managed, demand-driven, reform approach (Swajaldhara) principles.

2009: Launch of the new National Rural Drinking Water Program (NRDWP) by DDWS, focusing on ensuring drinking water security in rural India. However, traditional PHED top-down approaches still benefi t from 80% of GoI funds and demand-based, community management approaches receive only 20 percent of national allocations under the sustainability component.

2010: Launch of the Drinking Water Security National Pilot Program by DDWS in 10 states and 15 blocks to test, demonstrate and refi ne the institutional and fi scal framework required to deliver drinking water security at scale, through community participatory integrated water resources planning and management approaches to be fi nanced by various government programs.

2011: Preparation of a 2012-2020 Strategic Plan for Rural Drinking Water to provide all rural households with access to piped water supply in adequate quantity with a metered tap connection providing safe drinking water, throughout the year, that meets prevalent national drinking water standards, leading to healthy and well-nourished children and adults and improved livelihoods and education.

17

October 2012

W orld Bank support to India in the water supply and sanitation sector started in the 1970s. Over the fi rst two decades, (1970-1990) Bank support mainly focused on urban water supply and sewerage

projects for metropolitan cities such as Mumbai, Chennai and Hyderabad, and for relatively smaller cities in Maharashtra, Kerala, Tamil Nadu and Rajasthan. Some projects included an RWSS component for rural areas located along the urban water supply conveyance mains or in peri-urban areas.

Figure 2: Evolution of Policies & Institutions through World Bank- supported RWSS Projects

Over the last 20 years, GoI, along with seven states, have partnered with the World Bank in implementing rural water supply and sanitation (RWSS) projects. The Bank has approved nine dedicated RWSS projects in India, namely: the First Maharashtra RWSS project (1991-1998), the First Karnataka RWSS project (1993-2000), the First Uttar Pradesh and Uttarakhand RWSS project (1996-2002), the First Kerala RWSS project (2001-2008), the Second Karnataka RWSS project (2002–ongoing with additional fi nancing through 2013), the Second Maharashtra RWSS project (2003-2009), the Second Uttarakhand RWSS project (2006-2014), the Punjab RWSS project (2007-2013), and the Andhra Pradesh RWSS project (2009-2014). The Bank recently approved the Second Kerala RWSS project and is preparing the Third Maharashtra RWSS project. The nine ongoing or concluded World Bank-assisted RWSS projects will have contributed more than USD 1.4 billion of fi nancing and benefi ted about 24 million rural inhabitants in over 15,000 villages in India with populations ranging from 150 to 15,000.

The evolution of the World Bank’s RWSS sector assistance strategy can be viewed as three generations of projects (see Figure 2), with each project design contributing to further improvement in sector performance. This portfolio of World Bank RWSS projects has – with GoI’s endorsement – pioneered the development,

II. Evolution of Bank Assistance to the RWSS Sector in India

FIRST GENERATION

1990s: Pilot Community

Demand Driven Projects

Maharashtra 1;

Karnataka 1, Uttar

Pradesh

Introduction of Demand-

Responsive Approach

(DRA)

SECOND GENERATION

2000s: Demonstrating

Institutional Models and

Scaling-up Service delivery

through Local Governments

Karnataka 2, Kerala 1,

Maharashtra 2

DRA + Establishing role of the

PRIs and Benefi ciary Groups

THIRD GENERATION

2006 onwards: Adopting

Institutional Models through

Sector-wide Approaches

(SWAPs)

Uttarakhand (State-wide),

Punjab (State-wide) and

Andra Pradesh (District-wide)

DRA + PRI + Sector-wide

RWSS Program

18


and contributed to the refi nement, of the national policies prevalent at the time. The Bank project designs and their respective reform agendas that they each pursued were guided by RWSS strategies drawn from the Bank’s global knowledge and best practice experiences—modifi ed to suit the India country and sector context. These projects used demand-responsive, participatory approaches and promoted decentralized delivery of water and sanitation services through community groups and local governments, through which they sought to infuse community ownership for sustained O&M management and service delivery of safe and adequate water services.

First Generation Projects (Maharashtra 1, Karnataka 1, and Uttar Pradesh, approved

during 1991-1996)

The First Maharashtra RWSS Project (1991-1998) was the fi rst World Bank-fi nanced project to help promote the role of communities in the sustainable operation of rural water supply systems and to increase awareness about the health benefi ts of hygiene education and village sanitation. This innovative project was also the fi rst to integrate water supply, household sanitation (latrines), village sanitation (Solid waste management (SWM) and drains)—collectively referred to as environmental sanitation (ES)—and hygiene and sanitation promotion (HSP), within a single project. The project largely supported traditional infrastructure such as hand pumps, single village piped systems and ventilated improved pit (VIP) latrines. It introduced the use of NGOs in sanitation promotion and implementation, and established Village Water and Sanitation Committees (VWSCs) and third party inspection of construction quality. The project management unit (PMU) was set up within a government department, but the main sector institution (a parastatal) was the lead implementing agency, with a mostly engineering focus. Capital-cost sharing by communities and O&M cost recovery were not part of the project design.

The First Karnataka RWSS Project (1993-2000) built on the Maharashtra success by institutionalizing NGO partnerships to support community mobilization and awareness, and introduced capital-cost sharing for drainage schemes while continuing with integrated water supply, environmental sanitation and HSP. The GPs and VWSCs were more involved in the planning of RWSS schemes, and were responsible for the O&M of both hand pumps and piped systems. The state determined that sanitation should be expanded to include not just household latrines, but also sullage drains, solid waste bins, clothes washing platforms, and biogas plants—i.e. an all-encompassing approach to environmental sanitation. Twenty percent of the total project costs were dedicated to environmental sanitation facilities, one third of which was contributed by the benefi ciary communities. The project also attempted to develop and implement MVSs on a pilot basis. The project was implemented through the engineering departments of the PRIs, but with parallel district-based PMUs established within the district PRI institutions.

The First Uttar Pradesh RWSS Project (including Uttarakhand, 1996-2002) known as Swajal (“own water”) represented a paradigm shift in empowering user groups and moving from community participation to community empowerment with implementation and service delivery responsibility. The project design was based on a successful Bank-assisted RWSS project in Nepal. The district-based PMU and VWSC jointly contracted NGOs to assist communities to plan, design, implement, and learn to operate and maintain their water supply and sanitation facilities. NGOs also facilitated an increase in the role of women as VWSC members, stand post managers, maintenance workers, and hygiene and sanitation promoters. Women also benefi ted from a literacy initiative and gained access to credit through self-help groups. Hygiene and sanitation promotion focused on hand washing before eating, the safe use of water, the safe disposal of infant excreta, and the use of latrines—all vital and practical interventions at the household level. The project is also noteworthy for its emphasis on capacity building. This started with the training of trainers and was followed by extensive training of VWSCs and women’s groups within participating communities. The project was also the fi rst to secure community contributions toward the capital cost of RWSS schemes and community commitment to O&M, including the

19

October 2012

full payment of O&M costs. The project’s main constraint was the limited involvement of the PRIs, the rural local governments, in the development process, as well as the limited engagement of the state government’s main sector institutions (Uttarakhand Jal Nigam and Uttarakhand Jal Sansthan, UJN and UJS).

The main achievement of the fi rst generation projects was the introduction of the demand-responsive approach (DRA) comprising decentralized planning and implementation by user groups according to their preferences. These projects also encouraged capital-cost sharing, a commitment to full O&M cost recovery policies, an integrated approach to water, sanitation and health/hygiene behavior, as well as promoting the use of NGOs and private sector consultants to support rural communities. These fi rst three projects went beyond the requirements of the GoI policy of the time, which did not require an integrated approach to water, sanitation and health/hygiene behavior. The policy also did not require decentralization to GPs and user groups, nor did it require capital cost contributions or O&M cost recovery. In addition, under GoI’s ARWSP, no DRA was required, the use of NGOs and private sector consultants wasn’t promoted, and private connections were not allowed. As a result, the fi rst generation of Bank projects operated in a more diffi cult policy environment than those that came later. From April 2000, drawing upon the success of these projects, GoI launched its own nationwide reform-oriented Sector Reform Project (SRP) covering 26 of India’s 28 states and committing USD 550 million, benefi ting 70 million people in adopting the same reform principles that the fi rst generation of Bank projects had promoted and demonstrated. In December 2002, GoI launched another centrally sponsored program (Swajaldhara) designed to bring nationwide scaling-up of the decentralized delivery of RWSS services.

Second Generation Projects (Kerala 1, Karnataka 2, and Maharashtra 2, approved

during 2000-2003)

Based on a review of the fi rst three projects, the Bank formulated a new RWSS sector assistance strategy in 1999, leading to the preparation of the Generic Project Concept Document, which was endorsed by GoI (Box 2 presents the concept document’s principles). The design of the second generation of RWSS projects was infl uenced both by India’s 73rd constitutional amendment, which transferred RWSS functions to PRIs and by the Bank’s concern about long-term sustainability, in particular the institutional sustainability of user groups and VWSCs to meet O&M management and cost recovery challenges.

Box 2: Reform Approach Principles in Second Generation Bank-supported Projects

Institutional

• Decentralization of service delivery responsibility to PRIs, specifi cally to village-level governments (GPs) and user groups. Transfer of investment funds to GPs/user groups. Shifting the role of state government from direct service delivery to fi nancing and facilitation.

• Adoption of demand-responsive approaches and use of participatory processes. Self-selection of villages, based on demand expressed by GPs/communities, and using transparent eligibility and prioritization criteria.

• Capacity building of government agencies, NGOs and the private sector in more eff ective service delivery.

Financing

• Full operation and maintenance fi nancing by users.

• Partial capital cost fi nancing by users and GPs for water supply. Declining and targeted subsidies to households for sanitation.

Integrated Approach

• Integrated approach to water supply, environmental sanitation and changing hygiene behavior.

Water Resources Management

• Improving water resources management by supporting water conservation and recharge measures, promoting integrated water resources management by communities and GPs, and promoting rainwater harvesting.

Social Linkages

• Integrating relevant social issues into RWSS activities – notably inclusion, equity, gender, indigenous people and poverty targeting.

20


The new strategy aimed to demonstrate the viability of the reforms in improving service delivery and sustainability by developing, testing and implementing the reform approach. Service delivery responsibility was devolved to PRIs, specifi cally to village-level governments (GPs) and user groups, in large-scale pilots in the states of Kerala, Karnataka, and Maharashtra.

The institutional arrangements and the fi nancial fl ows for rural water service delivery that were prevalent in the 2000s are presented in Figure 3. However, since more than 90 percent of funds still came from the GoI, and state programs continued to support the traditional top-down programs, the second generation Bank projects supported the decentralized service delivery agenda under limited funding and hence limited incentives at the state level to adopt wholesale change. Nonetheless, these projects successfully demonstrated implementation of GoI’s reform program at scale. Any further scale–up, however, would largely depend on a change in the national funding pattern to provide the correct incentives for states to take up the necessary reforms.

