Why AAP’s free water promise in Delhi is careless populism

Delhi has a serious water problem. But the problem is not that consumers pay too much for water. It's the fact that consumers receive too little of a vital resource, not more than two hours a day even in the most affluent parts of the city. It's an issue serious enough to dominate an election campaign.

A pity then that the Aam Aadmi Party opted for the administratively easy (but fiscally tough or should one say irresponsible?) option of offering to reduce water tariffs rather than the administratively harder (and fiscally easier) offer of ensuring 24x7 water supply to all the capital's residents.

Representational image. PTI

Representational image. PTI

For Arvind Kejriwal, keeping the promise of 700 litres of free water (it is going to be 670 litres per day) was always going to be easy. It only needed the stroke of his pen and a slight alteration in the Delhi Jal Board's water bill calculations. Fulfilling the promise of 24x7 water supply to every household in Delhi would have tested Kejriwal. For a start, it would have meant providing connections to the 7 lakh households (or 20 percent of Delhi’s households) which are not linked to the water grid. It would have also meant thinking hard about how to increase the overall water supply in Delhi. It would have meant clamping down on theft. It would have meant thinking about water conservation strategies. It would have meant finding an appropriate price for water so that people valued the water they consumed, and not wasted it. But all of that may have been too complicated for the Aam Kejriwal. Careless populism pays off in the short run in electoral politics.

But in the end, nothing is free. Someone has to pay the price for free water. After all, supplying water costs money — the physical infrastructure and the human resources at the least. If not consumers, then taxpayers must foot the bill. It's a folly to argue that only the rich pay taxes. The poor do too. Everyone who buys even basic commodities or buys a basic service pays a Value Added Tax or Service Tax. Indirect taxes are not progressive (the rich don’t pay extra) and they form the revenue base of a state Government like Delhi’s. So for "free" services like water, the poor without piped connections will end up paying a subsidy for the rich. Is that a pro-aam aadmi policy?

Careless populism has graver consequences. The government can only provide free services as long as it has the revenue to pay for it. At some stage, careless populism means a busting of the fisc which necessitates a rise in tax rates or a cut in government expenditure, which will eventually mean the necessary reversal of populism. Freebies are not sustainable, not in a poor country like India, not in a rich country like the UK.

Make no mistake. The AAP’s Delhi water policy is careless populism. At 670 litres per household per day, the AAP government is basically giving every individual the right to consume around 170 litres of water a day free. As the economist Surjit Bhalla points out in his article in The Indian Express, that threshold is well above the per capita consumption level in Western countries like Germany and Denmark. AAP’s decision to charge consumers for the entire amount consumed should they go even one litre above 670 a month will only encourage the manipulation of water meters on a gigantic scale, rather than rationalise consumption.

If the AAP had cared to look around for role model case studies in how to manage water, they would have found them right here in India. In 2012, Isher Judge Ahluwalia, who chaired a High level Government Committee on Urban Infrastructure wrote an article in The Indian Express in which she documented in some detail how the local authorities in Amravati, in Maharashtra’s Vidarbha region, had ensured 24x7 water supply to 20 percent of their 7 lakh residents (they were scaling it up at the time she wrote) in rapid time by using technology, sophisticated data gathering, restoration of piping systems and the imposition of differential tariffs depending on how much water was consumed. Amravati was following the example of Malkapur (also in Maharashtra) which had used similar methods to provide 24x7 water ti its 40,000 residents.

Now, if Malkapur and Amravati can deliver 24x7 water supply to their residents why cannot the Government of Delhi? If the residents of Malkapur and Amravati are happy to pay for their water (tariffs go up as people consume more, but nobody gets it free) why won’t Delhiites who are, on average, more prosperous?

Why should the Aam Aadmi Party be allowed to fritter away the Rs 446 crore profit the Delhi Jal Board made in 2012-13 in subsidies to the middle class and rich when that money would be better used connecting the 7 lakh poorest households who are not getting any water at all, and who are at the mercy of the water tanker mafia which charges them several times the multiple of the average water tariff in Delhi?

The middle class euphoria over not paying water bills is clouding over the reality that the AAP is implementing a regressive policy measure, which helps the middle class more than the poor. There are better role models for water management and supply in India. AAP needs to work harder at its policies if it doesn’t want to bankrupt the capital, and then rob itself of credibility.

Published Date: Dec 31, 2013 07:20 am | Updated Date: Dec 31, 2013 07:24 am