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Possible solutions: The middle path?

By K J Joy and Suhas Paranjape

The debate about water continues to be polarised between the view that water is a social good that must be dispensed by the state, and the opposing view that water is an economic good that must be treated as a commodity. Is it time to get away from the sterile debate around social good and economic good, big versus small, and adopt the 'integrationist' viewpoint where water is seen as both a social and an economic need?

Water is one of the most important requirements of life, and though terrestrial plants and animals migrated onto the land they still carry around in their bodies the salt broth that envelops all life processes and must be constantly renewed. While food provides the energy and building blocks of life, life cannot proceed without water. In India, the word jeevan, which signifies life, also means water.

In India, water is even more significant because in most parts of the country, especially on the peninsula, we have a short, well-defined monsoon that provides us the water we need throughout the year, especially during the scorching summer months. 

Water therefore is a basic need, and the right to adequate access to water, in quantity as well as in quality, is part of the right to life itself.

However, water is also simultaneously a component of economic activity. Every kind of productive activity requires water -- directly in most cases, and indirectly in all cases. Water is therefore also an essential resource, an essential economic good. And it is increasingly becoming a commodity.

Is water a social good or an economic good? Or both? This question, essentially a political economy question, is a recent entrant in the water sector discourse and is very much connected to the onset of globalisation and privatisation in the ’90s. Today it has become a critical issue in the area of water policy and governance.

Water is a strange business. Unlike many other natural resources, it is mobile. It is, in some sense, a common shared resource, like a road. But when a person uses a road it does not stop someone else from also using it. If one person uses water, another is denied use of that water. Inherent in its use therefore is the issue of competing uses: who gains and who possibly loses. Although not quite a common resource, it is classified as a common pool resource.

Yet, practically, only surface flows are considered a common resource; all groundwater is considered a private resource. Water does not respect the boundaries we use to demarcate property; it follows its own laws. Water that may fall on one private plot turns up in someone else’s private well. And water that falls on someone else’s plot may collect in mine to cause waterlogging. In economic terms, water creates externalities, both positive and negative. It is important to realise that from the point of view of the biophysical regime that governs water, these are not ‘externalities’; it is our property relations that make them externalities.

Water would seem to be a local resource, and the current slogan ‘Gaon ka pani gaon me’ implicitly assumes this. But every unit of water utilised in one place withdraws that unit further downstream. The entire water use pattern within a basin -- and now to some extent even across basins -- is interconnected; it would be wrong to treat water as a wholly local resource. Water therefore is as much a shared resource as it is a local resource. It cannot be managed at one level, it must be approached on different levels -- from micro watersheds to basins and further up to states and countries. Moreover, there are asymmetries (1) involved. The most important is the one that operates on the basis of gravity; upstream areas affect water availability downstream, but not vice versa. Similarly, once water flows downstream it can only be available upstream by spending money, effort and energy.

Lastly, water needs to be seen as an ecosystem resource, as part of an ecosystem. Nowhere is this more apparent than with issues related to water quality. Every water user not only uses water but also returns water. How much water is returned and in what condition is crucial to the health of the ecosystem. This unfortunately is the aspect of water that receives the least attention. While the clamour over who should receive how much water is loud and clear, not much attention is paid to who is returning how much of that water to the ecosystem, and in what condition. As a consequence, our springs of life are being polluted and water quality is deteriorating at an alarming rate.

Water, thus, is a strange and complex entity and the dualities it incorporates often result in polarised positions. Some of this complexity it shares with other resources and some it does not; some of it is ingrained in the context in which we live today and some in its intrinsic nature. Whatever it may be, a serious attempt to deal with it in its full complexity is a humbling experience and what we discuss below is more in the nature of a framework than any kind of blueprint.

