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The Hindu : For long, economists have held the view that getting the prices right is crucial to the sustainable delivery of piped water to households in urban areas.For the customer, the correct price of water ensures access to clean water and also signals that excess consumption has a penalty and therefore he is dissuaded from over- consumption.For the institution it means the ability to maintain the system for efficient delivery of water as well as to be able to invest for expansion of services.Increasing block tariffMany cities charge for water and include it as part of the property tax. This is a very indirect way of recovering revenue. Others charge a flat rate based on the dimension of the connecting pipe to the household, say, for example Rs. 45 per month for a 3/4inch pipe connection and Rs. 30 a month for a half-inch pipe connection. This too is an arbitrary method of collecting water revenues.There is increasing consensus however that an increasing block tariff makes the most sense. This is what cities such as Bangalore and Hyderabad use for their water charges.Bangalore’s domestic tariff for water looks like this:0-8,000 litres — Rs. 6 per kilo litre8,001-25,000 litres — Rs. 9 per kilo litre25,001-50,000 litres — Rs. 15 per kilo litre50,001- 75,000 litres — Rs. 30 per kilo litreThere is a separate charge for non-domestic consumption on an increasing block tariff too and for industrial consumption on a flat basis.These utilities try to provide access to basic water requirement at affordable prices but ask heavier consumers to pay more. The non-domestic and industrial connections actually cross-subsidise the domestic consumers, bringing in an element of social justice.MeteringFor historical reasons and thanks to far-sighted decision makers, Bangalore has had an effective metering system almost since water supply started from Thippagondanahalli reservoir in 1932 and therefore is able to levy an effective volumetric charge. Without metering and a system of…More