Figure 3: Typical Institutional and Financial Arrangements under Second Generation World Bank

Projects

The First Kerala RWSS Project (Jalanidhi Project 2000-2008) had many innovative elements, including placing GPs at the center of empowerment, self-selection of villages, GPs contributing to capital costs, transferring ownership and management of existing SVSs from the state PHED to GPs, and models for conversion of unsanitary latrines to sanitary ones. In addition, the project featured the implementation of large water supply schemes by GPs and scheme-level committees, full recurrent O&M fi nancing by users,

GoIMinistry of Rural

Development

State WaterSupply Agency

Board

State Watrer AgencyDivisional Offi ces



District-level institutions

Block Panchayats

Rural DevelopmentDepartment (Policy)

Adopts new, demand-driven, decentralized approach with communiuty participation

Adopts old, supply-driven approach

Accelerated Rural

Water SupplyProgram

Swajaldhara

Minimum Needs Program

Water SupplyDept./SWSM

(Policy)

State Govt.

Water Sanitation

Design, construction

and O&M

21

October 2012

100 percent household private water connections, and a state subsidy level of only 75 percent of the capital investment costs compared to a 100 percent subsidy under the normal state programs. The project also demonstrated a methodology to reach out to the tribal and poorest communities in remote areas of the state. The Jalanidhi project demonstrated how water scheme implementation and subsequent service delivery could be devolved to the sub-GP level (to benefi ciary groups, BGs), an approach that was fully appropriate for the large geographic size of Kerala’s GPs. Project engineers presented and explained scheme plans and designs in simpler terms that made it easier for benefi ciaries to understand them. The project also envisaged that federations of BGs would be created to provide back-up support for the carrying out of O&M as well as for assisting with replacements. However, due to a lack of continuous support from the state government, this approach was not tested. After the project closed, the implementing agency (KRWSA) was dismantled and the Kerala Water Authority (KWA)—the parastatal—became the nodal agency for implementing RWSS schemes under the NRDWP. For one MVS partially funded by the Bank project, KWA and KRWSA collaborated, with the former having the role of bulk-supplier and the latter facilitating benefi ciary-group level mobilization and organizational arrangements related to the distribution network. A key residual challenge is for KWA to adopt the decentralized, community-driven program and policies of Jalanidhi, as well as the modernization of the management of existing large water supply schemes and MVSs.

The Second Karnataka Project (Jal Nirmal 2002-2013) proved to be a milestone as, following India’s 73rd

constitutional amendment, it was integrated into the PRIs by transferring RWSS functions to them. The project was designed on the basis that sustainability is directly proportional to the degree of control that benefi ciaries have in planning and implementation, that PRIs should be well integrated into the project’s institutional design, and that organized links between VWSCs and PRIs are essential for institutional and service delivery sustainability. With the GPs now engaged in oversight of the committees, and able to provide fi nancial support for major repairs and equipment replacement, the institutional legitimacy of this arrangement has been demonstrated. NGOs were contracted by GPs/VWSCs to facilitate project design and implementation, as well as to undertake substantial investments in environmental sanitation, and to implement institutional models for large MVSs. This project was the fi rst to use mass media for hygiene and sanitation promotion and also adopted consistent O&M policy across the state. GPs now have direct control over the implementation of the project interventions in their jurisdiction, and, together with the user groups (the VWSCs), have the capacity to make decisions, procure materials, carry out construction, manage funds, share in the capital costs and manage the system operations with their own resources. In addition, the construction funds have been fully devolved to the GPs.

The Second Karnataka Project demonstrated how the government of Karnataka could successfully decentralize RWSS services by aligning the project’s institutional arrangements with the existing PRI set up, i.e. with the Zilla Panchayats (ZPs) at the district level, the Taluka Panchayats (TPs) at the sub-district or ‘block’ level, and the Gram Panchayats (GPs) at the village level. The Karnataka Rural Water Supply and Sanitation Agency (KRWSSA), initially formed to implement the Bank project, is now a leader for all the RWSS programs in the state. It was transformed into the State Water and Sanitation Mission and became responsible for all the state’s rural water supply and sanitation activities. Challenges remain, however, including: the mobilization of community contribution towards capital costs; the management of large MVSs; building the capacity of the GPs to manage large complex water supply works; and the operationalization of the state O&M policy. Additional challenges include the drying up of water sources during summer months along with the high cost of energy in the state. In many areas of the state, water quality issues have also emerged as a major hurdle to sustainable water supply arrangements.

The Second Maharashtra RWSS Project - Jalswaraja (2003-2009) was noteworthy for its promotion of a fi rst statewide RWSS sector policy, PRI empowerment, water budgeting and aquifer management pilots, social audits at the community level, and for supporting statewide eff orts to achieve a large number of

22


open defecation free communities9. This project also successfully experimented with deepening democratic processes by bringing the Gram Sabhas to the center of decision-making for water supply systems. The project introduced capital-cost sharing for the state and successfully highlighted the need for O&M management and user payments with a good record of collection of O&M charges—with the majority of GPs reportedly fi nancing the O&M expenditures of schemes through tariff collections. The project also demonstrated the benefi ts of integrated delivery of water, environmental sanitation and hygiene.

Jalswarajya emphasized women’s empowerment by encouraging and supporting self-help groups (SHGs), by building skills in women’s groups that were to become an asset to the community, and by giving women a central role in the project. This mobilization and training raised awareness and increased the participation of women in the Gram Sabha and VWSC forums under the project. More than a third of VWSC positions now have women incumbents. Many of these VWSCs later bid for contracts with the GP for tariff collection and O&M management of the water schemes. The Government of Maharashtra has now issued a policy to cede daily operations management to SHGs under a formal contract with the GPs. The project successfully demonstrated the feasibility of groundwater management at the aquifer level—an important institutional approach for achieving source sustainability of drinking water schemes. One noteworthy success of the project was its ability to bring benefi ts to tribals, who constituted one-sixth of the 6.7 million benefi ciaries.

The main achievements of the second generation projects included the promotion of decentralization of service delivery responsibility to PRIs, specifi cally to GPs and to user groups, and the transfer of investment funds to GPs/user groups. Other achievements include:

• Increasing access to improved and sustainable rural water supply and sanitation services.

• Successfully demonstrating the concept of capital-cost sharing by both users and by local rural governments.

• Continuing to develop successful institutional models for community-driven development (CDD) approaches and later for decentralized service delivery, in partnership with communities, local governments, NGOs and government agencies.

• Successfully demonstrating fi scal and administrative devolution of powers to PRIs. These projects provided PRIs and community organizations with authority and control over decisions and resources, the direct responsibility to manage internal and external resources, and the ability to make allocation decisions. Correspondingly, the role of state government shifted from direct service delivery to facilitation in the project areas.

• Developing model operational manuals/guidelines/documents, and promoting sound and innovative practices. Examples included: procurement through community contracting; tripartite agreements among communities/NGOs/government agencies; designing village water and sanitation committees and their relationship with PRIs; developing processes and criteria for selection of NGOs and self-selection of villages; village-level capacity building programs; fi nancial management and accounting by villagers; environmental management plans and disclosure approaches; tools and methodologies for participatory monitoring and evaluation; and incorporating gender dimensions into RWSS work.

• Initiating the scaling-up reforms in repeater states (e.g. Karnataka 2 and Maharashtra 2 projects).

9 Maharashtra’s homegrown Sant Gadge Baba Swachhata Abhiyan program was a major initiative leading to the achievement of total sanitation by a large number of Gram Panchayats that subsequently attained GoI’s Nirmal Gram Puruskar under the national rural sanitation fl agship program (Total Sanitation Campaign). This approach to total sanitation became a role model for other states.

23

October 2012

Third Generation Projects (Uttarakhand, Punjab and Andra Pradesh, approved during

2006-2009)

The World Bank found that multiple approaches within a state were detrimental for scaling up the reform program and achieving the sustainability of schemes. At the same time, the main challenge for GoI was to expand and disperse more evenly the reform approach at the state level throughout the country. This change was required to meet the Tenth Five-Year Plan objective of accelerating coverage of RWSS and ensuring sustainability, as well as to achieve the Millennium Development Goals (MDGs) of halving the proportion of people without access to safe drinking water and basic sanitation by 2015. The Bank therefore decided to actively support the implementation of sector-wide approaches (SWAps) for reform programs in select states willing to adopt the Swajaldhara principles across the state, irrespective of the sources of fi nancing.

Box 3: Principles for the World Bank Support to Sector-wide Approaches (SWAps)

Institutional

• Decentralized service-delivery approach providing a central institutional role to village-level rural local governments (GPs), in partnership with user groups, in RWSS service provision, including scheme implementation (planning, design, procurement, and construction) and O&M of SVSs. Investment funds are to be provided to and managed by GPs/user groups.

• Transfer of RWSS functions, particularly SVSs, and all sanitation functions, to GPs, with associated support interventions to build capacity of PRIs and user groups.

• Demand-responsive approach adopting self-selection of villages based on demand expressed by GPs/user groups, using transparent eligibility and prioritization criteria, and providing technology choices.

Sanitation and Hygiene Promotion

• Integrated approach to water supply, environmental sanitation works, and changing hygiene behavior, including common support mechanism. There is an emphasis on sanitation promotion and hygiene education.

Financing

• 100 % recurrent O&M costs of RWSS services (to cover all operating costs, preventive maintenance and minor repairs) to be recovered through user charges (except for multi-village schemes and water quality-aff ected habitations, where a partial subsidy may be necessary).

• Capital-cost sharing by users, in proportion to service levels demanded. Partial subsidy for basic water supply service (40 lcpd), and 100% user-fi nancing of incremental service levels over basic service level. Provide fl exibility in capital-cost sharing to socially disadvantaged populations for providing basic service levels. Declining and targeted subsidies to households for sanitation.

Water Source Protection, Development and Management

• Developing and adopting satisfactory water policies (and associated actions) relevant to the sustainability of water sources used for drinking water schemes.

• Improving water resources management by supporting water conservation and recharge measures, promoting integrated water resources management by communities and GPs, promoting rainwater harvesting and providing scientifi c and technical support.

Social Linkages

• Integrating relevant social issues into RWSS activities notably inclusion, equity, gender, indigenous people and poverty targeting.

