INTRODUCTION:

Availability of safe and clean water is a fundamental element of the health of the people. Inadequate and poor quality of drinking water not only resulted in more sickness and deaths, but also augments health costs. There are a number of water borne diseases like diarrhea, cholera, jaundice, Japanese encephalitis, gastro, typhoid, malaria, filariasis etc. 80% of the diseases in the developing countries are linked with contaminated water. It is indeed a matter of great concern that even after six decades of independence, our country has not succeeded in providing water, especially drinking water in rural and many urban areas.

In India, with development the demand of water is increasing both in urban and rural areas. Urban services like water supply, sewerage, solid waste disposal, city wide roads and street lighting are the responsibility of urban municipal corporations and councils. In most of the cities, these urban services continue to be in an unsatisfactory state. One of the reasons for the unsatisfactory services is inappropriate prices for these services. Setting appropriate prices is indispensible to providing adequate water to India’s growing urban population. Under pricing of water is damaging long-run consequences for households who have limited and poor quality water services and for water supplying entities that are unable to invest and expand water coverage.¹

Therefore, setting appropriate price for the urban water supply is key to the urban water sector in India. In most of the Indian cities, it can be observed that –²

· Prices are low in relation to the cost.

· Poor services and slow expansion.

· Water subsidization.

While setting water tariffs following objective should be considered properly –³

· Revenue sufficiency

· Economic efficiency

· Equity

· Poverty alleviation

Three types of instruments are generally used for charging water. They are –

· Connection fee or fixed access charge.

· Water tax unrelated to water use.

· Water charge as a charge on consumption.

Several types of water tariff are in use in Indian cities. They are-⁴

· Increasing Block Tariff.

· Uniform Volumetric Charge.

· Linear water charge.

· Two part tariff.

Since water is essential to human life, water pricing becomes the sensitive issue in a developing country like India. The common perception of people is that anything that is essential to human life has to be supplied by the government at a subsidized rate. As a result the political parties generally oppose any small increase in water prices by a local body. The prices therefore, are charged less than the long run marginal cost of the water. The existing price structure is, therefore, unsustainable and lack incentives.

Water lies between the two extreme of purely public and private goods. Given the nature of the good, we do not know how much monetary value people attach to good quality of water supply. We use contingent valuation method which is a direct valuation method to elicit the value individuals attach to the non-marketed environmental goods. Since, the urban local bodies are providing safe and good quality of treated and piped water into their dwelling, the use of willingness to pay format is appropriate. Although, a number of theoretical and methodological issues and criticisms have been raised concerning the application of the contingent valuation method in general and in its application in developing countries in particular. A look into the literature indicates that, at least at the theoretical level, a large number of criticisms, particularly those related to economic theory, is in one way or other, linked with problems in details of specific studies, such as how the questionnaire was prepared and the way data were collected and analyzed.

Water supply scenario:

Access to safe drinking water in households in India⁵ during 2001 to 2011 has increased from 77.9% to 85.5%. In urban areas, during this period it has increased 90% to 91.4%. Kerala, Jharkhand, Assam and Odisha are some of the Indian states where urban water situation is the worst. Talking about improved source of drinking water, only 24.5% of households in India in 2005-06 are getting water from piped water into their dwelling. For urban areas this ratio is 50.7%. Nearly, 82% of households use drinking water without any treatment or strain through cloth. Mostly, collection of water is the responsibility assigned to female as 87% of population consumes water collected by a female in 2005-06. In 2011, in Chhattisgarh, although 85.5% of total households and 91.4% of urban households have access to safe drinking water, yet in Chhattisgarh, only 20.7% of households get water from treated or untreated tap. Hand pump/ Tube well/ Bore well are the main source of drinking water available to nearly 65.6% of households. So, far as location of drinking water source is concern, only 19.1% of households have access within their premises. 26.6% of households have to fetch water from away. In urban areas in Chhattisgarh, in 2011, 49.8% of the households have access to drinking water within their premises. There is a wide gap between rural and urban drinking water facilities. Rural areas are far behind to urban areas both in terms of access as well as quality of water.

In Durg district, where our study area Bhilai is, 35.8% of households get drinking water from piped sourced and 60.5% from hand pump/tube well/bore well. Durg district is in a better position regarding access to safe drinking water as compare to other districts of Chhattisgarh, as 96.2% of households in the district have access to safe drinking water as compare to 86.1% in the state.

