Till recently, governance in the infrastructure sector was based on the belief that the Westminster style of accountability of public sector is adequate to ensure efficiency and protect the interests of consumers. No attempt was made for a long time to separate the role of government as a service provider and as a policymaker. Sufficient importance was not given to consideration of efficiency, productivity and consumer interest.
This concept changed in India in 1990s, initially in the electricity and telecom sectors with introduction of independent regulation, followed by in the water sector, first in Maharashtra (2005) and 11 other States thereafter. However, only four States (Maharashtra, Haryana, Punjab, and J&K) have positioned water-regulators, the latest being in Punjab (2022).
In any independent regulation in the infrastructure sector, a regulator should have core, recommendatory and advisory functions. An analysis of the existing water regulatory framework in 12 States shows that there is no uniformity in the framework of regulatory legislation across the States.
There is also no transparent process for selection of members of the Water Regulatory Authority (WRA) across the States, and there is bureaucratic predominance for the chairman’s post in WRA. Minimum attention has been given to ensure transparency of the regulatory process, accountability of the regulator, and facilitating participation of stakeholders in the water sector.
Many core functions for independent regulation in the water sector have also not been adopted by States. These are protection of consumer interest, laying down of safety standards, adjudicating disputes and differences in involving stakeholders, promotion of competition, promoting economy in the supply of water and sewage services, and framing principles relating to terms and conditions of licence. In fact the current water regulatory framework does not ensure a balance between “market based approach” and government’s “social commitments”.
Current approach
The Central Government has now prepared a draft Model State Integrated Water Resource Management (IWRM) 2024 Bill for positioning a State IWRM Authority (hereinafter called Water Regulatory Authority) with the scope to “provide for integrated development and management of water resources in State through participatory governance, and with the objective of achieving equity, efficiency, and sustainability in the use of water resources”.
The Table indicates various provisions of the model IWRM Bill, and the deficiencies in the Bill when compared with the model independent regulatory framework (TERI 2000).
Agenda for action
The scope of the model IWRM Bill does not conform to the general scope of the independent regulation in infrastructure sector which often says “establish a WRA to ensure orderly growth of water sector, promote conservation of water, rationalise tariff for supply of water, develop transparent policies towards subsidies, promote efficient and environmentally benign policies”. There is a need to review the scope of the model Bill in the context of these guidelines.
Second, since water is a State subject, there is a need to enact a Central legislation before adoption of Model Bill by the States by taking recourse to Article 249 or 252 of the Constitution of India for its consideration by Parliament.
Third, the proposed Central legislation should have a provision on constituting a “Forum of State Water Regulators” as is prevalent in the electricity sector, with the objective of harmonisation of regulation in water sector, sharing experience of tariff rules, etc., across WRAs.
Fourth, till the time WRA is constituted in a State, an interim Standing Committee of independent water professionals should be constituted, to review draft decisions/regulations, of the government and give advice in areas where the government is the water regulator. Such advice should also be placed in the public domain.
The writer is a Distinguished Fellow, TERI, New Delhi, and a former Secretary, Ministry of Water Resources