Reaching initial consensus between the World Bank and the interested states was crucial with respect to the following two principles: (i) decentralization of RWSS service delivery responsibility to PRIs, particularly for SVSs, with associated interventions for capacity building of the PRIs and the user groups; and (ii) all new RWSS investments in the entire state to adopt the reform approach. The fi rst principle required changing the role of the states’ PHEDs (or, in some cases, water boards) for the undertaking of activities related to SVSs, from one of direct service delivery to one of a facilitation function. This facilitation function included policy formulation, sector planning, capacity support to PRIs, information sharing and reform promotion, and monitoring and evaluation. The Bank provided technical assistance support to the states to proceed with a holistic restructuring of the PHEDs/water boards. The key principles involved in the Bank’s support to this third generation of state projects are outlined in Box 3. Building on the foundation of these principles, the World Bank is currently providing support to three states. The fi rst two, Uttarakhand and Punjab, have adopted a sector-wide approach and support uniform policies and institutional arrangements across the state and

24


sector. The third is the Andhra Pradesh RWSS project, through which the Bank is supporting uniform policies and institutions across six districts, as part of the Bank’s fi rst engagement with AP in the RWSS sector. Another Bank project has just been approved (Kerala 2) and a further one is under preparation (Maharashtra 3) – both of which also build on the aforementioned principles.

The Uttarakhand10 RWSS Sector Project (2006-2014) is the fi rst attempt in India to deploy a sector-wide approach (SWAp) in a state for policies and institutions for RWSS service delivery, irrespective of the sources of fi nancing. The project supports the Government of Uttarakhand’s vision of achieving universal coverage of safe and potable water and environmental sanitation, following a consistent sector-wide policy (see Box 4). As a result, attempted sector reforms are to be scaled-up across the state with consistent policies, approaches and operational rules for capital-cost sharing, scheme cycle, procurement, contracting and implementation, O&M responsibilities, and cost recovery. Due to the hilly terrain predominant in the state, most of the schemes are gravity based piped systems.

By April 2012 , water supply schemes had been completed in more than 4,000 habitations—clearly establishing the policies and institutional program for decentralizing service delivery responsibilities across all of the state’s 13 districts. The project has already benefi tted half a million rural residents against a target of 1.2 million. The GPs, through their VWSCs (known as User Water Supply and Sanitation Committees), are fully responsible for the design, implementation and maintenance of the SVSs and of the village sanitation programs. The project has established 4,362 VWSCs, consisting of representatives from the community. The state’s sector institutions (Uttarakhand Jal Nigam and Uttarakhand Jal Sansthan—UJN and UJS) are responsible for inter-village bulk water supply and the maintenance of MVSs. Roles and responsibilities have been clarifi ed across the PRIs and the sector institutions, with the State Water and Sanitation Mission (SWSM) responsible for oversight and monitoring of the entire sector program.

The initial delays encountered in Uttarakhand in capacity building and in changing the mindsets of the sector institutions, have provided multiple lessons for other states wishing to adopt a SWAp, as well as for the GoI reform program.

Box 4: The Uttarakhand RWSS Sector-wide Approach (SWAp)

The success of the Swajal project convinced the government of Uttarakhand to commit to the transformation of sector policies and institutions for decentralizing service delivery responsibilities. The State Water and Sanitation Mission (SWSM) and the District Water and Sanitation Missions (DWSMs) now facilitate the state and district programs. The three sector agencies – UJN, UJS and the Swajal Project Management Unit (the Swajal PMU) –support the implementation of the program.

Achievements

• Decentralized Institutional Arrangements: The SWAp program has successfully demonstrated policies, processes, and procedures for decentralized service delivery arrangements across all 13 districts in the state.

• Integrated Approach for Water Supply, Catchment Area Management, and Sanitation: The SWAp program has demonstrated an integrated and cost-eff ective water and sanitation program for maximum benefi ts to the villagers.

• Governance and Accountability Measures: In addition to the grievance redressal measures, a number of innovative independent reviews, including third-party quality checks, social audits, benefi ciary assessments, and the Sustainability Evaluation Exercise are an integral part of the SWAp program. GoI’s Right to Information Award was received by the Swajal PMU for transparency and good governance practices.

• Monitoring and Evaluation (M&E) Systems: An online Sector Information System has been established to monitor the progress of the SWAp throughout the state.

Challenges

• The major challenges encountered are those of capacity building and of changing the mindsets of the state’s sector institutions. The SWAp gained momentum only two years after the start of the program – and this was mainly due to the high level of enthusiasm from the PRIs despite the initial resistance from the state stakeholder institutions.

10 Uttarakhand was formerly known as Uttaranchal.

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October 2012

The Punjab RWSS Project (2007-2013) uses the SWAp guiding principles and promotes decentralized service delivery, through PRIs, across the state. The project promotes the enhanced provision of water supply services through house connections to each household in the target villages. In each district this has resulted in coverage of a high percentage of households. Another feature of the Punjab RWSS Project is the piloting of24/7 metered water supply operation in several villages. Multi-village schemes with 24/7 metered supply are operated and managed by scheme level committees. In addition, the project has introduced on a pilot basis a private operator O&M service contract for a large MVS, and the use of a sms/phone call based grievance redressal system with a toll free number across the state. The main challenge encountered under the Punjab project is the weakness of the PRIs in the state, which delays the implementation of the project’s decentralized operations.

The Andhra Pradesh RWSS Project (2009-2014) adopts a district-wide SWAp, for six districts in the state. Given the challenges of the earlier SWAp projects, and given that this is the fi rst engagement of the Bank with the state in the RWSS sector, the Bank decided to adopt the SWAp in stages, starting with district-wide programs, to be followed with a scale-up of the demonstrated principles and policies across the state. It is still too early to gauge the eff ectiveness of this approach.

The main achievements of the third generation projects include the following:

• Demonstrating models for state and sector-wide approaches. The Uttarakhand and Punjab RWSS projects have supported the design and implementation of SWAp models, with uniform policies and principles across the sector, irrespective of the sources of fi nancing.

• Establishing decentralized institutional arrangements for the entire sector. Clear roles and responsibilities, along with statewide processes and procedures, have been established in Uttarakhand and Punjab.

• Integration of water supply and environmental sanitation (i.e. household and village level sanitation) programs to help achieve maximum benefi ts for the rural communities.

• Integration of water and environmental sanitation programs with source sustainability, to help ensure drinking water security.

• Continuous capacity building eff orts, and information, education and communication (IEC) programs. The success of the SWAps is closely linked to such programs, which take into consideration the requirements of the stakeholders at the state, district, and village levels.

• Integration of governance and accountability measures into RWSS statewide programs. The Uttarakhand project has twice received the annual Right to Information Award based on its use of independent reviews, third party quality checks, benefi ciary assessments, grievance redressal measures, etc. The grievance redressal system under the Punjab project has been established as sector good practice.

• Introduction of sector-wide monitoring and evaluation systems: The Uttarakhand SWAp has developed a Sector Information System to track progress of schemes in all phases of implementation and management.

The implementation of the programmatic approach for supporting state sector programs nevertheless remains challenging. Changing attitudes and providing capacity building are long-term processes. While the Uttarakhand SWAp has been a follow-up to the state’s earlier highly successful Swajal project, the Punjab RWSS project is the Bank’s fi rst engagement in Punjab. Disbursements have been slow under both projects, with the initial year of implementation spent in creating and building consensus and capacity, as well as gaining political acceptance for the sector-wide changes. However, both projects gained momentum within two years of their initiation.

26


Major Analytical Activities (2006-2008)

In addition to its lending operations, the World Bank carried out two major analytical pieces of work to better understand India’s water sector challenges and to inform the Bank’s RWSS engagement in the country.

India Water Supply and Sanitation—Bridging the Gap between Infrastructure and Service (World Bank,

2006) This is a sector review of the status of the urban and rural drinking water sectors in India, identifying their key issues and challenges. It provides broad policy and institutional recommendations to improve the reliability, sustainability and aff ordability of service delivery of water and sanitation services to the citizens of India. The report emphasizes that access to water and sanitation infrastructure is increasing, but access to reliable, sustainable and aff ordable water and sanitation service is lagging behind. The report states that the crucial challenge is not to simply increase infrastructure to the entire population, but to increase access to reliable, sustainable and aff ordable services. The report concludes that India is unlikely to be able to meet this objective unless it adjusts policies, institutional arrangements and fi nancial incentives to help improve service delivery and build capacity.

Review of Eff ectiveness of Rural Water Supply Schemes in India (World Bank, 2008) More than USD one billion is spent by the GoI on rural water supply every year. Based on primary data from more than 700 schemes and 40,000 rural households across ten states, this study provides an empirical analysis of the eff ectiveness of rural drinking water schemes in India, identifying challenges and providing recommendations for improving performance and sustainability of schemes. The main fi ndings of the Review of Eff ectiveness Report are the following:

1. The survey data highlights inadequacies of the water supply schemes. Most households reported shortages in certain months of the year, frequent breakdowns, and inadequate supply. Nearly 50 percent of households depend on supplementary public and private sources, in addition to supply from their main scheme. The actual hours of supply by piped water schemes are less than the design hours. Many households use piped water, particularly multi-village schemes, and have to combine it with other schemes, including public hand pumps.

2. The quantity of water supplied, a key parameter of service, is commonly less than the design amount, especially in the summer months. The design per capita consumption of SVSs funded by GoI and state governments in Karnataka, Punjab, and Uttarakhand is 53, 57, and 48, respectively, while the actual lpcd in summer is 25, 31, and 18, respectively. Some piped water schemes (about 20–30 percent) do not function for several days in a year due to system breakdowns. Approximately 30 percent of households using piped water schemes do not receive a daily supply in summer (some do not get daily supply even in other seasons). Indeed, the water consumption study reveals that most households do not get 40 lpcd from schemes as per the government norm but instead receive about 25 lpcd on average.

3. Supply-driven programs continue to dominate, accounting for about 90 percent of fund fl ows from GoI and state governments. These, however, prove more expensive with institutional overheads adding more than 24 percent to the capital costs, compared to just 11 percent in the demand-driven programs. They are also much more expensive to build, costing two to three times more than the schemes implemented under demand-driven programs. Therefore, a shift towards demand-driven programs will benefi t more people through government funding of the sector. The institutional costs need to be contained to ensure that a greater portion of government expenditure is used for water supply infrastructure and thus benefi ts rural people. This requires a much larger shift to demand-driven programs.

4. To use government funds more eff ectively and to promote system sustainability, it is important that the benefi ciaries bear an increasing portion of the O&M costs, with O&M responsibilities transferred to the PRIs and/or user communities. The process of shifting O&M responsibility for water supply schemes to the

27

October 2012

GPs is being carried out by state governments under various programs. The Swajaldhara program has also helped decentralize water supply in rural areas. However, the adoption of sector-wide reform is important to accelerate the decentralization of services.