Introduction to the study area:

Chhattisgarh is a new state carved out of M.P. on 1^st Nov. 2000. The formation of a socially and economically backward state like Chhattisgarh, which has 31% of ST and 13% of SC population, has thrown both challenges and opportunities for the development of the state. The state has 23.3% urban population and 76.7% rural population. Population density in the state is 189 while literacy rate is 70.3%. state’s per capita income is 26979/- in 2011 at constant prices 2004-05.

Bhilai:

Bhilai is a city of Chhattisgarh state in Durg district. It is on the Mumbai-Howrah railway line and is famous for its steel plant. The population of the city in 2011 was 6.25 lakh, second largest city in Chhattisgarh after Raipur with 11 lakhs.

Bhilai Municipal Corporation was constituted on 08.06.1998. There are 67 wards in Bhilai Municipal Corporation area, but in 23 wards the responsibility of providing urban services in lying with the Bhilai Steel Plant. So, BMC has to provide urban services only in 44 wards which are divided in 05 zones. 60% of population of Bhilai lives in these 44 wards. Total area of BMC is 141 sq. km. in which there are 48 declared slum areas. There are 76000 families fall under below poverty line of which 20000 families are very poor.

Bhilai Municipal Corporation comes under the purview of department of urban development and administration, government of Chhattisgarh. Mayor, elected directly by the people, is the head of the Bhilai Municipal Corporation. There are 14 major-in-council members. Commissioner is the head of the administrative body of the corporation accompanied by various heads of the department recruited by the state government. There are 19540 private tap connections including commercial tap connections by BMC. Out of these 19540 tap connections only 5507 are paid connections while 14033 are unpaid tap connections. There has been a considerable progress regarding extension of tap connections as number of private tap connection in 2008-09 was 8250 which increased to 19540 in 2012-13. The Vrihat Peyjal Yojana started by the state government during the period is primarily responsible for that. Total availability of water per day is 77 mn. Ltr. Against the standard per capita availability of water 135 ltr per day, BMC is supplying 125 ltr. of water per capita per day. Total recovery of water tax by BMC is Rs. 125.4 lakhs in the year 2012-13 against an annual demand of Rs. 410 lakhs. Cost recovery in water supply services by BMC has increased from 59% in 2010-11 to 99.9% in 2012-13. But efficiency in collection of water supply related charges is still quite low at 30.58% which has been targeted at 50% for the year 2013-14.

OBJECTIVES OF THE STUDY:

The objectives of the study are:-

1. To find out the cost of water supply in Bhilai by the Bhilai Municipal Corporation.

2. To evaluate the water supply management in the town by the Bhilai Municipal Corporation.

3. To assess the health expenditure of households because of the water born diseases.

4. To assess the willingness to pay for safe drinking water in Bhilai town.

5. To suggest policy initiative to improve water supply management in cities of Chhattisgarh.

Of the above objectives the primary objective of the study is to assess the willingness to pay for the water services provided by the BMC.

RESEARCH DESIGN:

This study is primarily aimed at assessing people’s monetary valuation for safe drinking water supplied by the Bhilai Municipal Corporation. For this purpose, contingent valuation method has been used. Contingent valuation methodology involves asking a random sample of respondents for their willingness to pay for a clearly defined good or service. The value elicitation question is designed to draw out people’s willingness to pay for a specific good or service. The most widely used elicitation formats are:- Open ended, bidding game, payment card and single bounded or double bounded dichotomous choice. In this study, a double bounded dichotomous choice format has been used. In this method, a set of choice has been given to the respondent and after his choice of preference, he has been asked to say yes or no to higher/lower bids. So by this way it has been tried to reach the nearest level of respondent’s willingness to pay for safe drinking water supply by the Bhilai Municipal Corporation.

Sample Design:

People living in the 44 wards which are divided into 5 zones of Bhilai Municipal Corporation is the sampling frame of the study. A sample of 200 households has been selected randomly in the Bhilai town of Chhattisgarh which consists of respondents spread over 22 wards representing all the 5 zones under BMC. Although, the sample households have been selected randomly yet utmost care has been taken to include all kinds of households according to income family size etc. in to the sample to make it more representative. Those who have tap connection from BMC and those who don’t have tap connection from BMC may value differently the water supply services of BMC. Therefore, both types of households have been included in the sample. Out of 200 sample households 110 (55%) are those households who have tap connection and 90 (45%) are those households who don’t have tap connection.

