The main challenge facing most centrally sponsored schemes (CSS) has not been the lack of funding but that of strengthening implementation, monitoring and, more fundamentally, linking funding to performance. The rural drinking water sector, under the National Rural Drinking Water Programme (NRDWP) has made a beginning in this direction.
- The NRDWP, a successor to the Accelerated Rural Water Supply Programme, was started in 2009. This CSS, with funding on a 50:50 sharing basis between the Centre and the states, had invested about 1.2 trillion rupees on rural water between 2009 and 2017.
- Until now, NRDWP funds were allocated from the Centre to the states on a “formula” basis, mainly using population, water scarcity and water quality as criteria.
Changes in NRDWP –
- Hitherto, the provision of rural drinking water under the NRDWP was no exception to the usual “formula” based approach to releasing the Central share of funds, leading to a sense of entitlement among states and little incentive to improve performance.
- Consistent with global best practices (such as the Program-for-Results lending instrument of the World Bank) in performance-based financing of service delivery, the restructured NRDWP adopts a results-based and sustainability-focused approach to financing rural water supply schemes across the country and, in the process, has also introduced a measure of competition among states to compete for Central funds.
Reforms introduced –
Three key reforms have now been introduced –
- Reimbursement mode: Half the funds of the second instalment released by the Centre are being done on a reimbursement basis, with the states having to pre-finance implementation;
- Challenge mode: If a state does not pre-finance, its notional funding envelope under the second instalment goes into a common pot to be shared among other “performing” states (that is, those who successfully pre-finance and implement);
- Sustainability mode: The other half of the second instalment is to be distributed among states based on their performance with respect to the functionality of their completed rural drinking water schemes as assessed through an independent, third party survey.
The key rationale underpinning these sector reforms was to incentivise states to take more direct responsibility under their Constitutional mandate (water being a state subject) for the service delivery of drinking water.
- Institutional and financing reforms should go hand in hand with the new approach. The Public Health Engineering Departments in states responsible for implementation of rural water supply services need to shift from a construction-centric approach to a consumer centric approach.
- Management of drinking water services in rural areas also need to be increasingly devolved to the lowest appropriate level, ideally letting gram panchayats and village water and sanitation committees manage services for smaller schemes.
- In addition to institutional reform, more robust financing mechanisms are also required. User fees for drinking water, ideally at least covering the operation and maintenance cost, should be encouraged.
While further and deeper reforms are needed in the rural water sector, the recent Cabinet approval of NRDWP restructuring is an important first step towards achieving the goal of providing safe and sustainable piped water through household connections to the rural population of the country. Service delivery will significantly improve through a performance-based and competitive approach.
Check the background section of the article.