5. Rural water schemes are commonly weak in performance and their eff ectiveness is considered low to moderate. Many schemes become defunct before they complete their useful design life—a factor that increases the overall cost of service provision. According to the results of the Habitation Survey, undertaken by the Rajiv Gandhi National Drinking Water Mission in 2003, about 28 percent of point sources in Kerala were defunct. In Maharashtra and Karnataka, this proportion was 14 percent, while in Uttarakhand it was 10 percent. Information from other sources indicated that in Karnataka, 19 percent of the hand pumps, 8 percent of the mini-water11 schemes, and 7 percent of the piped water schemes were defunct.

6. O&M cost recovery for piped water supply schemes averages at about 46 percent. The recovery of O&M cost is relatively higher in community-managed schemes at an average of 71 percent, and signifi cantly lower in government/public utility-managed schemes, at about 21 percent. Cost recovery is most eff ective in Punjab, followed by Maharashtra and Kerala. A comparison across types of schemes reveals that the level of O&M cost recovery is higher in mini-water schemes (58 percent) and lower in multi-village and regional schemes (35 percent). Inadequate recovery of O&M costs is a key factor in the early failure of schemes noted above.

7. Compared to the willingness-to-pay for water services by rural households, the level of revenue collection is low, leading to low levels of cost recovery. If households were charged according to their willingness–to-pay, the O&M cost recovery for piped water schemes would increase to about 90 percent. This would also apply to hand pump schemes, for which the cost recovery at the time of the Review of Eff ectiveness Study was virtually nil.

8. The relatively low cost and higher cost recovery of community-managed schemes illustrate the need for a major shift towards demand-driven approaches. To ensure that least-cost options are implemented, demand for bottom-up schemes will have to be reconciled with top-down planning. Such planning could occur at the district level. The plans should take into account the demand for schemes arising from the bottom (i.e. user communities) and the advantages of having larger schemes, especially in areas marked by groundwater over-exploitation and water quality problems.

9. In Karnataka and Kerala, the government has shifted the O&M responsibility of water supply schemes to the GPs. This has helped reduce state government expenses and has successfully mobilized more resources for water supply infrastructure. However, attention needs to be drawn to the potential for GP funding problems and the subsequent eff ect on the maintenance of schemes that this could have.

The main policy recommendations of the Review of Eff ectiveness Study are the following:

Unbundle and clarify responsibilities to enhance accountability: The adoption of the decentralization agenda alone cannot improve the functionality and sustainability of schemes. Instead, there is need to develop mechanisms to enhance accountability in service delivery. The roles and responsibilities of institutions at the state, district, and GP level need to be better defi ned with regard to: (i) policy formulation; (ii) fi nancing; (iii) regulation; (iv) ownership and development of assets; and (v) management and O&M of services.

Adopt fl exible norms for service delivery: The fully covered, partially covered and not covered classifi cations tend to encourage inadequate O&M as “slippages” from fully to partially covered status often lead to the provision of funds for the construction of new systems to replace the poorly maintained existing systems.

11 Typically comprising small overhead tank feeding standposts and taps

28


Reconcile bottom-up demand with top-down district level planning: It is important to reconcile the demand for schemes (originating from the bottom-up) with top-down planning to improve the sustainability of water sources and to ensure that least-cost options are implemented.

Clarify cost-sharing principles: O&M costs need to be properly assessed and fully recovered through user charges, with the possible exception of high-cost schemes. Transparent criteria should be developed to determine aff ordable contributions, including criteria for socially disadvantaged groups. Uniform statewide cost-sharing principles need to be established, irrespective of the types of program or the sources of fi nancing.

Establish contractual relationships with performance improvement targets to improve service

performance: The PRIs and user committees could contract the planning, designing, construction, and maintenance functions to agencies of their choice under performance-based contracts.

Implement groundwater management activities: Groundwater recharge initiatives may not be suffi cient to increase the supply of drinking water. Groundwater management activities, including groundwater assessments for improved agricultural and other uses, need to be encouraged by local governments, especially in the case of overexploited aquifers.

Provide special incentives for scaling-up reforms and improving performance of schemes: Incentives can be provided through GoI central funds, by linking these with matching or increasing state funds that are utilized for implementing a Swajaldhara-type reform program. Special incentives could be provided to states that commit upfront to adopting sector-wide reforms.

29

October 2012

T he World Bank’s partnership with GoI has evolved over the last 20 years through a series of investment and technical assistance projects and complementary sector studies. Three generations of projects have been

identifi ed, each building on the lessons learnt of the previous generation of projects, and each continuing to advance the paradigm of sector thinking and practice at that time. This section of the review report considers the Bank’s main contributions to the sector during this period and groups the corresponding wide array of activities into a number of key RWSS sectoral themes. This approach is complemented by a summary of key project contributions in Box 5 at the end of the section.

Implementing new institutional models at scale: The World Bank-assisted RWSS projects have demonstrated a number of models, starting with community-driven development (CDD) approaches in the early 1990s (Karnataka 1 and UP/Uttarakhand), progressing to PRI-centric projects in the early 2000s (Karnataka 2, Maharashtra 2 and Kerala 1) and fi nally to sector-wide approaches (SWAps) in Uttarakhand and Punjab, and the district-wide SWAps in Andhra Pradesh in 2007-2009. These were large-scale pilot/demonstration projects that typically served about one million people across one thousand communities. These models, particularly in the second and third generation projects, introduced important linkages between the VWSC, a specially constituted committee under the GP, and the local government for the long-term technical, fi nancial and political support to the sustainable O&M of schemes.

The introduction of these new institutional models required Bank projects to improve the clarity of the roles and responsibilities at the state, district and village levels. This included establishing and/or strengthening the State Water and Sanitation Mission (SWSM), the District Water and Sanitation Mission (DWSM), and the GP, along with support units at the state and district levels. The SWSM became more clearly responsible for state programs and policies, the DWSM for district programs (including, for example, identifi cation of cost eff ective multi-village schemes for villages where no local safe source is available), and the GP for village level programs. The GP VWSCs were made responsible for the design, implementation and maintenance of schemes, which could be outsourced if desired. Local communities participated in the projects through Gram Sabha meetings and the VWSC meetings. Under these models, while the GPs are fully responsible for the village-level schemes, the district PRI—the Zilla Panchayat—is responsible for the design and implementation of the multi-village schemes. Most projects, especially the SWAps, demonstrate how the state departments are gradually taking on a facilitating role to promote the adoption of reforms, building capacity and providing technical guidance, while service delivery responsibilities are being decentralized to the district and village levels.

Demonstrating inclusive community-based, participatory, demand-responsive approaches: The World Bank’s partnership with GoI and state governments has facilitated the development and implementation of decentralized service delivery responsibilities to the PRIs. At the scheme level, these have included community mobilization and awareness generation, women’s empowerment, hygiene and sanitation promotion, community-based planning, construction, oversight and operation, water resources management, and monitoring and evaluation. The projects have designed special programs targeting tribal areas and Scheduled Caste and Scheduled Tribes populations. A number of manuals, including technical, operations, fi nancial management, procurement, along with simplifi ed guidelines in local languages, have been prepared to guide the associated processes and activities. The projects have shown that the decentralized approach (PRI and/or community management) to RWSS delivery and O&M management has led to improved service delivery and sustainability of the schemes, in accordance with the expectations of GoI.

III. The World Bank’s Main Contributions to the RWSS Sector in India

30


Building capacity of state departments, sector institutions, local governments and communities: An important part of the design of each World Bank-assisted project includes specially identifi ed capacity building and IEC activities targeting stakeholders at all levels. The projects have identifi ed local institutions for developing training modules for planning, designing and implementing RWSS schemes, including the technical, management, procurement and fi nancial management aspects of the schemes. Similarly, a range of IEC activities has raised awareness and participation of the local communities in project activities.

Integrating governance and accountability aspects into project designs: Governance and accountability measures have been introduced in the planning, implementation and O&M phases of Bank-assisted projects for the carrying out of independent monitoring, and of technical, fi nancial and social audits. Specially designed grievance redressal measures have been included in some of the projects to address any complaints by the villagers. In addition, comprehensive monitoring and evaluation programs have captured inputs, processes, outputs and outcomes under the projects.

Improving sustainability: Communities are involved in water supply scheme design right from the planning stage to ensure that schemes are designed and implemented as per the community needs and aff ordability. The modest community contributions towards capital costs (in cash and/or in kind) promote ownership of the design of scheme, and strongly encourage agreement for aff ordable O&M costs, which are later fully recovered through user charges (with high-cost schemes, however, explicit and continuous subsidies may be needed in some cases). Such subsidies should be transparent, targeted and predictable if they are to succeed over the long term. The Bank-supported projects focus on integrating approaches for scheme and source sustainability, water supply and environmental sanitation, along with developing detailed processes and procedures for maximizing sustainable water supply services with health and hygiene benefi ts to the benefi ciary communities. Support organizations, such as NGOs, along with technical experts, are involved in mobilizing communities and understanding local demands for preparation of scheme-level feasibility reports. If technical experts work closely with the communities in designing schemes that the communities desire and are willing to maintain, then the likelihood of the provision of safe and sustainable services is maximized. Source sustainability issues are further addressed through specially identifi ed catchment area and source recharge programs, duly integrated within the design of the schemes.

Designing and implementing sector-wide approaches (SWAps) to scale up reforms: One of the most challenging issues in the sector is how to scale-up reforms demonstrated under earlier projects, and to replace the multiplicity of parallel programs with single programs at the state level that pools all sources of funds and applies them following the same approach. The latest World Bank-assisted RWSS projects support state and district RWSS SWAps, and other forms of harmonizing approaches at the state level, moving away from a project-driven mode to a more programmatic approach for implementing uniform policies and institutions across a state’s RWSS sector. The Uttarakhand and Punjab RWSS projects support uniform policies and institutional arrangements across the state and sector, while the AP RWSS project supports uniform policies and institutions across six districts.

Enabling achievement of ‘open defecation free’ clean villages through eff ective sanitation programs:

Environmental sanitation programs, following Community-led Total Sanitation (CLTS) principles, are similarly integrated in order to improve household and village sanitation. Detailed guidelines are prepared for the planning, implementation, and operations and maintenance phases. Specially designed IEC and capacity building programs have been implemented to raise health and hygiene awareness at the household and village levels. Safe sanitation technologies are promoted through sector institutions and support organizations.

31

October 2012

Box 5: Summary of Strategy and Contributions of Bank RWSS Projects

Maharashtra 1 (1991-1998): 1.7 million people in 1,060 villages (US$ 105 million)

• Integration of WS, ES and HSP

• Groundwater recharge measures included in system design.

• VWSCs formed and made responsible for maintaining their hand pumps (HPs).

• State agencies designed and constructed hand pumps and piped systems, and ZPs maintained piped systems.

• NGOs facilitated VWSC formation, HSP, and ES planning.

• ES facilities included household latrines, sullage drains, and solid waste bins.

Karnataka 1 (1993-2000): 4.5 million people in 1,200 villages (US$118 million)

• GPs/VWSCs involved in planning and responsible for O&M of both HPs and piped systems.