Survey Method:

Personal interview method has been adopted for this study. A comprehensive questionnaire has been prepared. Following interviews with the key informants the researcher along with the numerator, completed 200 in-depth household interviews throughout the city. The questionnaire is classified in seven points broadly, enquiring information about composition of the family, detail of employment awareness about safe and scare water source of water available expenditure on purification of water, health related information and willingness to pay for water supply by BMC. This way primary data has been collected. Secondary data has been collected from the records of the BMC and the website of BMC as well as the department of urban development and administration, government of Chhattisgarh.

LIMITATIONS OF THE STUDY:

The contingent valuation method is done in a hypothetical market situation, thus the result depends mostly on the reliability of the data collected. Although the reliability of data depends largely on the size of the sample as well as the competency of the surveyor, yet the indifferenceness of the respondents is a major limitation of the study. Moreover, data about health cost could not be analyzed because of the non-responsiveness of the respondents. As this study is primarily based on the contingent valuation method, the limitation of the CVM is also applicable.

Sample Characteristics:

Out of the 200 households surveyed, the head of the families in 17% households are government servant, 19.5% private service, 20% self business, 17.5% laborer and 26% others. 79% of sample families are single families while 21% are joint families. Mean of sample families is 4.66 and mean age of respondents is 50.8 yrs. There are 26.5% of sample families in which more than one member are earning. Out of the 200 respondents, 7.5% are illiterate, 11% are primary or below, 11.5% up to middle, 31% up to higher secondary and 39% up to college educated. 32% of households have income less than Rs. 10000/- p.m., 30% have income 10 to 20 thousands, 14.5% have income 20 to 30 thousands, 8% have income 30 to 40 thousands, 3.5% have income 40 to 50 thousands and 11.5% have income above Rs. 50000/- p.m. Out of 200 sample households 42.5% have tap connections only source of drinking water and 12.5% have tap connection and hand pump both. So, 55% of households have tap connection from BMC and 18% get water from public tap. 22% of households get water from hand pump and rest of the households get water from other sources.

Survey Results:

73.6% of respondents are satisfied with the water supply by BMC while 23.6% are not satisfied. 65.4% of respondents stated that water supply is regular, 31.8% stated occasionally irregular, only 2.7% stated it often irregular. 79.1% of respondents have no complaint about the water supply while 20.9% have complains. 7% respondent rated the water supply services of BMC as excellent, 33% good, 50% satisfactory, 9% dissatisfactory and 1% rated it bad. So, nearly 90% respondents rated it satisfactory or more. The average weight for the 110 households who have tap connection from BMC is 3.4 which is in between satisfactory and good. 50% of sample households use drinking water without any treatment or any strain through cloth. 23.5% use electric/electronic purifier while 18.5% use water after boiling.

FINDINGS:

In years to come, water, the need of life, is possibly to pose greatest challenge on account of its increased demand with population rise, economic development and shrinking supplies due to over exploitation and pollution. In India, with development, the demand of water is increasing both in urban and rural areas. This may create increased tension and dispute between these areas for sharing and command of water resources. With urban expansion, population and life style changes, urban water supply need often exceed supply availability. The emerging scarcity of water has also raised a host of issues related to sustainability of present kind of economic development, sustained water supply, equity and social justice, water financing, pricing, governance and management. Most urban water supply authorities prefer to respond to this demand deficits problem by augmenting existing supply via tapping new distant and often costlier water resources. A mere supply side solution does not create appropriate economic environment for the emergence of innovative practices. The policy of supply augmentation overlooks the role of pricing in regulating demand for water.

