April 10, 2002

‘32’

BUDGETARY RESOURCES NOT ENOUGH TO MEET THE REQUIREMENTS OF WATER AND SANITATION

    Minister of State for Urban Development and Poverty Alleviation Shri Bandaru Dattatraya has stated that the problem of water supply and sanitation cannot be addressed from budgetary resources.

    "As against the investment requirement of Rs. 22,000 crore annually as per India Infrastructure Report, the budgetary support from Government sources are available only to the tune of Rs.5000 crore per annum thereby leaving a gap of nearly Rs.17, 000 crore per annum."

    Inaugurating the two-day Regional Consultation on Water and Sanitation for Asian Cities here today, Shri Dattatraya emphasized the need for initiating institutional, fiscal and financial reforms in the urban sector to bridge the enormous gap between the need for sufficient infrastructure services and resource availability.

    Observing that the inadequacy in urban infrastructure on the environment and public health entails an enormous economic cost, Shri Dattatraya said that two central level policy instruments by way of City Challenge Fund and Pooled Finance Development Fund have been announced in this year’s budget to support the urban reform measures. In addition, the public-private partnership will also play key-role in water supply and sanitation sector.

    In his welcome address, Secretary, Department of Urban Development Shri K. Kosal Ram underlined the need for a regulatory framework for the private sector participation in financing and delivery of infrastructure at the municipal level, especially in the water and sanitation sector, so as to protect the consumers, apply environmental standards and support the delivery to the poor.

    Shri Kosal Ram stated that first generation urban sector reforms put emphasis on empowering the urban local bodies with financial resources. He further added that in order to strengthen the local bodies and to address the various urban problems such as infrastructural deficiencies, second generation reforms have been initiated in the urban sector. The second generation reforms include preparation of Model Legislation for facilitating private sector participation in urban infrastructure, reforms in accounting system for municipalities to ensure transparency, rationalization of property and non-property taxes, the fiscal incentives for attracting private sector investments in urban infrastructure, Foreign Direct Investment (FDI) in urban infrastructure and for development of integrated townships. Tax exemption for Municipal Bonds for raising resources for urban infrastructure has also been announced.

    The Consultation aims at stimulating a dialogue on key issues and emerging priorities in the water and sanitation sector and to move towards a broad consensus on effective ways of meeting the Millennium Summit goal of improving the living conditions of at least 100 million slum dwellers by the year 2020. The Consultation would also provide an opportunity to share good practices, experiences on water and sanitation sector and to develop a framework programme proposal on Water for Asian Cities.

    The consultation, jointly organized by the Ministry of Urban Development and Poverty Alleviation, Housing & Urban Development Corporation, Asian Development Bank and the United Nations Human Settlements Programme (UN Habitat), is being attended by eminent water and sanitation experts, local authority representatives, national agencies from Asian countries and international agencies.