• PMUs coordinated implementation within each district.

• NGOs facilitated VWSC formation, WS/ES planning, HSP, plus O&M training.

Uttar Pradesh (Swajal, 1996-2002): 1.2 million people in 1,000 villages (US$70.5 million)

• Introduced a participatory, demand-responsive approach to RWS in small villages, based on community cash contributions to capital costs and 100% recovery of O&M costs.

• Special attention paid to women’s development and participation in WS/ES management and HSP.

• Contracts for the planning and implementation were signed by PMU, VWSCs and Support Organizations (SOs).

Kerala 1 (2000-2008): 1.1 million people in 3,700 villages (US$90 million)

• First time benefi ciary groups, with GP and NGO support, planned and implemented their own WS and ES projects. Models for conversion of unsanitary to sanitary latrines, large WSS implementation by GPs/scheme level committees, 100% recurrent O&M fi nancing by users, 100% HH taking household water connections.

Karnataka 2 (2002-2013): 5 million people in 2100 villages (US$193 million)

• First time a project was integrated into the PRI structure.

• First use of mass media for HSP.

• SOs contracted by GP/VWSC to facilitate implementation, including the design and construction of WS and ES facilities.

• 47% of households opting for private water supply connections

• Proportion of total project cost allocated to ES facilities increased to 40%

Maharashtra 2 (2003-2009) 6.7 million people in 2300 villages (US$287 million)

• Implemented a statewide policy on Mahila Grama Sabha (women voters meeting), followed by Gram Sabha (all voters) fora for discussing local issues including RWSS.

• Empowered women in water supply management and women’s groups in O&M.

• Water budgeting at the community level was linked to aquifer management to secure sustainable water supplies.

• Social audit committees were formed by GPs to monitor VWSCs.

• Supported GoI shift to open defecation free village strategy

Uttarakhand (2006-2014): 1.2 million people in 3,750 villages (US$120 million)

• First state to implement a consistent decentralized statewide RWSS program for all investments.

• Innovative GP auditing system introduced. PMU awarded Right to Information Award for good governance and transparency practices.

• State agencies design, construct, and operate bulk water supply facilities for MVSs while GPs through VWSCs are fully responsible for design, construction, and operation of SVSs and intra-village distribution of MVSs.

• Integration of catchment protection, household/village sanitation and environmental sanitation programs, solid waste management, and health and hygiene awareness promotion.

Punjab (2007-2013): 1.5 million people in 1,200 villages (US$154 million)

• SWAp for decentralized service delivery across the state. Promotes enhanced achievement of sustainable operation through the provision of service connections to each household in villages. WSCs participate in planning and oversee service contracts for the O&M of MVSs.

Andhra Pradesh (2009-2014): 1.2 million people in 1,000 villages (US$150 million)

• SWAps in six districts for decentralized RWSS responsibilities. Village action plans set out the communities’ responsibilities in planning and implementation. VWSCs participate in planning and are responsible for O&M of SVSs and intra-village MVSs including tariff setting, revenue collection and HSP.

32


D espite the lengthy engagement of the World Bank with GoI and the successful implementation of nine projects, there had not previously been any outside assessment of the long-term performance of the

Bank-supported water supply schemes implemented over the two decades under these projects. A fi eld survey, the Scheme Sustainability Survey, was therefore carried out by the Water and Sanitation Program to provide a brief assessment of the sustainability of piped water schemes under World Bank-assisted projects. The results are based on a limited sample of 75 water supply schemes from four projects: Kerala Jalanidhi, Maharashtra Jalswarajya, and Karnataka Jal Nirmal, as well as a small set of schemes implemented as a part of the Karnataka I (1993-2000) project. The survey recognized the design and implementation diff erences across the projects, especially given state and local specifi cities. The results therefore focus on the overall fi ndings from the diff erent projects and not comparisons across them. Despite these aspects of the survey design, its results are signifi cant, as summarized below.

Service Level: The fi eld survey shows that 87 percent of the piped water schemes are still functioning at least three years after commissioning. Among the remaining 13 percent of schemes, the key reasons for not functioning are either sources drying up (30 percent) or non-potable water quality (30 percent). Other reasons causing schemes to become less functional include breakdown of distribution infrastructure, disputes amongst users and unwillingness to invest in repairs owing to fi nancial reasons.

Customer groups in about three-quarters of the schemes12 have a good perception of the water quantity and reliability of the services. A small proportion of schemes have users with a poor perception of their schemes—possibly the result of local distributional inequities and disputes leading to exclusion of a part of the community from the full benefi ts of the scheme.

The majority of the schemes provide adequate amounts of water. Eighty percent of the schemes provide more than 40 lpcd, even in the summer season, and a quarter of the schemes have achieved supply levels above 70 lpcd, representing relatively high service standards compared to the early national norms of 40 lpcd. Approximately 20 percent of the sampled schemes receive less than 40 lpcd, with 5 percent receiving less than 25 lpcd. While the overall performance is good, the results highlight the ongoing water resource challenges faced by many schemes.

Although each of the projects progressively targeted a higher proportion of household connections to deliver increased health benefi ts and to ensure greater fi nancial sustainability, half of the study schemes reported 100 percent household service connections. Another quarter of the schemes have more than 50 percent of households serviced by house connections. This is evidence of a remarkable increase in service levels compared to the 1990s when public sources such as hand pumps and public stand posts were predominant. Communities are often hesitant to add new connections to previously uncommented or to new households in a system, because of the risk of reducing the service levels of the existing connections.

The most common complaint about water supply services is the lack of availability and predictability of the power supply for pumping. Most schemes do not have back-up power systems and were designed with storage capacities of about half of the daily production capacity. As a result, unpredictable power supplies and outages signifi cantly disrupt the distribution of water and inconvenience household routines. Unfortunately, the power supply interruptions often worsen in the summer months, when power supplies are under increased stress, coinciding with reduced availability of the water sources.

12 This data is based on response in meetings and discussions, and as reported by the VWSCs/BGs, GPs and key informants in the village – and not from the household interviews.

IV. Sustainability of World Bank Rural Water Supply Schemes

33

October 2012

Seventy percent of the drinking piped water supply schemes depend on local groundwater sources. About a fi fth of the schemes are fed by local surface water sources, in most cases near the village. Some schemes depend on a mix of sources. A few cases of low scheme performance owing to quality and quantity issues of the water source have emerged in the local groundwater sources.

Management Arrangements: All the project designs had decentralized arrangements at the local level to plan and implement the schemes, with O&M management passed to groups at this level. The exact composition of the groups and their relationships with the elected PRIs were determined according to the respective state context during the planning and construction stages of scheme implementation. In Kerala, given the large size of the GPs, the project devolved the management of schemes to local benefi ciary groups (BGs). In Karnataka, the VWSCs became an integral part of the GPs. In Maharashtra, the VWSCs functioned as an executive arm of the GPs and were accountable to the Gram Sabhas.

In about two-thirds of the schemes surveyed a group was found to be managing the operations, whereas the remaining third were primarily managed by individuals. This arrangement was mostly related to the size and scale of the schemes. The management of the O&M of the schemes typically involved one or two people carrying out the day-to-day tasks of starting the pumps, undertaking the chlorination, looking after distribution, carrying out minor repairs such as plugging leaks, and changing some portions of pipes. Oversight is provided by the VWSC.

In Kerala, most of the schemes are managed by benefi ciary groups as collectives, with only a few schemes managed by individuals. In Karnataka, a tenth of the schemes are managed by VWSCs as groups, about a third of the schemes by GPs, and half of the schemes are managed by individuals without any group oversight by the VWSC or the GP. In Maharashtra, a third of the schemes are managed by VWSCs as groups; a few schemes are managed by GPs directly, and more than half are managed by individuals without group oversight. Mostly the larger schemes are managed by a collective and with group oversight whilst small schemes are managed through an individual operator.

The schemes with group collective management arrangements show slightly better performance in fi nancial management, have better perception of reliability amongst users, and have a higher proportion of adequate sources throughout the seasons. This possibly indicates better management to protect and monitor the sources, something individually managed schemes may not be able to achieve as eff ectively.

Tariff s and O&M: Most of the schemes charge a fi xed tariff per household for the drinking water supply. Ninety percent of schemes charge less than Rs 50 per household per month—usually Rs 30 per household per month (equivalent to Rs 4/m3 or USD 0.10//m3). Tariff s of Rs 30 per month have a special appeal, as this amount equates to one rupee a day. However, in most cases tariff s are based on consensus reached to by users, which may or may not be suffi cient. Power arrears are deducted at source from GP grants in Karnataka. Most of the Maharashtra schemes had cleared their power arrears, while the Kerala Jalanidhi schemes surveyed did not have any arrears and had maintained clean records of regular payments.

The standard components of scheme expenditure comprise salaries for water supply personnel, chlorination material, repairs and maintenance, and energy charges. About a third of the schemes report annual expenses of approximately Rs 50,000 and another quarter of between Rs 50,000 and Rs 100,000. Sixty percent of the study schemes show that they are able to cover their operating expenses through the collection of revenues. Of these, about ten percent have an excellent rating, with moderate bank balances after paying their expenses, including power charges. Thirty percent of the schemes have a low balance after operational expenses, but no power arrears. Twenty percent are classifi ed as satisfactory—these are barely able to cover their expenses, including power charges, but their tariff s need revision and they have negligible cash balances. Forty percent of the study schemes are relatively poorly off with inadequate cash balances and tariff s either not collected

34


or not suffi cient to cover system costs. These schemes have to depend on GP/government transfers to remain solvent (especially in the case of Karnataka schemes). The schemes struggle to cover monthly expenses and sometimes withhold salaries or are unable to pay the power bills of the electricity utilities. The latter situation can be exacerbated by irregular and late billing by the utilities. In some cases, offi ce bearers refuse to pay older bills citing that those were incurred before their term and they were not responsible.

Proper management of revenues and expenditures for O&M management are the key to the fi nancial sustainability of the schemes. Kerala and Maharashtra schemes depend mostly on user charges for running expenses and had ring-fenced accounts for the same. In Karnataka, the GP integrated the scheme expenditure and revenues with its own accounts, including the ability to make available funds received for O&M from the Government of Karnataka and from GoI.

Other Findings: The schemes show high levels of participation by women in the VWSCs/BGs. Women comprised more than half of the total membership of the VWSCs/BGs in more than a third of the schemes surveyed. In another half of the schemes, women comprised 26-50 percent of the total membership.

Some of the participating GPs do not appear to have introduced VWSC management in their other communities, i.e. to other habitations in a GP’s jurisdiction not benefi ting directly from the project. This is also a result of a scheme-focussed approach of the projects, as well as a lack of authority and/or interest of GPs in engaging VWSCs.