The urban water supply sector in India is characterized by inefficient delivery of services and inadequate coverage with piped water supply especially for the urban poor. Poor cost recovery has also rendered most of the water utilities in the country as financially unsustainable. One of the reasons for such a scenario is that water utilities in India are not operated independently and are not managed on principle of accountability and transparency and are loosely regulated. Another important factor is that prices for water are not determined based on economic principles and are based on socio-political consideration rather than cost involved. Bhilai Municipal Corporation is the second largest municipal corporation in Chhattisgarh after Raipur according to serving population. Three years back when sixth pay commission report was implemented and the employees of the state government were getting their new pay scales, the urban development and administration ministry of Govt. of Chhattisgarh has issued an order that sixth pay commission pay scale will be given only to the employee of those local government body who have establishment expenditure below 65%. The employees of the department went on strike against this rule. Even today itself the state govt. has not given arrears of the sixth pay scale to the employees of urban local bodies which had compelled the employees to go on strike. It all reflects that the economic condition of the urban local bodies is not good enough. Most of the urban local bodies are heavily dependent on the state government for financial assistance. Wealth tax is the most productive source of revenue for the urban local bodies. But urban services provided by the municipalities need to be economically efficient. One of the most important services provided by the Bhilai Municipal Corporation is water supply. This study was primarily aimed at finding consumer’s willingness to pay for the safe drinking water supplied by the Bhilai Municipal Corporation along with other objectives. Here is a brief discussion of the findings of the study.

1. In India, in 2011, access to safe drinking water in households was 82.7% for rural and 91.4% for urban area with a total of 85.5%. There has been a considerable growth in household’s access to safe drinking water from 1991, 2001 to 2011 as it has increased from 62.3% to 77.9% & 85.5% respectively.

2. At the time of formation, Chhattisgarh state had 70.5% of household access to safe drinking water which has increased to 86.3% in 2011. Its rank in India is 13^th among 19 major states in 2011. But state’s position is better than the all India average.

3. Only 23.5% of population in India has access to safe drinking water through piped water into dwelling according to NFHS-3, 2005-06.

4. There is gender biasness in the society as in 85.4% of households in India, female collects water for their family.

5. 51% of households in urban areas while 72.7% in rural area, in India consume drinking water without any treatment. Apart from that 19.1% in urban and 15.4% in rural areas, the households use water by straining through cloth.

6. According to census 2011, in C.G., regarding location of water, 19.1% of households have water within their premises, 54.6% have near the premises and 14.89% have source of water far away from their premises.

7. 58.4% of households have hand pump as their main source of drinking water, 20.7% have tap water from treated or untreated source and 10.6% have water from uncovered wells in C.G. in 2011.

8. In Durg district in 2011, 25.9% of households have drinking water within their premises which is better than the C.G. average of 19.1%, 53.9% of households in the district have drinking water near the premises and 20.1% away from their premises. So, nearly, 80% of households in Durg district have drinking water within their premises or less than 0.5km from their premises.

9. Nearly 35.8% of households in Durg district in 2011 have tap water from treated or untreated source, while 59.5% of households have hand pumps/tube wells as their main source of water.

10. Bhilai Muncipal Corporation is serving 6.26 lakh people spread over 141.30 sq. km. of area, divided in 67 wards under 6 zones.

11. 60% of population under Bhilai Municipal Corporation belongs to weaker section of society and live in slum areas. Nearly 76 thousand families are below poverty line.

12. Per capita per day supply of water by the Bhilai Municipal Corporation is 125 ltr. at present which was 87 ltr/day in 2008-09. But it is still less than the standard of 135 ltr/day.

13. The quality of water supplied by the BMC is good and safe.

14. Per capita expenditure on urban services by BMC in Bhilai in 2012-13 is Rs. 2640/- p.a.

15. Number of private tap connections in Bhilai has increased 2.4 times in last five years and has reached up to 19540 in 2012-13 from 8250 in 2008-09.

16. Of the total tap connections by BMC 28% are paid connections including commercial connections & 72% are connections without any charge and water tax at a concessional rate under Bhagirathi Nal Jal Yojana.

17. Coverage of water supply has been 24.41% in the year 2012-13 which has been targeted at 50% for the year 2013-14.

18. Rate of water tax is decided by the urban development and administration department, government of Chhattisgarh and the municipal bodies have to follow it. So, there is no liberty for the municipal bodies to increase or decrease the rate of water tax.

19. Collection of water tax in BMC has increased by 322.5% from Rs. 42.6 lacs in 2006-07 to Rs. 180 lacs in 2012-13. Collection of water taxes has increased sharply in last two years.

20. Demand of water tax has increased 8.6 times during 2007-08 to 2012-13 but the recovery of water tax has increased only 3.9 times.

21. The percentage of recovery against demand is still very low at 19.35% at present leading to huge over dues.

22. Cost of water supply (excluding salary expenses) has increased from Rs. 214.6 lacs in 2006-07 to Rs. 641 lacs in 2012-13, an increase of 198.7% during the period.