Big versus small

Take the debate around big versus small. Big and small are posed as alternatives. But there is no intrinsic advantage that small systems have over big; there are numerous examples of small systems that have been inequitable, unsustainable and harmful to the environment. If the performance of large systems has been poor, small systems have not been much better off except where NGOs or farmers’ organisations/movements have been able to bring about a change in perspective and functioning. For example, some years ago, the people of Chinchani (Sangli district, Maharashtra) had to resort to various forms of agitation, including a year-long sara-bandi agitation (not paying revenue to the government), to get their share of water released from the Pare minor irrigation tank, and that too under police protection. Struggles to restructure smaller systems are as necessary as struggles against the destructive content of big dams. Unlike in the case of large dams, in the case of small systems the fight is against the powerful within the village itself -- the tragedy is that very often environmentalists and advocates of small systems do not realise the significance of such struggles and do not want to go beyond the big versus small controversy. In fact, the problem is not really one of big versus small sources but of how the big and the small relate to each other and how they both relate to people and the environment. It is our belief that planned and used properly, large sources can support smaller, local systems and are important in increasing their reliability as well as sustainability.

For this, however, one has to first believe that big sources can benefit small and local systems when they are brought into a synergistic relationship with each other. Large sources offer two major benefits. First, for a given volume of water and a well-chosen site, large sources have lower evaporation losses, lower construction costs and smaller areas of submergence (as we shall see later, it is not the amount but the nature of submergence that is the problem with large dams). Second, large sources have a greater degree of dependability -- this is somewhat like pooling risks, which decreases aggregate risk and increases aggregate dependability. The problem with big dams is the way they are planned today, which makes them instruments of centralisation and concentration of wealth and benefit, of dependence and of ignoring, bypassing and ultimately destroying local systems, including people and their livelihoods. To borrow a phrase from one of our senior colleagues, big dams are not important for what they have done, but what they could have done and have not.

Conceptually, how big sources can be utilised in this manner is simple, but it requires a change in approach and attitude in all aspects of our thinking about water sources. We describe some of this in what follows; a practical outline applied to the specific case of the Sardar Sarovar Project (SSP) on the Narmada can be found in our book (2).

The first, and most important change is modelled on the system tanks of Tamil Nadu. System tanks in Tamil Nadu are tanks that not only use the water they harvest locally but are also supplemented and refilled from major sources and large dams. An important consequence of this is the dispersal of water storage from the large source. The big dam serves less as storage and more as a means of diversion of large quantities of water, so that it may be stored in dispersed storage facilities in small and local systems.

In one stroke, this change in approach achieves a number of things. First, it reduces the need to store water behind the dam even as it allows large quantities of water to be used. Also since it requires small and local water harvesting systems to be in place, it no longer bypasses, undermines and destroys them but instead depends on them and supplements them. In such an approach, small systems have a dual role -- as a means to harness local water resources and disperse buffer storage elements for water from the large source. Local storage facilities are today limited mainly by expected yield rather than actual storage potential. If exogenous water is available, it is possible to build larger storage facilities or increase the capacity of existing storage facilities at little additional cost. Taking into consideration the fact that local systems need to be built in their own right, this synergy is an important cost-saving measure.

There is a similar change in how canals are planned. The canal network is no longer an unwieldy, overcentralised network that links individual fields to a large source; it mainly functions as ‘feeder canals’ planned for speedy conveyance to local storage systems. From there onwards, the local systems take over. The system becomes modular, simplifying and rationalising the system and cutting down on the top-heavy, centralised aspects.

The second important change relates to power from large river sources. Conventional thinking about hydropower plants sees them storing all the water required for power generation behind the dam and operating the plant as a peak load plant. The reduction of storage behind the dam and consequent reduction in the height of the dam would do away with a substantial portion of power benefit. The alternative is to operate the plant as a run-of-the-river (RoR) plant during the monsoon, and as a pumped-hydro plant for peak load during the post-monsoon season. In fact, this thinking can be extended to all systems, small and local, as well as large streams. It would lead to a truly large, dispersed generation and peak load capacity for the power sector.

There is another important benefit of this approach. An important adverse effect of present planning is the post-monsoon drying up of riverbeds downstream of big dams. Since most of the diversion of water to local storage facilities can take place during the monsoons, power generation is RoR and post-monsoon operation is pumped hydro, a major portion of post-monsoon flows can be left untouched, making for greater riparian health. In fact, similar changes in approach would also demand retaining minimum monsoon flow as well.

