The Debate over Municipal Water Pricing: Evidence from Kolkata,India

Steps to rationalize the municipal water pricing system have raised various debates in Kolkata, India. The primary point of debate is whether the age-old direct subsidy to a water system benefiting all users should continue or a volumetric charge on water usage should be imposed. Apart from this, issues such as a transitional phase pricing strategy, specific tariff structure, support for the poor and management options are widely debated by those that favour rationalization. The present paper examines the behaviour of 500 households of Kolkata, India, and uses the information to resolve the issues of contention. It is estimated that a uniform volumetric charge of Rs. 4 per kilolitre can be imposed in the phase of transition.