23. Operation & maintenance of filter plant, pump repair & maintenance and material expenses combined together is responsible for 85.8% of total expenditure in 2012-13.

24. Percentage of cost recovery in the form of water tax was 19.85% in 2006-07 which has increased to 28.08% in the year 2012-13.

25. Out of 200 sample households taken into the survey 110 (55%) households have tap connection from BMC while 90 (45%) households don’t have tap connection from BMC. 18% get water from public tap and 19.5% from hand pump (self).

26. 73.6% of the households who have tap connection from BMC are satisfied with the water supply services of BMC. 23.6% are not satisfied while 2.7% could not say anything. So, almost 3/4^th of the respondents who have tap connections from BMC are satisfied by the water supplied to them.

27. 65.4% of respondents who have tap connection from BMC said that the water supply from BMC is quite regular and 31.8% said that it is irregular occasionally. Only 2.7% of respondents who have tap connection said that water supply is often irregular.

28. 79.1% of respondents who have tap connection stated that they do not have any complain about the water supply by BMC while 20.9% stated that they have complains about the water supply.

29. Household perception about the BMC’s water supply for those who are existing consumers is between satisfactory and good. 40% of respondents rated it as good or excellent, 50% satisfactory and only 10% have rated it dissatisfactory or bad.

30. 74% of respondents who have tap connection said that the water supply is only 1 time in a day. Only 26% stated that the water is supplied 2 times in a day.

31. Regarding water purification method, nearly 50% of sample families use drinking water without any treatment (36.5% strain through cloth + 13.5% no treatment). 23.5% of respondents use electrical/electronic purifier and 18.5% of respondents consume water after boiling.

32. Out of 110 sample households who have tap connection from Bhilai Municipal Corporation, 88.2% are willing to pay more than what they are paying now and 11.8% did not respond. So, most of the households who have tap connection from BMC are willing to pay more. But 68.2% respondents are willing to pay 10% more than the existing rate. 12.7% are willing to pay 20% more than the existing rate. 12.7% are are willing to pay 20% more than the existing rate. The existing consumers of water supply by Bhilai Municipal Corporation are willing to pay 14.84% i.e. 15% approximately more than the existing rate. That comes to about 230/- p.m. wealth tax payers and 69/- for non-wealth tax payers.

33. For those households who don’t have tap connection from Bhilai Municipal Corporation, the willingness to pay is up to 100/- for 25.5% of respondents, up to 200/- for 38.9% of respondents and up to 300/- for 16.7% of respondents. 16.7% of respondents did not respond any amount willing to pay for water supplied by the BMC. So, the willing to pay amount for the 90 sample families who don’t have tap connection from BMC is Rs. 144.67 on an average which is even less than the existing rate of Rs. 200 for wealth tax payer and Rs. 60 for non-wealth tax payer.

34. When those households who have tap connection from BMC were asked what will they do if the water charges is increased more than the amount they are willing to pay? 12% said that they will surrender their tap connection, 14% said that they will use their personal source of water. 43% of respondents said that they will accept the increased rate of water charges by BMC.

35. Connection charge is a safe deposit that is charged at the time of giving tap connection to any household. No connection charges is levied on the BPL households while it is Rs. 5000/- for income tax payee and Rs. 2000/- for non-income tax payee. The sample households who do not have tap connection from BMC are willing to pay Rs. 1816/- as connection charges on an average. 59% of respondents are willing to pay less than Rs. 2000/- as connection charges while 19% are willing to pay more than Rs. 2000/- but less than Rs. 4000/-. Only 6% respondents are willing to pay more than 4000/- as connection charges.

36. The correlation co-efficient between willingness to pay and income is +0.27 for those households who have tap connection from BMC. So, the correlation is not significant.

37. For those households who don’t have tap connection from BMC the correlation co-efficient between income and willingness to pay is +0.65. As the correlation co-efficient is 14 times of P.E. there is a definite correlation between income and willingness to pay for those households who don’t have tap connection from BMC.

38. Out of 200 sample families 82% are aware of the importance of safe drinking water and 18% are unaware. Out of the 164 families (82%) who are aware 134 (67%) are willing to pay and 30 (15%) are not willing to pay. Of the 21 respondents who are not aware about the importance of safe drinking water, 20 are willing to pay.