But by far the most important effect of the alternative approach is the reduction in submergence behind the dam; in the case of Sardar Sarovar, the alternative brings it down by almost 70% and makes the problem tractable. It makes it possible to ask for the rehabilitation of oustees in the upstream area itself, in their own socio-cultural milieu and sphere, and providing water from the project for irrigation and livelihood assurance in a contiguous upstream influence zone. We would emphasise here that total submergence, in all probability, would not be reduced. What would be expected to happen is that instead of an immensely large, continuous tract of submergence behind the dam, submergence would be dispersed. For example, in the Sardar Sarovar alternative, the total submergence remains the same; what happens is that we exchange submergence behind the dam with dispersed submergence.

What then has one achieved by exchanging one kind of submergence with another? Here it is necessary to recognise the importance of exchanging centralised, continuous and destructive mega-submergence with dispersed local submergence. In the alternative approach, as illustrated in the context of the SSP, a substantial portion of behind-the-dam submergence is exchanged with an equal area of local submergence in the service area of the project. There is an independent significance of every hectare of behind-the-dam submergence being exchanged for every hectare of local submergence, which goes to the heart of the conflict surrounding most major projects being floated today. With every such exchange, the proportion of people who are uprooted en masse declines drastically. In fact, large, concentrated and contiguous submergence is disruptive not only to people’s lives but also to the area’s ecosystem.

Moreover, in the context of local submergence, the ‘project-affected’ do not remain an abstract, remote entity for the project beneficiaries. Project-affected people share the daily lives of the project beneficiaries; they share the same drinking water sources, the same bazaars, the same festivals; they are the same people joined by kin, sharing the same joys and sorrows. This is an extremely important context for rehabilitation. Though nothing can replace the will and capacity of the project-affected to struggle for their own demands and interests, the degree of social amity with which issues can be resolved does undergo a radical change.

It is exactly the opposite in the case of behind-the-dam submergence of large waterbodies. Not only are the project-affected abstract, remote entities -- outsiders -- for the project beneficiaries, the division almost always coincides with the divisions between advantaged and disadvantaged social groups, and, in a majority of cases, between adivasis and non-adivasis. It becomes a matter of one group bearing losses for the benefit of another. The resistance of the project-affected brings into play all the interests, emotions and prejudices that are dormant and not-so-dormant between them. Slowly, it turns into a dismal war in which everything goes against the predominantly adivasi people in their struggle against a misconceived project that treats their losses as inevitable losses in the interests of the ‘country’ or ‘development’.

It is essential to realise that the issue is not submergence per se; it is our experience that people are much more rational in working out arrangements in a local context in which the project-affected are a part of their daily lives and the gains are palpable. The issue is that of the coincidence of boundaries between the project-affected and the project beneficiaries, and those between socially advantaged and disadvantaged groups, of the disadvantaged having to bear the losses for the benefit of the advantaged, and of that being presented as ‘inevitable’ in the interests of ‘the greater common good’, whatever that may be!

The second aspect of this alternative approach relates to the impact of rehabilitation and the question of where oustees are to be rehabilitated. It is usual for the project-affected, necessarily from upstream areas, to be given land for rehabilitation in downstream command areas. The objective behind this is laudable enough. They have to be given irrigated land from the same project, and it has to be acquired from the beneficiaries. Generally, if the oustees in upstream areas and the beneficiaries in the downstream command are bound by ties of kinship and culture, there is a favourable environment for tackling the issue, though nothing can finally replace the organised struggle and resolve of the oustees. The less they share, the sharper the conflict becomes, and when these boundaries coincide with the boundaries that demarcate the dominant and the dominated, the better-off and the oppressed, the problem becomes intractable. The rehabilitation of oustees in downstream areas then means not only an uprooting but also their further dispersal and their entry into a hostile environment.

Interestingly, in south Maharashtra there is a serious effort being made to bring together the two major conflicting social sections, namely the so-called beneficiaries and affected people, under a new demand of restructuring projects on an equitable basis and supporting each others’ demands (3).

None of the above measures would work if the local systems were to be unsustainable and inequitable. There is no escaping the fact that ensuring a central place to small and local systems does not solve the problem; it only creates a context that facilitates its solution. Making small and local systems the basic unit of the composite system creates a basis for self-governance, of people-centred management of the water system. The state must first ensure that there is self-governance within these small systems, and, secondly, it must enable them to move towards equity and environmental sustainability.

Necessary conditions for equity and sustainability

If we have to get away from the sterile debate around big versus small, and operationalise the ‘integrationist’ viewpoint detailed above, then one needs also to build a broader political consensus around certain conditions under which this is possible.

