International Water Management Institute - Using Water Management To Reduce Poverty

Using Water Management To Reduce Poverty

IWM's work in Gujarat, India, exemplifies how improving water management can have an influence on peoples' livelihoods. The state faced the dual problem of bankrupt electricity utilities and depleted groundwater storage following the introduction of electricity subsidies to farmers from around 1970. The situation arose because the subsidies enabled farmers to easily pump groundwater from ever-increasing depths. The Asian Development Bank and World Bank both indicated that governments should cut the electricity subsidies and charge farmers based on metered consumption of power. However, when some state governments tried to do so, the farmers formed such powerful lobbies that several chief ministers lost their seats. A different solution was clearly required.

IWMI scientists who studied the problem suggested governments should introduce ‘intelligent rationing’ of farm power supply by separating the power cables carrying electricity to farmers from those supplying other rural users, such as domestic households and industries. They should then provide farmers with a high-quality power supply for a set number of hours each day at a price they could afford. Eventually Gujarat decided to include these recommendations in a larger programme to reform the electricity utility. A study conducted afterwards found its impacts to be much greater than anticipated. Prior to the change, tube-well owners had been holding rural communities to ransom by ‘stealing’ power for irrigation. After the cables were separated, rural households, schools and industries had a much higher-quality power supply, which in turn greatly boosted individuals’ well-being.