Mobilising Funds: Recent trends and developments in the water and waste sector

Recent trends and developments in the water and waste sector

India is facing a severe water crisis that is becoming a critical issue. The country is home to about 17 per cent of the world’s human population and 20 per cent livestock population. However, it has access to only about 4 per cent of the world’s freshwater reserves.

India receives 3,000 billion cubic metres (bcm) of water every year through rainfall or other sources such as glaciers. Of this, only 8 per cent is collected. The total capacity of India’s reservoirs stands at 250 bcm, while its total water bearing capacity over the surface is around 320 bcm. India adds 458 bcm of groundwater per year, whereas it extracts around 650 bcm of water from the earth. Nearly 89 per cent of India’s water resources are used for agriculture, of which 65 per cent water is drawn from under the ground. Industry too meets around 80 per cent of its water requirements through underground sources. Therefore, one of India’s biggest challenges is to conserve groundwater.

As far as solid waste management is concerned, waste dumping and open burning continue to be the principal methods of waste disposal in the country. Most cities and towns dispose of their waste by depositing it in low-lying areas outside the city. Hence, there is a need to promote environment-friendly methods of disposal on a large scale.

The onset of the Covid-19 pandemic led to a spike in the generation of biomedical waste. India generated 56,898 tonnes of Covid-related biomedical waste between June 2020 and June 2021. At 8,317 tonnes, Maharashtra generated the highest quantum of biomedical waste in the country during this period. This is a huge increase from 2019-20, when only 62.3 tonnes of biomedical waste was generated in the state.

Indian Infrastructure tracks the recent key developments in the water and waste sectors…

  • In a bid to deliver the targets set under the Jal Jeevan Mission, the Ministry of Jal Shakti recommended the adoption of IoT-based JanaJal Water on Wheels (WOW) to states and union territories in December 2020. Monitored by GPS, JanaJal WOW is a battery-operated three-wheeler with zero carbon emissions. It also uses an innovative solution based on anti-counterfeiting technology to prevent unauthorised refilling of water. It ensures the delivery of safe drinking water complying with Bureau of Indian Standards and World Health Organisation standards. According to the ministry, untreated water remains one of the major causes of Covid-19. Hence, availability and access to safe drinking water has become a necessity. At present, JanaJal manages over 750 water ATMs and safe water points in association with various implementing agencies.
  • In January 2021, the Vadodara Municipal Corporation (VMC) issued bonds to raise money to fund development works sanctioned under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme. Under the AMRUT project, VMC has received approval for its detailed project report of 14 works worth Rs 4.74 billion. The tender value of these works is Rs 5.33 billion, of which VMC has to contribute approximately Rs 2.24 billion. The civic body received favourable credit ratings from two agencies and floated its municipal bond in January 2021 to mobilise Rs 1 billion.
  • In December 2020, the West Bengal government relaxed some of the austerity measures that were introduced in April 2020 due to the outbreak of the Covid-19 pandemic. Reportedly, departments such as public works departments, irrigation, public health engineering, urban development and municipal affairs have been allowed to initiate new schemes worth up to Rs 30 million. All other departments have been allowed to introduce new schemes worth up to Rs 5 million. The decision was taken in the backdrop of improvement in the state’s revenue generation and decline in Covid-19-related costs.
  • In February 2021, the Ministry of Jal Shakti, Department of Drinking Water and Sanitation, received a budgetary allocation of Rs 600.31 billion under the Union Budget 2021-22. Of the total allocation, the outlay for the centrally sponsored schemes under the Department of Drinking Water and Sanitation is Rs 600.05 billion. Further, a provision of Rs 500.11 billion was made for the National Rural Drinking Water Mission /Jal Jeevan Mission and Rs 99.94 billion was earmarked for the Swachh Bharat Mission. Moreover, additional funds worth Rs 90.23 billion were allocated to the Ministry of Water Resources, River Development and Ganga Rejuvenation, with a provision of Rs 6 billion for the Namami Gange programme.
  • In February 2021, the central government launched a new flagship programme, Jal Jeevan Mission (Urban), to provide piped water supply and tap connections to all households in urban areas with a population less than 100,000. The government allocated Rs 1.35 trillion for the scheme, which will be implemented over a period of five years, from April 2021 to March 31, 2026. Under this scheme, households in about 4,000 towns with a population-less than 100,000 will be provided with piped tap water connections.
  • In February 2021, Goa became the sixth state to complete reforms in urban local bodies (ULBs) after Andhra Pradesh, Madhya Pradesh, Telangana, Manipur and Rajasthan. With the completion of the reforms, Goa received the Ministry of Finance’s approval for an additional borrowing of Rs 2.23 billion. These reforms are aimed at the financial strengthening of ULBs, enabling them to provide better public health and sanitation services. The central government enhanced the borrowing limit of states by 2 per cent of their GDP on May 17, 2020, in order to mitigate the challenges posed by the Covid-19 pandemic. Half of this special dispensation was linked to citizen-centric reforms by the states, such as the implementation of the one nation, one ration card system, ease of doing business reforms, ULB/utility reforms and power sector reforms.
  • In February 2021, the Telangana government proposed a new policy decision of funding municipal bodies through municipal bonds. The government asked several ULBs in the state to raise funds through bonds or pool funding and list out the works to be taken up under these funds. Once the credit rating of ULBs is completed, the authorities are planning to prepare the preliminary draft shelf of projects for raising funds.
  • In April 2021, the Ghaziabad Municipal Corporation raised Rs 1.5 billion through the issuance of India’s first green bonds. The capital raised is proposed to partially fund the tertiary sewage and water treatment plant in Ghaziabad entailing an investment of Rs 2.39 billion. The tertiary treatment plant will benefit industries in the city. The corporation also received Rs 195 million as incentive from the central government to raise funds through municipal bonds.
  • In May 2021, the central government approved the signing of a memorandum of cooperation (MoC) on sustainable urban development between the Ministry of Housing and Urban Affairs, Government of India, and the Ministry of Land, Infrastructure, Transport and Tourism, Government of Japan. The MoC replaced the existing MoU on urban development signed in 2007 between the two countries. A joint working group will be constituted to strategise and implement programmes on cooperation under the MoC framework. The joint working group will meet once a year, alternately in Japan and India. The MoC is expected to create employment opportunities in the areas of sustainable urban development, urban planning, smart city development, affordable housing (including rental housing), urban flood management, sewerage and wastewater management, urban transport (including intelligent transport management system, transit-oriented development and multimodal integration) and disaster-resilient development.

Going forward, new and advanced remote monitoring systems and solutions for asset and workforce management will need to be adopted by ULBs in order to sustain in the post-Covid world. The demand for advanced technologies such as smart water meters and sensors, supervisory control and data acquisition systems, GIS-based mapping and GPS-based tracking is expected to increase in the coming years.

Over the past one year, various civic bodies have started exploring new methods of raising funds. Many ULBs are now issuing bonds for infrastructure development and the trend is expected to continue and gain traction in the future.