Home Political science The tools of policy formulation
The Execution of the Participatory Tool
The process of policy formulation started on a positive note due to concrete efforts put in to designing of the tool (as set out in the ToR). However, the implementation did not progress as per the provisions of the ToR. The analysis of adherence to the ToR suggested that almost 53 per cent of its provisions were not adhered to (Prayas 2009). For example, the 'Conduct of Business Regulations' were not prepared before initiating the consultation process. This important aspect of procedural commitment was ignored. The approach paper published for consultation was initially available only in English. After several objections by civil society organizations a short summary of the 300 page approach paper was prepared in the local language by the IRA. However, this summary was highly inadequate in conveying all the important aspects of the policy proposal. The civil society organizations then voluntarily prepared a small booklet on the proposal and disseminated widely among farmers and other marginalized communities.
Four stakeholder consultation meetings on the approach paper were announced by MWRRA. The policy proposed in the approach was found to be substantively inadequate by the civil society groups. A group of stakeholders comprising experts, NGOs and farmer organizations came together as a loosely held coalition of civil society actors (hereafter referred as the coalition). The coalition provided a policy option in the form of 'equity' and 'rights-based' approach to tariff determination. They emphasized criteria of 'minimum tariff for water required for life and livelihood' (so-called 'lifeline and livelihood tariff) and overall adherence to the principle of 'affordability'. Contrary to this demand for a 'social tariff approach, the proposal prepared by the consultant was largely based on the principle of rationalizing tariffs based on economic principles such as reduction of cross-subsidy.
The methodology suggested by the consultant for assessing tariff options and determination of final tariffs was based on the task of assigning weights. A set of criteria were identified for apportioning costs between irrigation, industrial and domestic water users. Weights have to be assigned to these three water user categories under each criterion. However, the assignment of weight was based on the subjective judgement of the final decision maker. This cost-apportionment matrix was found to be highly objectionable by the coalition as it would provide a high level of discretion to the regulator to adjust the weights according to its subjective judgement, to arrive at a tariff. This type of design, based on subjectively arrived-at weightings, requires adequate procedures to seek preferences on weights from all concerned stakeholders in an open and transparent environment. There was no such procedure designed in the tool, leaving space for the vested interests to creep into its execution and influence the outcome. This was evident from the proposal for cross-subsidy reduction put forward by the consultant. The coalition considered the approach paper to be biased towards industry because it proposed a reduction of the prevailing tariff burden on industries and an increase of the same on agriculture. This was the outcome of particular weights assumed by the consultant in the cost-apportionment matrix. The influence of the industrial stakeholders was evident.
The method of subjective weights would mean that the weaker stakeholders would suffer if they do not get organized and raise their voice. The coalition of civil society actors played an important role in this regard. The coalition held a meeting with the IRA and recommended complete revision of the approach before initiating any further policy formulation process. It was also brought to the attention of the regulator that the four consultation meetings were inadequate for proper representation of the vast number of farmers across the state. The regulator was reluctant to accept the demand for complete revision in the approach paper but agreed to increase the number of consultation meetings from four to a total of nine. This provided an opportunity to the coalition and individual farmers to raise their voices and demand alternative 'equitable' and 'rights-based' options for tariff determination.
The nine consultation meetings provided an opportunity for open sharing, criticism and recommendation of alternative options. The regulator played a neutral role and avoided giving any judgements on the approach paper prepared by the consultant. There was no priority given to elected political leaders. This neutral position helped in facilitating open discussions in the consultation meetings and made it possible to raise several alternatives for determining water tariffs.
After this first round of consultation meetings the regulator initiated the process of revising the approach paper. The alternative options suggested in the consultation meetings were assessed in this process. But it was a totally closed-door process, with no opportunity for stakeholders to engage in the assessment of the options or revise the approach paper. The regulator prepared a short report on assessment of various options, including a summary of some of the main comments and suggestions received from stakeholders. Here, the regulator recorded its assessment of various comments and options suggested in consultations. It included a brief justification of why certain options were worth considering and including while others were not.
The revised approach paper came out with new criteria based on the various social considerations suggested by participants in the first round of consultations. This was a positive development for the coalition. The implicit policy of reduction of cross-subsidy adopted in the first approach paper was abandoned in the revised approach paper by altering the weights in the cost-apportionment matrix. But the methodology based on subjective assignment of weights remained untouched. Objective criteria were suggested by stakeholders but not considered in the revised approach paper. Hence, a concern was raised on the possibility of alteration of weights in the future and thereby resurfacing of the cross-subsidy reduction strategy. The proposal for an equitable and rights-based approach to tariff-setting based on criteria of 'lifeline and livelihood tariff was not accepted.
The revised approach paper was again published for consultation. But this time the regulator decided to have only one state-level consultation meeting. This was considered inadequate by the stakeholder groups. The state-level consultation meeting was organized in the form of a panel session to be followed by open discussions. The coalition made a demand for increasing the scope of consultation on the revised approach by conducting more meetings on the revised approach paper. However, there was no response from the regulator. Seeing that the regulator was not giving any attention to their demand, the group stalled the proceedings of the panel session, bringing the meeting to a standstill for some time, until the regulator agreed to hold regional consultation meetings at six more places in the state. This enhanced the scope of the consultative process and allowed larger numbers of participants to engage and provide alternative options for tariff determination. The regulations were finalized after this round of consultations. This event throws light on the need for providing space for negotiation even within the autonomous regulatory setting.
The Policy Outcomes of Tariff Regulations
The outcome of the participatory tool can be seen by comparing the initial draft approach paper with the final regulations for tariff determination. Considerable changes were made in the final regulations based on the comments and suggestions given in the participatory process. Concessions on water tariffs were awarded to various disadvantaged sections such as tribal communities (indigenous people), small and marginal farmers, and people affected by dam projects. The rights-based approach in the form of the 'lifeline and livelihood tariff was not accepted.
An important aspect of regulation in a utility sector like water is the 'financial regulation' of projects and services. This pertains to regulation of the capital and other costs along with its effective use in creation and maintenance of capital assets. Ineffective regulations in this area have been responsible for various malpractices, irregularities and corruption in construction works. Recommendations were made several times in this regard by the coalition but were ignored by the IRA. This shows the influence of the vested interests associated with financial aspects of projects even in an autonomous policy venue such as an IRA.
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