Delhi increases water tariffs by 50 per cent

Delhi’s water utility has increased water tariffs by 50% in attempt to move towards cost recovery. Whereas the old system provided 6m3/month free and charged up to INR10/m3 ($0.21/m3) for usage over 40m3/month, the first 6m3 now costs INR2/m3 ($0.04/m3), with usage over 30m3 costing INR2-25/m3 ($0.04-$0.54/m3). “Our cost of producing water is now up to INR20/m3 ($0.43/m3). Thus an increase in tariffs was inevitable” SC Gupta, a senior official, told GWI.

The move will encourage other Indian cities which are trying to introduce more realistic pricing models to break the cycle of political interference, commercial losses and under-investment. Bangalore’s utility proposed an 11% rise in February due to increased power costs, while Shimla is proposing a 40% increase in 2011. The results up till now have been mixed – in 2009 a rise was refused in Mumbai, while Calcutta was able to raise tariffs by just INR2/m3 ($0.04/m3).