Issues in water rights, institutional design and pricing that need resolution

Abstract

In this paper the core issues that need resolution before water development especially by the private sector, and efficient usage can happen are very briefly outlined. These are Water rights have to be defined more functionally to include tradability. There is a need to move away from price based subsidies in electricity for irrigation and in irrigation water, to endowment based subsidies where these endowments can be traded. Administrative and organizational reform of parastatals in water, is most vital. The starting point of the same would be to grant operational autonomy and empower the leadership of water development departments. Creating institutionalized rules to overlay endowments and rights in cooperative water systems that can put free these organisations from the free-rider problem to lead to efficient management of water and to the enhancement of its generation. A strategic shift to more storage especially in the Deccan and its extensions, and to counter opposition from the post-modernist NGOs both within and outside the country by having excellent policies and actions to manage displacement and rehabilitation would also be necessary. River training for storage, canals, and recreation and navigation along with urban renewal can be an important way to finance vast infrastructure to develop cities and add to water resources as well.