Other areas of improvement identifi ed in the survey include the need for constant monitoring and hygiene promotion/education outreach to ensure that daily chlorination takes place (currently this is being carried out in less than a quarter of the schemes surveyed) and the need to encourage maintenance management of wastewater channels and drainage structures, which were included in the majority of the scheme designs.

35

October 2012

T he Bank assisted RWSS projects have adopted an integrated approach to water and sanitation. This has aimed to secure “total sanitation” outcomes by initially focusing on toilet usage (household and

community) and then moving to more challenging issues including promotion of personal and community hygiene, linking with issues of gender and inclusion, environment and improved governance programs. The projects’ sanitation outcomes have also been linked to incentive structures supported by the National and State programs including TSC and NGP (Clean Village Award).

The SWAp model has demonstrated impressive improvements in sanitation coverage, as observed in the case of Uttarakhand, where household and village sanitation programs are launched as a priority along with the launch of the water supply interventions. The Uttarakhand RWSS SWAp model includes household and community sanitation, personal and community hygiene, along with solid and liquid waste management. Starting from a low baseline of 20 percent sanitation coverage in 2007 the project has helped the state achieve coverage of 65 percent by April 2012. Similarly, the Punjab RWSS SWAp aims to scale up next generation sanitation issues by connecting households to sewerage treatment plants, especially designed for the rural areas. Three such sewerage schemes have been completed and 75 have been commissioned, expected to benefi t 1.25 million people. The recently completed Jalswarajaya -1 in Maharashtra provides safe sanitation facilities to about 900,000 project households (approximately 20 percent of which are tribal) with 61percent villages achieving ODF status against the project target of 40 percent. The Karnataka RWSS Project focuses on providing comprehensive sanitation package, including toilets, solid and liquid waste management, smokeless chullas, etc. with household sanitation coverage increasing from a baseline of 19 percent to 61 percent in the project areas. The Kerala RWSS Project (Jalanidhi 1) directly helped about 753,000 rural people access improved sanitation services and contributed towards the achievement of the NGP awards. Jalanidhi 2 is focusing on second generation issues of solid and liquid waste management at the community rather than the individual household level, including the challenges of regionalized septage treatment and solid waste disposal. The Andhra Pradesh RWSS Project has an inclusive approach for scaling up total sanitation coverage, including a focus on tribal and marginalized habitations within the district-wide SWAp model, and is expected to benefi t 1.2 million people.

Some 17 million rural people have benefi tted from the sanitation programs under the Bank fi nanced RWSS Projects. The Bank’s investment lending has supplemented and strengthened the national TSC initiative with specially designed technical, institutional, IEC and capacity building programs for eff ective outreach. The recently released 2011 Census data shows that while the TSC has achieved an increase of 9 percent in household sanitation coverage since 2001, the States where the Bank is supporting RWSS programs have achieved an average increase of some 20 percent during the same period. Also, more than 13,000 (or just under half ) of the total NGP awards have been claimed by Bank-supported States. Maharashtra stands highest being the recipient of 9,523 awards while Kerala is on course to achieve the Nirmal State (clean state) status.

V. The World Bank’s Main Contributions to the Sanitation Agenda

36


T he experience gained from past and on-going World Bank-assisted RWSS projects in India, coupled with the results from the sustainability fi eld survey, highlight the following key lessons from the 20 years of

engagement in the sector.

The principles of decentralized service delivery and community management have been successful: This review emphasizes that community participation in planning and operations underpins sustainability, as evidenced by the results of the fi eld survey where 87 percent of the schemes are still functioning at least three years after commissioning. Decentralized service delivery approaches, whereby communities make informed choices regarding their participation in the project, in the scheme cycle and in the subsequent management of the system, and regarding service levels and service delivery mechanisms, are capable of being implemented. To date, about 15,000 villages and more than 24 million rural residents have successfully implemented decentralized approaches, and benefi ted from the resultant services, through the nine World Bank-assisted RWSS projects.

The projects have demonstrated that Gram Panchayats and communities, including the poorest and the most vulnerable groups, can demand, plan, design, implement and manage water supply and sanitation schemes. In addition, they can contribute to partial capital investment and fully or partially recover operation and maintenance costs. The decentralized service delivery and community management approach succeeds because it places responsibility in the hands of benefi ciaries. This results in the construction of facilities that meet the needs of the users, the users having both the interest and authority to maintain them, and results in users who are trained in O&M procedures and local offi cials who are accountable directly to their neighbors.

Community management alone is not suffi cient—government needs to provide on-going support

to VWSCs: The evolution of World Bank assistance to the India RWSS sector illustrates how community management shifted from simple CDD approaches to the establishment of VWSCs/BGs in order to introduce greater structure and competence at the village level. However, VWSCs/BGs require support from higher levels of government in order to discharge their duties over the long term and/or in order to manage more sophisticated water treatment schemes in the short term.

Gram Panchayat representatives and VWSC committee members who received proper training at the time of scheme implementation need periodic refresher courses. New members who join the committees need similar training. Such training and refresher programs will need to become an integral part of the state and local governments’ role in ensuring the long-term sustainability of the community managed schemes.

GPs and VWSCs need to be able to seek investment support for long-term expansion and upgrading of services in response to increasing consumer demand. The provision of water services over the long term requires continued planning and investment support from diff erent levels of government. While GPs and VWSCs may be able to envision their specifi c needs, these have to be requested, compiled, collated and formalized by the government at a higher level.

Monitoring of performance is required to ensure that service delivery is maintained. Identifi cation of performance deterioration and initiation of action to remedy such situations should come from a higher level of government. This report’s survey work showed that fi nancial sustainability has not been achieved in all schemes, with 40 percent of the schemes collecting insuffi cient revenues from customers to cover normal operating expenses. If the state government were able to identify such defi ciencies before they become chronic, it could provide support to VWSCs and help remedy a situation before it deteriorates. This aspect is particularly important to handle diligently because removing community responsibility for covering on-going O&M costs undermines a core and sustaining feature of the community-managed approach.

VI. Lessons Learned from the World Bank Experience in RWSS

37

October 2012

Integration of RWSS management arrangements within the PRI system is essential for institutional sustainability as it can provide the long-term oversight and support at the district or block level to reinforce the natural links between VWSCs and GPs. This link is not always as strong as it could be, however. This is often due to the high rate of turnover of ZP and GP representatives and VWSC members—partly as a result of the democratic process with elections taking place at the local level every fi ve years. In addition, VWSCs tend to become less functional over time and scheme management can consequently end up being operated by only one or two individuals. This scenario was observed in one-third of the schemes surveyed and it demonstrated lower performance where it occurred when compared to group/collective management. Such situations result in ownership, institutional memory, capacity and accountability being recurrently undermined. Regular follow up training of ZP and GP representatives and staff and VWSC members is therefore vital.

Community management requires professional technical support: Capacity building is an essential component of every project. All personnel involved in scheme implementation and management must be trained and must gain practical experience. This includes state, district and local (ZP/GP/VWSC) institutions, water operators and support organizations (trainers/specialists). Local NGOs, which have credibility with communities, are eff ective in facilitating implementation of rural WSS projects.

As observed in the fi eld survey, however, preventive maintenance is not always carried out, and while operators are able to conduct routine operations and maintenance, they generally do not have the professional support needed to identify and fi x problems or improve operational effi ciency. As systems age these issues become exacerbated, especially if support facilities that were available during the project life have since disappeared. Professional back-up support is consequently needed to help VWSCs resolve a number of technical, fi nancial and management issues. VWSC members and their technical staff need to have unrestricted access to professional support to improve O&M effi ciency, plan the expansion of production and distribution (particularly for larger communities that have a signifi cant number of individual water connections), revise tariff s, assess and improve operator performance, resolve water quality and quantity issues, and/or advise on system break-downs and major repairs. GoI has recently recognized this critical issue and has decided to set up Block Resource Centers (BRCs) to provide the necessary technical and institutional support to rural communities in this regard. Operationalizing these BRCs should be a core component of future Bank-assisted projects.

Maintaining community fi nancing of operations and maintenance activities is critical: Central to the community management approach is the assumption that communities will fi nance system operation and maintenance. The reasoning is simple. If communities are responsible for such costs, they will pay greater attention to proper management of the systems and, most importantly, this source of fi nancing will be far more reliable compared to government fi nancing and therefore system sustainability will be maximized. Inadequate funding inevitably leads to deteriorating service levels and the premature failure of schemes. Therefore, continued attention is needed to better inform communities about: (i) construction, replacement and expansion costs; (ii) the shares that states, GPs and VWSCs should contribute for each; and (iii) performance criteria by which communities can qualify for rolling subsidies.

Unfortunately, the Twelfth (2005-2010) and Thirteenth (2011-2015) Finance Commission awards provide annual transfers to Gram Panchayats to pay for the operation and maintenance of water facilities. These awards limit the incentives for local government leaders to fully recover O&M costs from customers. Communities assume that the GP/government will pay for electricity, repairs and other shortfalls (this was particularly observed for the schemes surveyed in Karnataka). When such funds subsequently fail to materialize the systems start to decline, as they had become dependent on this subsidy, consumers hold back on payments, and a downward spiral ensues of deteriorating service quality and ever decreasing revenue collection.

Water security (both quality and quantity) is an increasing challenge for the sector: Over the last ten years, water quality and water scarcity have emerged as the biggest challenges for the rural water supply sector in India. Based on random sample studies carried out by UNICEF with governments in 15 states across the

38


country, 50 percent of rural water supplies are at risk from bacteriological contamination. According to DDWS/MDWS, 11 percent of habitations in rural India take water from sources which are chemically contaminated, including with arsenic, fl uoride, nitrate, salinity and iron contamination. During the last ten years, the number of water-quality aff ected communities has increased in the country and these problems are proving more and more diffi cult to resolve.

World Bank-assisted projects have not been immune from this trend. The fi eld survey showed water source challenges in about 20 percent of schemes (which could provide only 40 lpcd or less), particularly during the summer season. In addition, complete source failure and water quality issues were responsible for two thirds of the non-functional schemes in the survey (non-functional schemes comprised 13 percent of the total).

Groundwater recharge activities were part of the fi rst World Bank-fi nanced RWSS project in Maharashtra, and every one thereafter, with an increasing focus on water resource management to ensure source security. The Aquifer Pilot Program implemented through the Bank-assisted projects in Maharashtra illustrates a way to integrate holistic and sustainable management of water resources into rural water supply projects. The pilot included supply-side interventions for aquifer recharge and demand management options. Communities were trained to monitor rainfall with rain gauges installed in all the GPs and prepare pre- and post-monsoon water budgeting. The pilot has emerged as a rational tool in ensuring the sustainability of groundwater to meet various needs such as drinking, domestic use, and agricultural requirements.

