The Economics of Water in India
Water Tariffs and 24x7 Supply
How water tariffs work in Indian cities, why they rarely cover costs, and what cities that moved to 24-hour supply learned.
Many Indian cities charge low water tariffs that don’t cover the cost of supply.
Tariff types
- Flat rate: a fixed monthly charge regardless of use.
- Metered: pay per kilolitre, often with slabs.
- Free basic amount: Delhi, for example, offers 20 kilolitres a month free to households with working meters.
Cost recovery
When tariffs don’t cover costs, utilities depend on government grants, and maintenance suffers.
24x7 supply
Some cities have tried continuous supply:
- Puri in Odisha became notable in 2021 for providing drink-from-tap water to residents.
- Parts of Nagpur and Karnataka towns ran 24x7 pilots.
Lessons
- Metering and fixing leaks are essential.
- Continuous supply can reduce total use, since people stop hoarding.
- Better service increases willingness to pay.
Challenges
- Upfront investment in pipes and meters.
- Political resistance to tariffs.
The tap you can drink from
In Puri, residents can drink safe water straight from the tap, 24 hours a day. They no longer need storage tanks or purifiers.
Thinking 24x7 supply wastes water
With metering and leak repair, continuous supply can reduce hoarding and total use.
Key takeaways
- Many cities charge low tariffs that don't cover costs.
- Delhi offers 20 kilolitres a month free to metered households.
- Puri provided drink-from-tap water from 2021.
- Metering, leak repair and better service are key.
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