Charting the Course of Water Sector Reforms in India

India holds roughly 18% of the world’s population but only about 4% of its freshwater resources. That gap between demand and availability is not new – but the urgency to close it certainly is. Over the past three decades, India has been navigating a significant transition in how it manages water: moving away from centralised, state-controlled supply systems toward a mix of decentralisation, private sector participation, and community-driven governance. Understanding these reforms – what they aim for, how they work, and who they leave behind – is essential for anyone studying water rights and rural governance in India.

The crisis that triggered reform 🔗

For most of India’s post-independence era, water was treated almost entirely as a state responsibility. The government built dams, managed irrigation canals, and ran urban water boards. But by the late 1980s, the cracks were impossible to ignore. Irrigation infrastructure was underperforming, urban water utilities were financially weak, and groundwater was being extracted far faster than it could be recharged.

India’s per capita water availability has fallen below 1,600 cubic metres per year – dangerously close to the internationally recognised threshold of water stress. In drought-prone zones of Rajasthan, Gujarat, and Maharashtra, availability drops to as low as 500 cubic metres per year, signalling absolute scarcity. River pollution, unchecked industrial discharge, and poor maintenance of existing irrigation networks compounded the problem further.

Three interconnected challenges defined the crisis: water scarcity driven by uneven distribution and over-extraction; pollution from untreated sewage and industrial effluents; and management inefficiency – an over-reliance on engineering-heavy infrastructure without corresponding attention to operations, maintenance, or equity.

The evolution of India’s national water policy 🔗

India’s formal approach to water governance has gone through three major phases of policy-making: 1987, 2002, and 2012. Each revision reflected the pressures of its time.

National Water Policy 1987 🔗

The National Water Policy (NWP) of 1987 was India’s first comprehensive attempt to set a framework for water management. It emphasised universal access to drinking water and expanding irrigation – largely through state-led infrastructure. While it laid an important foundation, it had little to say about demand management, private participation, or local governance. Implementation was weak, and inter-state cooperation remained elusive.

National Water Policy 2002 🔗

The 2002 revision marked a real shift. Influenced by India’s broader economic liberalisation after 1991, the NWP 2002 began treating water as an economic good rather than just a public entitlement. It explicitly encouraged private sector participation in water supply and management. Article 13 of the policy stated that private involvement should be encouraged “wherever feasible” – a phrase that opened the door to a wave of privatisation experiments in the following decade. The policy also pushed for decentralisation and participatory approaches, though without firm institutional structures to back them up.

National Water Policy 2012 🔗

The NWP 2012 went considerably further. It introduced the Public Trust Doctrine into national water policy for the first time – the principle that water is a community resource held in trust by the state, not a commodity that can be owned or privatised outright. The policy called for integrated water resource management (IWRM), recognised the ecological needs of rivers, called for the amendment of the Indian Easements Act 1882 (which gave landowners proprietary rights over groundwater beneath their land), and pushed for a national water framework law. It also included private sector participation as a legitimate option for water services delivery – a position that has remained contentious.

The push for privatisation: what happened in practice 🔗

The theory behind water privatisation rests on a straightforward premise: private operators, driven by commercial incentives, will manage water systems more efficiently than government agencies plagued by bureaucracy and underinvestment. Global institutions like the World Bank and the Asian Development Bank actively promoted this model and funded India’s water sector restructuring projects with this orientation through the 1990s and 2000s.

In practice, the results were far more complicated. Cities like Nagpur, Tiruppur, Hubli-Dharwad, Patna, and Dewas saw water supply handed over or proposed to private operators. The conditionalities that came with privatisation included mandatory household metering, automatic tariff hikes of around 10% every one to three years, prohibition on using local water sources, and control by private companies over domestic water supply. Critically, many of these contracts focused heavily on cost recovery and financial targets while giving little attention to improving service quality, coverage, or accessibility for the poor.

Public resistance was significant. In Delhi, Mumbai, Bangalore, Latur, and Mysore, privatisation attempts were halted or rolled back in the face of strong community opposition. Mysore (Karnataka) and Latur (Maharashtra) formally reversed their privatisation processes after state-appointed committees issued scathing assessments of how the projects had performed. The pattern revealed something important: water privatisation in India has rarely delivered on its promises of efficiency, and has frequently deepened inequities, particularly for marginalised and low-income communities who cannot afford rising tariffs.

The paradox of decentralisation and centralisation 🔗

Alongside privatisation, decentralisation became the other dominant reform principle. The 73rd Constitutional Amendment of 1992 strengthened Panchayati Raj institutions and created a formal basis for devolving functions – including water supply – to local bodies. In the water sector, this took the form of Water Users’ Associations (WUAs) for irrigation and Village Water and Sanitation Committees (VWSCs) for drinking water.

However, scholars like Leela Fernandes have pointed out a significant paradox: the rhetoric of decentralisation has often produced new forms of centralised state control. Frameworks designed to push decision-making down to local bodies have simultaneously created new regulatory and bureaucratic structures at the state or central level. Local governments – particularly in rural areas – frequently lack the institutional capacity, financial resources, and technical expertise to actually manage water systems independently. The devolution of responsibility has not always come with a devolution of resources.

Reforms in irrigation: participatory management and its limits 🔗

In the irrigation sector, reforms have focused on shifting from purely bureaucratic canal management to Participatory Irrigation Management (PIM). The idea is that farmers who actually use the water should have a say – and some responsibility – in managing local irrigation infrastructure. Water Users’ Associations have been formed across states like Maharashtra, Madhya Pradesh, Andhra Pradesh, and Gujarat to manage distributory canals, collect water charges, and coordinate among farmers.