There is a need to insist that, if exogenous water is to become available, both the users and the state must fulfil certain conditions mutually with respect to equity and sustainability. We therefore propose that the provision of exogenous water be conditional on the fulfilment of four conditions:

  1. Exogenous water will be available to local systems in proportion to the local resources they harvest and harness (in the context of the SSP alternative, for most regions we have proposed 1 m3 of Narmada water for every m3 of local resource created). This provision ensures that when exogenous water enters an area, local systems will not simply die, as happens today, but prosper.
  2. Equitable water access, that is, providing minimum water assurance to all families in the service area irrespective of landholding and protecting livelihood needs before further water is provided as extra, economic service.
  3. One-third of the service area to be brought under permanent cover. Unlike ‘compensatory forestry’ this ensures that a minimum basis of environmental upgradation is established in the entire service area.
  4. Self-management of the system by users to ensure equitable and sustainable use. This provision is as important as the others because no top-heavy bureaucracy can be in a position to fulfil these conditions. Only if the people themselves come together and exercise control can they be fulfilled.

The state too has corresponding obligations: a) providing the requisite funds necessary to harvest and harness local resources. In the alternative, minimal watershed treatment of twice the service area is included in the project cost itself. The other provisions of b), c) and d) imply that the state has to enable local communities to ensure that they are sufficiently empowered to satisfy these conditions. This implies enabling legislation, policies and incentives.

Water: A social or economic good?

Is water a social good or is it a commodity and therefore an economic good? As we have asserted above, the right to adequate access to water -- adequate in quantity as well as quality -- is a fundamental right and needs to be treated as part of the right to life. The issue is how this is to be done. Should it be provided as a free good by the state? Should it be rationed? Should it or should it not become a commodity? There are clearly two different polarised positions on this: one, that water should not become and should not be treated as a commodity and should be dispensed by the state, and two, that it should be allowed to become a full commodity and that the restrictions placed on its becoming a commodity are causing all the ills related to water. This is the core of the pro-privatisation school argument.

The problem does not lie in accepting that water is a basic need, the problem is that water is also a means of production -- whether in agriculture or in industry, whether in artisanal production or large-scale production. Moreover, take irrigation. Water for irrigation is important in order to stabilise minimum production on small and medium farmers’ lands, but it is also important to farmers who produce for profit rather than for their subsistence needs. In each sector when water is provided it is provided as a service, and it serves both functions -- as a basic service aimed at basic needs (in the form of minimum livelihood assurance) and also an economic service for gain or conspicuous consumption. And there is always the possibility that the interests of the latter are being served in the name of the former.

Both these functions place contradictory demands on how the service should be provided and at what charge. A basic service aimed at meeting basic needs with a high degree of assurance has to be widely available and available at a price/charge that is affordable to all, including the poorest sections. If need be it has to be subsidised, whether through cross-subsidy within the sector or across sectors. On the contrary, an economic service provided for gain needs to be charged full economic cost, and, in addition, must be charged at premium rates to provide for cross-subsidy for basic needs as well as a deterrent to wasteful and inefficient use. In fact, as we said earlier, providing water to all to meet their livelihoods at an affordable cost is at the core of equitable water distribution.

This can be done through a graded tariff linked to the amount of water delivered; the higher the water consumption the progressively higher the rate it will attract. In fact, the Vaidyanathan Committee appointed by the central government in the early-’90s had recommended a graded tariff system (4). Such a graded tariff will, in the first place, discourage waste, since wasteful use will attract a higher cost. Secondly, it can then be calibrated so that the first slabs provide a minimum water assurance corresponding to minimum water rights at an affordable cost, with the higher slabs charged at higher rates corresponding to full economic cost recovery as well as cross-subsidy and deterrence.

The debate about whether water is a social good or an economic good (or commodity) is closely linked to (or has arisen because of) the issue of water privatisation. ‘Commodification’ is the process of converting a good or service formerly subject to many non-market social rules into one that is primarily subject to market rules. Water privatisation means many things to many people, as it has a range of meanings. Privatisation involves transferring some or all of the assets or operations of public water systems into private hands.