It is clear, however, that increasing numbers of communities face signifi cant water quality and/or quantity constraints as their population and per capita demand increase. As water scarcity increases, communities will be required to share water sources and join larger multi-village/town systems. At the same time, alternative water production sources that are capable of combining surface water, ground water, and recharge activities will need to be identifi ed and developed. Source sustainability can also become a major constraint with the shift to house connections which supply more than 40 lpcd. Increased demand and competition for water, coupled with rapidly deteriorating water quality and quantity, mean that water resource management, including aquifer management and water quality monitoring, will have to be fully integrated into scheme designs in order to safeguard water resource for sustainable drinking water services. Preparation and implementation of water security plans are required to address the source sustainability issues.

Rural water supplies are not isolated from other water users: Rural drinking water supplies are adversely impacted by the actions of other water users, as well as changing water resource conditions due to climate change. It is critical that diff erent users cooperate to manage the water cycle as a whole. Water supply can no longer be addressed in isolation of uses for agriculture in rural India. Water has to be conserved. Water demand for domestic purposes will have to be managed better through metering, pricing and awareness and communication campaigns. Equally important, management of water demand for agriculture will have to be improved through self-regulation by farmers. This may include changing cropping patterns, use of more effi cient irrigation techniques and controlling and monitoring ground water withdrawals. This comprehensive view of water resource management represents a paradigm shift in the approach to rural water service provision and, although increasingly necessary, these changes will not make rural water service delivery an easier task.

Asset ownership and service provision functions need further clarifi cation: The Bank-assisted projects have helped defi ne the relationship between the GPs, VWSCs/ BGs and the water operators. Some of the third generation projects have established a clear relationship of accountability between the GPs, the VWSCs and the service providers. The need for and importance of these links and responsibilities has been clarifi ed since the earlier generation of Bank–supported projects, although further improvements in this regard are still needed. It is important to maintain distinct roles for the VWSC and the operator in a community. The VWSC is responsible for planning and oversight of the water operator within a community, while the operator is responsible for the day-to-day operations of the water system. One arrangement that has proven eff ective

39

October 2012

is where there is a head operator to whom all operating staff (technical and fi nancial) report; the operator, in turn, reports to the chairperson of the VWSC.

In other cases, accountability between the GP and the service provider is improved through a service agreement. For example, in Maharashtra the government issued an order in 2010 to handover daily operations management to self help groups (SHGs) under a formal contract with the GPs. Some of these SHGs have shown remarkable success in their work.

Large or multi village schemes require a diff erent management model: Considerable experience has been gained in the last 20 years on the institutional arrangements needed to plan, implement, oversee and operate small single-village water supply schemes. Such schemes can thrive with relatively informal management but also can benefi t from the use of paid water operators and personnel to collect water charges and maintain accounts. Conversely, large single- and multi-village water supply systems can be more diffi cult to run as they require the skills of a small utility to operate and maintain and a separate oversight group to supervise the operator and plan future expansion. Designs for such schemes should provide a suffi cient quantity of water throughout the distribution system to meet the increasing demand for household connections, and provide for private metered connections and suffi cient tariff s to cover O&M costs. More attention is required to develop such models.

The demand for higher level of service is rising: Over the last two decades, the demand from communities for higher levels of service has progressively increased and this trend is likely to continue. While rural households in the 1990s were satisfi ed with open wells and hand pump supplies, reducing time and distance for fetching water, the demand in the 2000s has clearly moved towards household piped water connections. Future demands from rural communities will continue this trend of household connections but will probably also involve requests for longer hours of service, including 24/7 supply as well as requests for the provision of more information about the quality of drinking water being provided. It is therefore important for funders, planners, designers, operators and oversight bodies to gain better understandings of the costs, effi cacy and capacity building implications of these higher levels of service.

The World Bank-assisted RWSS projects have been designed to match such increasing demand for higher levels of service. Over the last two decades, the proportion of open wells and hand pumps provided through the projects has constantly decreased and the proportion of piped water systems constructed has increased, to become ultimately the only technology now proposed under the projects. Similarly, piped water service delivery has moved progressively from that provided by stand posts to more household connections. In Kerala, 100 percent of the benefi ciary households have been provided with a private connection under the World Bank-assisted project.

As a result of these developments, the planning and management of schemes must simultaneously evolve. This requires attention to the design standards employed, to improved clarity of the costs incurred by the higher service levels, to the possible introduction of metering, and diff erential tariff s to refl ect higher levels of service. More fl exible norms will have to be adopted, including a clear shift to 24/7 supply, as piloted under the Bank-funded Punjab RWSS project. These changes will need to be refl ected in future Bank-assisted projects, including targeting 100% household connections. Improvement extends beyond rising water supply service standards. The Punjab RWSS project includes the use of small-bore sewers to resolve small town sanitation problems for the fi rst time in rural India.

Environmental sanitation is important to maximize health benefi ts from water supply interventions:

Environmental sanitation (excreta disposal, wastewater management, solid waste management and drainage) is an important complement to water supply and water safety, as is hygiene and sanitation promotion along with other educational messages regarding good health practices. Planning and implementation of water supply schemes integrated with catchment protection, household/village environmental sanitation programs, and health and hygiene awareness promotion are crucial measures to maximize health benefi ts.

40


Accordingly, environmental sanitation as well as information, education and communication (IEC) have both been an integral part of the World Bank RWSS projects and other decentralized water supply programs. The Bank-assisted projects contributed effi ciently in sensitizing communities on water and health related issues and have achieved some excellent results in supporting thousands of GPs to become ‘open defecation free’ particularly in Maharashtra and Kerala. Future RWSS projects should, however, aim to have 100% of project GPs as open defecation free.

The sector should pilot the use of public-private partnership models for service provision: This report has highlighted the need for more professional management of rural water schemes. Currently, limited attention has been paid to the potential use of the local private sector to provide such needed management expertise. Opportunities exist to pilot public-private partnerships in the sector and assess their potential for more widespread application. Signifi cant international experience can be used as inputs to the design of models appropriate for the Indian context.

Without-scaling up of the decentralizing service delivery and community management approach

the demonstrated benefi ts will not be captured: World Bank-assisted RWSS projects have successfully implemented the decentralized service delivery and community management approach and have clearly contributed to implementing policy and institutional changes within the concerned projects and states. However, GoI and most states have found it diffi cult to scale up the approach. As a result, many of the lessons learnt, which are necessary to deliver long-term sustainability, cannot be implemented more broadly across a state or throughout the country. For example, creating a strong role for higher levels of government can only be successfully implemented if all the RWSS schemes under their jurisdiction follow the same implementation and management model based on the full community management model. If only some schemes follow the community management approach, it will not be possible to consolidate the model and to create the linkages to higher levels of government deemed necessary for long-term scheme sustainability.

Shifting from a top-down infrastructure focus to a decentralized service delivery approach takes time and

requires political will and well-targeted incentives: Although each generation of Bank-assisted projects has successfully demonstrated sustainable approaches to RWSS service delivery new country-wide challenges have inevitably appeared including issues related to source sustainability and demands by consumers for higher levels of service. Sector institutions will need to better position themselves in order to process the backlog in service provision and the growing expectations of rural communities. The demand-responsive approach demonstrated under the Bank-assisted operations provides a solid foundation to accommodate and respond to these emerging challenges.

One of the key challenges identifi ed by this review of the Bank’s twenty years of engagement in the RWSS sector in India is of the need to institutionalize and scale-up the proven policies and strategies that have been demonstrated through the GoI’s Sector Reform Project, the Swajaldhara Program and the Bank-supported projects. It has been diffi cult for state governments to adopt such DRA at scale. Building capacity at the community and local government levels, changing the role of parastatals from implementers to facilitators, and having states adopt a fully demand-driven investment program for RWSS, are not straightforward tasks.

Additional time, along with diff erent incentives structures, is needed to convince stakeholders of the benefi ts of the bottom-up, community-driven and community-managed approach. The experience of the World Bank in supporting state RWSS programs through sector-wide approaches (SWAps), such as those in Uttarakhand and Punjab, as well as the district-wide SWAps in Andhra Pradesh, shows an alternative approach for states to engage with their sector institutions in a statewide fashion. In such cases, traditional sector institutions are expected to transform into multi-skilled facilitating agencies at the state and district levels and to provide technical and capacity support to local governments and community organizations. However, such transformations can only occur if the decentralized service delivery and community-managed approaches are adopted at scale. Benchmarking and monitoring the service delivery parameters in rural water supply and sanitation will help in gaining wider acceptance of the decentralized approaches.

41

October 2012

T his report has provided an opportunity to refl ect on the achievements of the GoI-World Bank partnership in the RWSS sector over the last twenty years in India. The cooperation of GoI and the Bank has pragmatically

advanced sector reforms on a state-by-state basis.

On-going technical and institutional improvements should continue to be incorporated into the next generation of World Bank-supported projects and Water and Sanitation Program knowledge products. Of key importance are issues surrounding appropriate models for multi-village schemes, and how to link GPs/VWSCs into higher levels of government to support system sustainability. Current activities linked to water security planning also feature strongly as part of this technical/institutional improvement program.

However, the single most important challenge for the RWSS Sector in India is institutionalizing and scaling-up proven policies and strategies that have been demonstrated through the various Bank-supported projects. While scaling-up of this approach is essential to the provision of sustainable water supply and sanitation facilities, it has been diffi cult to achieve. Building capacity at the community level and changing the role of parastatals from implementers to facilitators is not simple. Yet, not achieving this scale-up places the sector at risk of continued underperformance, ineffi cient investment, and inadequate and unsustainable service delivery. The critical question facing the sector is how to scale-up the positive experiences promoted by GoI through Swajaldara and the SRP, as demonstrated through the Bank-supported projects.

Such scale-up is principally constrained by a bias in funding – where approximately 90 percent of RWSS sector investment goes towards top-down traditional programs and the provision of O&M subsidies by government. Both of these elements tend to support the ‘business as usual’ model.

If scale-up is to occur in a meaningful way then GoI, with the support of WSP and the World Bank as appropriate, need to identify the underlying causes of the slow pace of the scale-up to date and need to recommend possible solutions. Consideration needs to be given to new approaches which could address the challenges at various levels, including: (i) publicizing the successes of, and creating demand for, introducing decentralized, bottom-up approaches through Panchayat Raj Institutions; (ii) providing fi nancial incentives through GoI and state programs that specifi cally target the scaling-up of successful DRA and decentralized approaches; (iii) opening a special window of GoI assistance to support reform programs to build on these proven successes; (iv) technical assistance to foster sustainability through state/district/GP/village water security planning and to support the scaling-up of decentralized services through cost-eff ective SVS and MVS models; and (v) building capacity of the sector institutions, PRIs and other stakeholders for their new roles and responsibilities, including strengthening and establishing State Technical and Training Institutions. These suggestions need to be actively debated to create buy-in across the main sector stakeholders, and to eventually form the basis from which a new framework for the sector can evolve.