The results have been mixed. Neoliberal tendencies embedded in water policy pushed cost recovery to the forefront of irrigation projects, meaning water pricing and user charges became central concerns. This can work well when farmers are organised and well-resourced. But in areas with fragmented land holdings, caste-based power hierarchies, or poor infrastructure, WUAs have often struggled. The gap between irrigation potential created and irrigation potential actually utilised remains a persistent problem in Indian water management.

Several state governments – including Maharashtra, Madhya Pradesh, Gujarat, and Karnataka – have enacted legislation to set up independent Water Regulatory Authorities empowered to assess and allocate water resources and set tariffs. While this is a step toward structured governance, critics point out that these authorities have tended to prioritise financial aspects over equitable access and service quality improvements for small farmers and rural communities.

Recent programmes: Jal Jeevan Mission and decentralised delivery 🔗

The most significant recent programme in rural water supply is the Jal Jeevan Mission (JJM), launched in August 2019 with the goal of providing a functional household tap connection (FHTC) – the Har Ghar Jal vision – to every rural household. As of late 2025, over 15.72 crore rural households have tap water connections, covering more than 81% of rural homes – a dramatic rise from just 16.71% at the mission’s launch.

What makes JJM notable from a governance perspective is its emphasis on community ownership. Gram Panchayats and their sub-committees – VWSCs, Paani Samitis, and User Groups – are formally responsible for planning, implementing, operating, and maintaining in-village water supply infrastructure. Village Action Plans (VAPs), approved by the Gram Sabha, serve as the primary planning documents. This is decentralisation in a fairly concrete form: water governance decisions are being anchored at the village level, with local women trained to conduct water quality testing using Field Testing Kits in over five lakh villages.

That said, JJM also faces real challenges. Only about 62% of households with tap connections receive regular and safe water supply year-round, raising questions about infrastructure sustainability and source durability beyond the initial installation phase. In many states, planning has been supply-driven rather than genuinely community-led, and integration between water supply infrastructure and community needs remains inconsistent.

What reforms mean for equity and sustainability 🔗

Across both privatisation and decentralisation debates, two concerns keep resurfacing: equity and sustainability.

On equity: water reforms that prioritise cost recovery and financial viability tend to work best for those who can already pay. Marginalised communities, small and tenant farmers, and people in water-scarce rural areas are consistently at risk of being left out – or pushed out – of reformed water systems. Women, smallholder farmers, and marginalised groups remain disproportionately affected by water scarcity, yet they are often least represented in the governance structures that reforms create.

On sustainability: the NWP 2012’s limitations included over-optimistic estimates of water availability, inadequate creation of river basin agencies, and intractable inter-state disputes that were never satisfactorily resolved. Groundwater, which supports drinking water for nearly 80% of rural households, continues to be over-extracted in states like Punjab, Rajasthan, and Haryana. Policies have been slow to address this structural fragility.

The larger picture, as Leela Fernandes argues in her analysis of Indian water governance, is that reforms have not simply replaced state control with decentralised or private management. Instead, they have remade state power – recentralising authority in new forms even while rhetorically championing decentralisation. This insight is critical for understanding why water reforms in India so often produce outcomes that diverge sharply from their stated intentions.

Where do we go from here? 🔗

India’s water sector reforms are not a finished project – they are an ongoing negotiation between different visions of what water is and who it belongs to. Is it a public good, a community resource, an economic commodity, or a human right? The answer shapes everything: who manages it, who pays for it, who gets it when there is not enough, and who is held accountable when systems fail.

As India considers a new National Water Policy to replace the 2012 framework, the pressure is to align water governance with climate resilience, the UN Sustainable Development Goals, and the lived realities of communities that have been bypassed by decades of reform. The technical solutions – drip irrigation, smart metering, river interlinking, IoT-based monitoring – matter. But so do the institutional and legal structures that determine who holds power over water decisions at every level from the river basin to the village pump.

What do you think? When water is treated as an economic good and priced to recover costs, does that make its management more efficient – or does it fundamentally undermine the right of every person to access it? And in a country as diverse as India, can a single national water framework ever adequately address the needs of both a drought-affected farmer in Marathwada and a flood-prone community in Assam?

References

1. https://en.wikipedia.org/wiki/Indian_water_policy
2. https://www.indiawaterportal.org/governance-and-policy/indias-water-policy-between-scarcity-reform-and-a-sustainable-future
3. https://www.nextias.com/blog/water-policies-in-india/
4. https://ebooks.inflibnet.ac.in/esp13/chapter/national-water-policy-2012/
5. https://uw.manifoldapp.org/read/governing-water-in-india/section/bcd51a79-661f-4ebc-b5af-387a180bc00e
6. https://www.cag.org.in/blogs/privatisation-and-commercialisation-water-india
7. https://uw.manifoldapp.org/read/governing-water-in-india/section/2d23fab3-c60a-47e8-a705-d9d189e324a1
8. https://www.researchgate.net/publication/227468092_Water_Law_Poverty_and_Development_-_Water_Law_Reforms_in_India
9. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2098651
10. https://jaljeevanmission.gov.in/infrastructure
11. https://www.impriindia.com/insights/jal-jeevan-mission-2019-transforming-rural-water-access-in-india/
12. https://www.indiawaterportal.org/faqs/water-policies-india-past-and-present
13. https://uwapress.uw.edu/book/9780295750439/governing-water-in-india/