There are numerous ways to privatise water, such as the transfer of responsibility to operate a water delivery or treatment system, a more complete transfer of system ownership and operation responsibilities, or even the sale of publicly-owned water rights to private companies. Alternatively, various combinations are possible (5). There is a tendency to equate everything -- from entrusting service delivery to private parties to privatisation of the source itself -- under the rubric of privatisation. It is important to make these distinctions, as privatisation of service delivery is qualitatively different from privatisation of the source itself and these distinctions can have a bearing on the positions we take on the question of privatisation.

Though positions on the question of water privatisation are extremely polarised between pro and against, there is also a third position -- a position that says that water is both a social and an economic good -- that is gaining ground. This position essentially argues that there could be different mechanisms of service delivery -- like water users’ associations, private service providers, etc -- but under the overall regulatory mechanism of the state. Here the state’s role does not shrink but undergoes a change from that of service-provider to that of governance and regulation. From the point of view of resource-poor sections, it is also important to see that a substantial portion of the water resource is not under the purview of the market, and here the distinction that we made earlier between basic service and economic service could provide the norm. It is important to realise that we cannot keep water completely out of the laws of commodity production because, as we discussed earlier, a part of the water resource is in any case used to produce commodities and, as a result, for surplus generation.

Peter Gleick and others argue that water can be both a social and an economic good. Access to clean water is fundamental to survival and critical for reducing the prevalence of many water-related diseases. Other dimensions of water supply also have a social good character and therefore require governmental action, oversight, or regulation. However, he also advocates the use of sound economics in water management (6). The UNCED meeting held in Rio way back in 1992 recognised water as both a social and economic good when it said: “Integrated water resources management is based on the perception of water as an integral part of the ecosystem, a natural resource, and a social and economic good (7).”

(K J Joy and Suhas Paranjape are with the Society for Promoting Participative Ecosystem Management (SOPPECOM), Pune)


  1. Basically asymmetrical externalities and they are due to the unidirectional characteristic of ecosystem processes. For example in the case of water, upstream actions influence the wellbeing of people living downstream and not vice versa
  2. For details of the Sardar Sarovar Project alternative see Suhas Paranjape and K J Joy, 1995, Sustainable Technology: Making Sardar Sarovar Viable, Ahmedabad, Centre for Environment Education
  3. The South Maharashtra Movement spearheaded by the Shetmajoor Kashtakari Sanghattana (in collaboration with the Maharashtra Rajya Dharangrasth Va Prakalpgrasth Shetkari Parishad) has been successful in bringing the drought-affected and project-affected on one platform to support each other’s demands. This was made possible because the movement could articulate innovative demands to take care of the interests of the two sections. In fact, in Maharashtra, these are the two social sections in the rural areas that are the most politically active and the state is interested in keeping them at loggerheads. In south Maharashtra there have been joint struggles demanding implementation of  ‘first rehabilitation, then dams’, ‘equitable distribution of water’ and alternatives to government-designed dams so that submergence and displacement can be brought down drastically.  The case of the Uchangi dam in Kolhapur district is a good example of this. For details of this innovative movement see the following article by Anant Phadke: (1) ‘Dam Oustees' Movement in South Maharashtra’, Economic and Political Weekly, November 18, 2000; (2) ‘Anti-Drought Movement in Sangli District’, Economic and Political Weekly, November 26, 1994; (3) ‘Science and Sustainable Development’, Economic and Political Weekly, November 7, 1992; (4) ‘Left Response to Drought in Maharashtra’, Economic and Political Weekly, February 8, 1992; and (5) ‘A People’s Dam’, Economic and Political Weekly, April 22, 1989
  4. For details see Government of India, 1992, Report of the Committee on Pricing of Irrigation Water under the Chairmanship of Dr A Vaidyanathan, Unpublished, mimeo
  5. The definitions of commodification and privatisation of water are taken from Gleick et al, 2002, The New Economy of Water: The Risks and Benefits of Globalisation and Privatisation of Fresh Water, Pacific Institute for Studies in Development, Environment, and Security, Oakland, California
  6. For details of his critique on privatisation and also how he visualises that water can be managed both as a social and economic good and the role of the state in this, see Gleick et al, 2002 (reference given in footnote 5 above)
  7. As quoted in Gleick et al, 2002

InfoChange News & Features, October 2005