39. For those households who have tap connection from BMC, the correlation co-efficient between education and willing to pay is +0.40 which is just 4.7 times of P.E. So, the correlation is not definite.

40. For those households who don’t have tap connection, the correlation co-efficient between education and willingness to pay is +0.30 which is just 3 times of P.E. So, the correlation co-efficient is not significant.

41. The correlation co-efficient between household size and willingness to pay is +0.20 which is not significant for those households who have tap connection.

42. The correlation co-efficient between household size and willingness to pay is -.04 which is also not significant for those households who don’t have tap connection from Bhilai Municipal Corporation.

43. The multivariate analysis taking income, education, awareness and household size as independent determinant for consumer’s willingness to pay for safe drinking water supply, shows that income and education have positive impact on willingness to pay while awareness and household size have negative impact. But all these four determinants have very little impact on willingness to pay as R² is only 22%. So, we can state that, in our study these four determinants are only 22% responsible for a change in consumer’s willingness to pay for safe drinking water. None of these factors is significant determinant of consumer’s willingness to pay in our study. Moreover, stepwise regression analysis reveal that out of these four factors income alone is responsible for 20% change in consumer’s willingness to pay.

CONCLUSION:

On the basis of our study some important conclusions can be drawn regarding consumer’s willingness to pay for safe drinking water supply.

1. The water supply scenario in Durg district is better than the Chhattisgarh state as a whole.

2. Although the percentage of households who have piped water supply, is increasing very sharply but hand pump remains the main source of water for Chhattisgarh till now.

3. The water supplied by the BMC is safe and good quality as it is within the desirable limits according to IS-10500 on various parameters.

4. There is a discriminating water charge in the state as Rs. 200/- p.m. for wealth tax payers and Rs. 60/- for non-wealth tax payers which is good by equity and social justice point of view.

5. Although the cost recovery from water tax for BMC has improved from a low of 11.23% in the year 2008-09 to 28.08% in 2012-13, yet it is still very low. Considering the fact that the cost calculated, does not include the salary expenditure, the cost recovery looks even worse.

6. If we include other income from water supply like connection charge collected at the time of new collection and also grant received from the state government in the form of refinance of connection charges under Bhagirathi Nal Jal Yojana along with the safe deposit received at the time of new connection, cost recovery looks good as the BMC has stated cost recovery of 99.9% for the financial year 2012-13 in a submission to the 13^th finance commission.

7. The efficiency in collection of water supply related charges is not satisfactory as the recovery percentage against demand has decreased to 19.35% in the year 2012-13 from 43.52% in the year 2007-08. The gap between total demand and recovery is increasing very sharply leading to a huge over dues.

8. The existing consumers of Bhilai Municipal Corporation are mostly satisfied with the services of water supply in all parameters like quality, regularity and adequacy.

9. Existing consumers of BMC are mostly (88%) willing to pay more than the existing rate of water charges. But most of them are willing to pay more in the lowest range i.e. 10%. It seems that the respondents are affected by the prevailing rate of water charge. Existing consumers are willing to pay 15% more than the existing rate on an average. So, there is a clean chance of increasing the water charges by 15%.

10. For those households who don’t have tap connection, the willingness to pay amount is Rs. 145/- approximately which includes both wealth tax payers and non-wealth tax payers. Considering the fact that there are two types of water charge i.e. Rs. 200/- for wealth tax payer and Rs. 60/- for non-wealth tax payers and about 72% of tap connections at present are for BPL families, this WTP amount is satisfactory.

11. The willingness to pay for connection chages is Rs. 1816/- for sample families. It shows that people are not willing to pay more as connection charges which is at present Rs. 5000/- and Rs. 2000/- for income tax and non-income tax payers.

12. Although existing consumer’s are ready to pay a small increase in water charges but most of them (43%) are going to accept even a substantial increase in water charge because they are ready to surrender their tap connection.

13. Income is positively correlated with willingness to pay for those households who don’t have tap connection from BMC. It means that the households with higher income are willing to pay more.

14. Education, awareness and household size are not significantly correlated to willingness to pay in our study although in many studies they all have significant correlation with willingness to pay.

15. Except income none of the factors like education, awareness and household size has a significant impact on consumer’s willingness to pay for safe drinking water supply.

