The Economics of India's Clean Water Transition and Its Social Dividend

Abstract

By the 2020s‚ the Indian water economy was paradoxical, while 76th round estimated that 94․5% of rural households and 97․4% of urban households accessed improved water‚ less than a quarter of Indian households had piped water connection within the household‚ and less than half the rural households had sole access to their primary water source․ The article argues that the water economy of India is no longer constrained by access to infrastructure‚ but rather by the quality‚ reliability and service provided at the point of delivery․ Based exclusively on secondary data available until December 2020 (NSS 76th round‚ CGWB dynamic assessment 2020‚ CPCB national inventory of sewage treatment plants‚ Niti Aayog Composite Water Management Index and World Bank‚ 2016‚ Excreta and Economic Growth study)‚ the article sets up an accounting framework linking water quality with health expenditure‚ economic productivity and human capital investment․ It finds that the marginal social benefit of spending one additional rupee on wastewater treatment and service level guarantees is greater than the benefit of spending it on additional connections; and that the disproportionate impact of water quality is borne by rural women‚ the lower consumption quintiles and geogenic hotspots․