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Key issues in water allocation policy

India's dams are a vital source of water due to the seasonal (monsoon) pattern of rainfall. In line with the official policy of central government, water for industrial use has been accorded lower priority than domestic and agricultural use (Government of India 1987; 2002). This was in line with the policy to protect and promote agro-based livelihoods for rural prosperity and sustainability. Policies were implicitly shaped by the notion of water as a 'social good'. However, the increasing international discourse around water as an 'economic good' started having its influence on water policy in India. Thus, water for the high income-generating activities associated with urban-industrial growth came to be seen as important for realizing the greater economic value of water. Thus, the Government of Maharashtra, in contradiction of central government policy, proposed that industry should be given higher priority than agriculture for water allocation.

The World Bank prescription was to assign water rights to users in the form of 'tradable entitlements'. It was claimed that the farmers could voluntarily transfer the water entitlements to industries at an acceptable compensation determined by the market. This was seen as an 'equitable' policy for water allocation (World Bank 2005). It is interesting to see the use of tools in the formulation of these policy proposals and how it impacted the fate of these policies.

Tool design for water allocation policy

The use of participatory tools for the formulation of the SWP and MWRRA Act was not mandatory by any law. Tool design and execution were solely a matter for the WRD. In light of the radical changes that the reforms were attempting, it was expected that the participatory tool would be designed meticulously with adequate provision of transparency, accountability and effective participation. But in reality, the design of the participatory tool was not undertaken systematically.

Consultation workshops - one at the state level and three at the lower regional level - were organized. These were severely inadequate for representation let alone direct participation of the vast majority of the rural populations that would be affected by the reforms. There was no consideration given to adequate publicity for the consultation events and related documents. Nor was a mechanism decided for publishing a 'reasoned report' that would compile all the policy options suggested by the participants in the consultations and provide assessment and considerations given by government for each of the options.

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