Creating Enabling Conditions for Sustained Reforms in Urban Water Sector: A Case for Legal Reforms in National Capital Region of Delhi


Radical reform of water sector is necessary for India 's towns and cities to improve the quality of services needed to contribute maximally to the country's economic growth and to improving the well-being of its people. Reform of the urban water supply is particularly urgent because without such reform fiscal resources will continue to be used sub-optimally and urban populations will continue depriving themselves of their full economic and civic potential. Experience over the last decade suggests an emerging global consensus on some key principles of institutional reforms like public private participation (PPP) in the delivery of Water supply services, Decentralization of service responsibility to the lowest appropriate levels, autonomous utilities, a community-driven and demand-responsive approach and restructuring of sector institutions.

India has a federal set up and administration of water supply is in the domain of state governments. Presently there is a multiplicity of overlapping laws, authorities and jurisdictions and gaps in state laws. No state or region has a comprehensive legal framework specifically for the water sector .The 74th Constitutional Amendment, mandating state government state governments to transfer responsibility for water supply and sanitation (WSS) services to urban local bodies (ULBs), provides and opportunity to drive far-reaching reforms. State governments are in a position to articulate public service obligations that will accompany this devolution responsibility, define policies, provide fiscal and financial incentives, and offer technical support for ULBs to meet their service and financial obligation, particularly during the critical transition leading to complete empowerment of the ULB. They are also in a position to define the regulatory framework to ensure accountability and to balance relations between service providers and customers

The legal, legislative and institutional issues related to the water supply becomes much more critical as the water is a state subject and the NCR region covering four states, have different institutional arrangements for water supply and drinking water in particular. It is important to assess the changes required in the legal framework for reforms in water sector and to evolve a regulatory framework for sustainability of water sector reforms at a regional basis.

This paper discusses NCR contemplation in urban water sector reform with particular emphasis on legal framework and structure delineating the overall gaps in the legislative, institutional and policy reforms needed for regional water management. The structure envisaged complements the institutional design being adopted by the water utilities in the region. This is consistent with the policy framework i.e the contract for service provision in a specified geographical area which would define public service obligation for all consumer,.

The aim of the paper is to explore a sequential strategy for institutional reforms in water so as to evolve a policy framework for regulation in urban water delivery systems. The output can help in developing a generic policy strategy for water institutional reforms minimizing the transaction cost but maximizing the performance impact in a political economic constraint. The sequencing of these options can provide a valuable basis for institutional design and its sequential implementation of alternative policy instruments for legal reforms on a regional basis with possibilities of replication.

Key-words: institutions, water supply , reforms, PPP, legislation.