16. Although people are ready to pay more but as the amount of consumers willing to pay more is very small, we can conclude that people despite all the awareness do not want to pay commercially for safe drinking water. That backs our hypothesis that normally people don’t want to pay commercially for those services which is primarily provided by nature.

17. The correlation co-efficient between income and willingness to pay clearly backs our hypothesis that higher income groups do not bother about the civil water supplies as they have alternate source of water supply. This is reflected by the fact that higher income group are not willing to pay more. In fact the lower income class respondents are willing to pay more as they don’t have alternate source of water.

SUGGESTIONS:

The primary objective of this study is to find out whether the consumers are willing to pay more for safe drinking water supplied by Bhilai Municipal Corporation. As we know that the urban local bodies are supposed to increase their financial resources and become self dependent. So, the study has been taken to see that if there is any chance of increasing the water charges. On the basis of our study some important suggestions are-

1. There is definitely a chance of increasing existing water charges by at least 15%. Moreover, as most of the existing users are not willing to surrender their tap connection if the charges are even increased substantially, so water charges can be increased in a range of 15 to 20%.

2. Consumers are more or less satisfied with the quality, adequacy and regularity of water supply. That is also suggesting that an increase in water charges will be borne by the consumers without much dissent.

3. Water charge according to income is quite justified as higher income groups are willing to pay more. It also backs the discriminating rate of water charges according to income. Therefore, a new slab for higher income groups could be created and charged Rs. 300 to 400 p.m.

4. Water connection charges should be reduced as the respondents willing to pay as connection charge is Rs. 1816/- as against Rs. 5000/- currently. Reducing connection charges will lead to sharp increase in number of consumers. At the time of survey we found that many of those households who have another source of water have not taken tap connection just because of higher connection charge.

5. Water charges recovery position is very poor for BMC. Percentage of recovery is quite less than the annual demand that has led to huge over dues. So, recovery mechanism is to be made simple and effective. For that, just like wealth tax is collected door to door, water charges should also be collected door to door.

6. Concession for advance payment of water charges and penalty for late payment will be good for improving recovery position just like it is done in the case of wealth tax.

7. ATP machines should be installed in each zone, so that the consumers may pay water tax regularly every month just like they do in the case of electricity bill and telephone bill.

8. There is a line loss of about 1.2 mld of water per day. It shows that there are plenty of illegal tap connections in the city badly affecting the revenue collection of the BMC. So, illegal connections should be abolished as soon as possible.

9. Water quality management and supervision system at the user’s point is to be set. Currently water quality is monitored only at the production level (Filtration plant level) and not at the distribution level.

10. Very high pressure of water near the water tanks results in wastage of water in some area, while scarcity at the end points. This needs to be addressed very soon. To solve this problem valve system should be changed accordingly to supply water with equal pressure at various points.

11. Meter has been installed in many households but water charge according to consumption has not been implemented. It has to be started as early as possible as it gives a 24 hour supply of water to the consumers. It will also assure the efficient use of water supplied by the BMC.

12. Urban local bodies should be given the right to decide the rate of water tax purely according to economic considerations which at present is decided by the Urban Development and Administration Department of the state government.

In general, the public perception is that, services of public welfare which the government machinery has to provide to the people, should be provided at a cost as low as possible. Therefore, consumer’s willingness to pay amount for safe drinking water is quite low and not according to the demand. Moreover, while stating their willingness to pay consumer is influenced by the rate decided by the BMC and not by their utility considerations. Therefore, the mindset of the people should be changed towards urban services provided by the urban local bodies and charges for various services should be determined purely on economic grounds.

REFERENCES:

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2. Guha S.Valuation of clean water supply by willingness to pay method in a developing nation: a case study in Calcutta, India. Journal of Young Investigation. 17(4);2007

3. Ramachandraiah C. Drinking water as a fundamental right.Economic and Political Weekly. Feb. 24;2001:619-621.

4. Shaban, Abdul and Sharma. Water consumption pattern in domestic households in major Indian cities. Economic and Political Weekly, June 9;2007:2190-2197.

5. Govt. of India. Tenth Five Year Plan 2002-2007. Vol II;2002: Planning Commission, New Delhi.

Received on 28.06.2018 Modified on 14.07.2018

Res. J. Humanities and Social Sciences. 2018; 9(4): 729-736.

DOI: 10.5958/2321-5828.2018.00122.5