VII. Conclusions and Way Ahead

42


Evolution of GoI Rural Water and Sanitation Sector

Rural Water Supply

The GoI’s intervention in the water sector commenced in 1972 through its Accelerated Rural Water Supply Programme (ARWSP). Rural water was made a major national priority with the introduction of a national Drinking Water Mission in the mid-1980s (later renamed the Rajiv Gandhi National Drinking Water Mission or the RGNDWM). This was followed a decade later in 1999 with the creation of a separate Department of Drinking Water and Sanitation (DDWS), established as part of the GoI Ministry of Rural Development.

A signifi cant related development was India’s adoption of the 73rd Constitutional Amendment Act (73rd CA) in 1993 that made it mandatory for states to ratify their own decentralization laws (Panchayati Raj Acts) and devolve powers and responsibilities (“functions, fi nances and functionaries”) from state departments and agencies to elected local governments at the village, sub-district and district levels. Rural water and sanitation were two of the 29 items devolved to local governments under the 73rd CA, and signaled the need for transformation of the roles conventionally played by Public Health Engineering Departments (PHEDs), making water boards with these entities facilitators to local governments, rather than implementers. Thus, decentralized delivery of water and sanitation services became a central theme in the 1990s.

During a series of fi ve-year plans, achieving coverage was the predominant concern of GoI rural water and sanitation programs. A national survey of rural habitations in 199913 resulted in a Comprehensive Action Plan (CAP 1999) aimed at achieving coverage. This yielded impressive results initially with coverage rising to 95 percent at the time of the Tenth Five-Year Plan in 2002-2007. However, high levels of physical provision came at the cost of inadequate attention to resource sustainability, institutional ownership, fi nancial and O&M management, and water quality issues as well as a lack of responsiveness to local needs and demands of the community groups and institutions.

Overall, achievements did not meet targets, owing in part to investments also being lower than needed. This resulted in habitations not being fully covered (defi ned as more than 40 lpcd) and remaining either not covered (less than 10 lpcd availability) or partially covered (between 10 and 40 lpcd availability). Additional concerns included falling groundwater tables and sources running dry, quality problems and habitations suff ering “slip-backs” (reduced per capita availability due to source-drying up, quality problems or population increases.

The Sector Reform Project was implemented in 67 districts across the country, and later scaled up countrywide as the GoI-supported Swajaldhara programme under the Tenth Five-Year Plan (2002-2007). States were expected to enter into a Memoranda of Understanding with GoI, and propose reforms in their state policies and institutions. However, they cited diffi culties in rapidly scaling up the new reforms especially regarding community contributions and as a result, the Swajaldhara program was included as a component in the existing ARWSP, and the approach to achieve coverage remained the primary focus. The demand-based community-management approach initially formed part of the ARWSP and later NRDWP and receives 20

13 This was updated in the baseline survey undertaken in 2003.

ANNEX I

43

October 2012

percent of national allocations under the component of sustainability14.

Rural Water Supply was one of the six components of Bharat Nirman (2005-2009) rural development program that ended halfway through the Eleventh Five-Year Plan (2007-2012). This doubled the funds available for drinking water supply under the ARWSP. According to this plan, 55,000 not covered, 330,000 “slip-back”, and 215,000 water quality aff ected habitations had been served.

The Eleventh Five-Year Plan (2007-2012) identifi ed the major issues in rural water supply as “slip-backs” occurring due to (i) falling groundwater tables and surface sources going dry, (ii) the quality of sources becoming adversely aff ected, and (iii) systems operating below capacity due to poor O&M. Accordingly, this Plan focuses on sustainability of water quality, water quantity, and system maintenance and recognizes the importance of conjunctive use of surface, ground, and rain water to secure sustainable supplies of quality water. The plan recognizes the important role communities can play in sustainability when they are involved from the planning stage, and advocates a decentralized approach based on the community-managed, demand-driven “Swajaldhara” principles. In particular, the plan notes the potential of women’s self-help groups in contributing to the management and sustainability of RWSS facilities.

By March 2009, the not covered and “slip-back” habitations had been served, but problems in only 37,000 of the quality-aff ected habitations had been resolved—demonstrating the relative diffi culty of implementing solutions when there are water quality constraints.

The new National Rural Drinking Water Program (NRDWP, GoI, 2009) focuses on ensuring drinking water security in rural India with the goal: To provide every rural person with adequate safe water for drinking, cooking and other domestic basic needs on a sustainable basis. This basic requirement should meet minimum water quality standards and be readily and conveniently accessible at all times and in all situations.

There has been gradual improvement over the last two decades in the rural water supply policies including:

• High priority and quantum investments accorded to rural water supply;

• A shift from supply-driven schemes constructed by departments/parastatals to the testing of demand-responsive and community-centered schemes, especially for simple intra/single village schemes requiring limited technical expertise;

• A change in the role of the government from provider to facilitator along with increasing technical and management options for user communities; and

• A shift from local arrangements mainly centered on community groups mobilized for the purpose, to a gradually increasing role of local governments (PRIs) in construction and O&M management.

While achieving coverage has been a continuing national imperative in the rural water sector, a nuanced view of the diff erent dimensions of rural water has emerged. This includes an increasing recognition of water quality, sustainability and O&M management issues. Community participation, demand-responsive approaches, and capacity building have become a priority of policy and programming.

The National Rural Drinking Water Programme (NRDWP) presents a roadmap that places the sector into a new trajectory based on the new organizing principle of universal water security. The implementation framework also makes a signifi cant departure from national water supply norms enabling states and communities

14 The sustainability component includes water source sustainability (through water resource management, protection and augmentation); as well as system sustainability (optimization of water cost, O&M management, capacity building and awareness generation); fi nancial sustainability (O&M cost recovery and energy effi ciency); and social and environmental sustainability (involvement of all stakeholders and proper management of rejects or wastes). The sustainability component is to be implemented using the Swajaldhara principles (NRDWP, 2010).

44


to determine what standards they want to aspire to and develop comprehensive water security plans at village, district and state levels. This aff ords greater fl exibility to states and districts to respond to their local situations—a mark of devolution as well as an opportunity to address rural water provision in a programmatic manner with potential long-term benefi ts in terms of sustainability and eff ectiveness of public investments.

Rural Sanitation

In 1986, the GoI started according national priority to rural sanitation with the launch of the Central Rural Sanitation Program (CRSP). However, this approach, which focused on providing household pour-fl ush latrines backed by subsidies for hardware, failed to motivate usage behavior. Despite investing more than Rs. 6 billion to construct over 9 million latrines, rural sanitation coverage grew by only one percent through the 1990s. In the 2001 census, only 22 percent of rural households were reported to have latrines.

The GoI then restructured the program in 1999 as the Total Sanitation Campaign (TSC), which relied on mobilizing demand using information, education and communication (IEC). The concept is designed to encourage communities to achieve total sanitation (freeing communities of open defecation, improved hygiene behavior, school and institutional sanitation, solid/liquid waste management and environmental sanitation) as well as provide a fl exible menu of technology options, and supply chain development. As a result, coverage of rural households by toilets more than doubled to 61 percent by 2009. This is a major achievement. In 2004, the GoI launched the Nirmal Gram Puraskar to reward communities and local governments that achieve total sanitation.

The TSC, implemented in all 593 rural districts of India, involves the preparation and implementation of district proposals usually between three to fi ve years duration. These proposals are fi nanced by the GoI, states, and benefi ciary households on a 65:25:15 ratio sharing of capital costs. District level Panchayats have sanitation missions and cells that implement the program with Block/Panchayat Samiti and GP-level elected leaders and functionaries.

From 1999 to 2008, the GoI allocated about Rs. 4,400 Crore (USD 1 billion) with current annual investments of approximately Rs. 11-1200 Crore (USD 250-270 million). Under the TSC, the Nirmal Gram Puraskar (NGP or “Sanitized Village Reward”) rewards GPs, development blocks and districts that achieve total sanitation. The fi scal incentive15 and national recognition provided by the NGP has mobilized a large number of GPs to become completely sanitized. 38 GPs and two Block Panchayats from six states received the award in 2005. This has grown to more than 12,277 GPs, 105 Block Panchayats and 8 Zilla (district) Panchayats in 2008.

15 Depending on population size, GPs receive Rs. 50,000 to Rs. 500,000 as prize; Nirmal Blocks receive Rs 1 – 2 million, and totally sanitized districts receive Rs. 3-5 million as reward.

45

October 2012

Box 6: National Rural Drinking Water Programme (NRDWP): Framework for Implementation

• Water as a public good and a basic right equitably available to all households

• Ensuring permanent drinking water security at the household level by conserving the resource and promoting conjunctive use through village, district and state water security plans.

• Shift away from the conventional liters per capita per day (lpcd) norms to ensuring safe quality drinking water security for all, and allowing fl exibility for communities to plan their water supply schemes based on their needs and local requirements.

• Decentralized approach with in-village water supply schemes to be planned, approved, implemented, managed, operated and maintained by the PRIs and local community, while allowing state agencies and utilities to supply bulk water to villages.

• Government to be the facilitator, building the capacity of PRIs and communities to manage the in-village water supply systems and sources with the help of support organizations.

• Allocation of national NRDWP resources to coverage (30%), quality (20%), O&M (10%), sustainability (20%), desert and drought prone areas (10%), natural calamity (5%) and support activities (5%). In addition, the MoDWS has recently introduced a Management Devolution Index (10%) as incentive grant for devolution of schemes to the PRIs. The sustainability and support funds will be provided to states as 100% grants, while other components will be on a cost-sharing basis.

• Water supply in schools and public places.

• Greater role for women in planning, implementation and maintenance management.

• VWSC to be a standing committee of the Gram Panchayat with members elected in Gram Sabha, and able to out-source O&M.

• District PRIs to implement through their own agencies or, if they are not suffi ciently strong, to implement through district missions/committees.

• State-level Water and Sanitation Mission, Scheme Sanctioning Committee, State Technical Agency, and Water and Sanitation Support Organization (WSSO) to support State RWSS Program.

• WSSO to have skilled personnel in social development, communications, information technology, and engineering capacities that are able to manage IEC, MIS, HRD, M&E, and R&D.

• Restructure and strengthen state agencies in their shift from service providers to facilitators.

Source: National Rural Drinking Water Programme – Framework for Implementation, Rajiv Gandhi National Drinking Water Mission, Department of Drinking Water Supply, Govt. of India. 2010.

ANNEX II

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World Bank. 2006. India Water Supply and Sanitation—Bridging the Gap between Infrastructure and Service. Washington, DC: World Bank.

World Bank. 2008. Review of Eff ectiveness of Rural Water Supply Schemes in India. Washington, DC: World Bank.

References

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