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Know Your Regulator: Special Edition on Water Authorities in Maharashtra and Punjab

Briefing Note: The Maharashtra Water Resources Regulatory Authority (MWRRA) and the Punjab Water Regulation and Development Authority (PWRDA)

Setting the context for regulating water

The Maharashtra Water Resources Regulatory Authority (MWRRA) is the first independent statutory regulatory authority in the water sector in India. The MWRRA Act was enacted in the year 2005 and the Authority was established in the same year. The creation of MWRRA marked a significant shift in how water resources were managed in the state. Following the establishment of MWRRA, a number of states including Arunachal Pradesh, Uttar Pradesh, Kerala, and Gujarat enacted laws for the establishment of independent water regulators. The operationalisation of these state regulators, however, has been slow. Recently, the state of Punjab constituted the Punjab Water Regulation and Development Authority (PWRDA) under the Punjab Water Resources (Regulation and Management) Act of 2020. PWRDA is the newest addition to the club of state-level water regulatory authorities in India.

In India’s federal organisation of powers relating to water, it is a State subject (Entry 17 of the State list) in the Constitution of India, subject to the powers of the Centre under Entry 56 (regulation and development of interstate rivers) of the Union list. Largely, the narrative around water governance is dominated by the constitutional provisions related to inter-state water disputes and their resolution under Article 262. However, the focus of State-level water regulatory authorities is on intra-state management, and on ensuring efficient, equitable and sustainable use of available resources within the State.

Water stress puts lives and livelihoods at risk. Limited avenues of water supply coupled with an ever-increasing demand place India amongst countries with ‘extremely high’ levels of baseline water stress.[1] Ground water is severely over-drawn leading to its depletion throughout the country. Surface water in the form of rivers, lakes and streams is also under stress. Although water scarcity is a huge concern, India’s water resource challenges also extend to the quality of available water resources. The Composite Water Management Index of the NITI Aayog confirms that only around 28 per cent of India’s water resources is utilisable.[2] Due to such conditions of stress, inter-state contestations for water, related to, both, water share and quality are surfacing often.

Prolonged water stress can adversely impact public health and economic development. The country’s approach towards Water Resource Management (WRM) assumes great significance in this context. Undoubtedly, prevalent water stress and risks are an outcome of the WRM strategies pursued so far. India’s approach to WRM has essentially relied on the paradigm of supply augmentation.[3] As such, public irrigation development remained the focus. This approach is fraught with its own set of issues – outcomes included regional inequities in irrigation development, and less than desirable results from significant public investments in construction of dams and physical works. Simultaneously, private investments in ground water irrigation increased.

Scope and Design of Water Regulation in Maharashtra and Punjab

MWRRA and PWRDA are statutorily tasked with managing and regulating water resources in their respective states. The Authorities are expected to ensure the ‘judicious, equitable and sustainable’ utilisation of water resources. A significant difference between the two State Authorities is that while groundwater management falls under the purview of the Punjab Authority, the Maharashtra Authority’s role in relation to groundwater is limited. A separate statute, namely, the Maharashtra Groundwater (Development and Management) Act, 2009 lays down the framework to manage and regulate groundwater in the state. This statute also establishes a State Groundwater Authority and District Level Authorities to implement statutory provisions.

The MWRRA Act focusses principally on the management of water from the state’s irrigation projects: there are five such major projects run by Irrigation Development Corporations, which are referred to as ‘River Basin Agencies’ in the Act. The Act covers these River Basin Agencies and ‘water entities’, which include individual water users, water user associations et cetera. It envisages a multi-level structure for determining water use, which includes allocations between ‘categories of use’ (such as agricultural, industrial, drinking water etc.), and ‘entitlements’ for water users from irrigation projects. Following recent amendments in the Act, allocations between categories of use are determined by the State Cabinet and are applicable uniformly to all the River Basin Agencies in the State. The role of the Maharashtra Authority is to make regulations which set out criteria for issuance of entitlements, priority of water distribution during periods of scarcity, and to ensure equitable distribution at all levels of irrigation management. River Basin Agencies issue entitlements to water users on the basis of these regulations.

The Maharashtra Authority is required to make regulations for setting up a water tariff system based on the principle of full cost recovery of operation and maintenance charges. The Authority has the power to adjudicate disputes between River Basin Agencies and water users. In addition, the Authority has a range of executive functions, including to administer, monitor, enforce and supervise its orders, directions and regulations, and to review and clear water resources projects proposed at the sub- basin and river basin level.

Groundwater is one of the main focus areas of the PWRDA Act. The Punjab Authority has control over groundwater extraction installations, to approve the setting up of new ones, and to set conditions and restrict the use of existing installations. Users drawing groundwater are required to register their structures with the Authority. In terms of the Act, extraction of groundwater for drinking water use is exempt from these restrictions and control. Further, under the draft guidelines issued by the Authority, extraction for domestic and agricultural use is also presently exempt from restrictions and control.

The PWRDA Act also provides for setting of tariffs for water supplied to industrial, and commercial users. In this role, it covers all ‘entities’, including any person or organisation or authority, and including local bodies, boards, government corporations and departments that supply water for industrial and commercial use. Charges for supply of water for drinking, domestic and agricultural use by these entities are however outside the purview of the Authority and are meant to be as per policy set by the State Government.

The Punjab Authority can also issue directions for the optimal use of surface water, and provide advice to the State Government in relation to canals and surface water, but it has relatively little direct influence at present in relation to surface water. The Authority also has power to administer, monitor, implement and supervise its regulations, directions and orders.

Both state laws provide for Integrated State Water Management Plans, to be made by the State Water Board (in the case of Maharashtra) and the State Government (in the case of Punjab), and in both cases to be approved by councils headed by the Chief Minister. The powers and functions of respective Authorities are meant to be exercised in conformity with these Plans. They also provide for considerable influence of their respective State Governments over the affairs of the Authority, including to approve regulations and to issue directions. The State Governments also have influence in financial and operational matters.

Both authorities are headed by a Chairperson. While MWRRA requires 4 expert members, PWRDA requires 2. In addition, the former engages 5 special invitees (one from each river basin agency) of which at least one should be a woman. The latter has an advisory committee comprising the chairperson and 5 experts.

Issues and Challenges

Economic transitions, and the shift to privatization has been commonly seen as the rationale for setting up regulatory agencies, such as for electricity, telecoms and pensions. In other cases, regulatory authorities have been set up to establish standards, norms and terms of engagement for businesses, such as in real estate, food and for financial products. The case of water authorities does not follow these trends. Large scale privatization of water resources is absent in India, and not envisaged in the foreseeable future. The problems of the sector are the sequencing of policy and institutional reforms, and perhaps the depoliticization of this reform process.[4] However, while overcoming political uncertainty was the rationale for the setting up of water authorities, there is still a considerable role for state governments in the affairs of the regulatory authorities.

Moreover, reforms envisaged for the water sector are complex and politically difficult. There are strong equity and developmental considerations, and strong interests around existing allocations and use. Ironically, much of the existing practice relating to irrigation and water use in the states has been set up through government subsidy and support. The Maharashtra law is quite ambitious in that it takes agricultural use into its ambit. In Punjab, on the other hand, groundwater is a much more salient issue, and presently the State Government has only limited influence over its extraction and use. The law therefore is quite ambitious in that it seeks to establish state control over groundwater, although at the moment this extends only to industrial and commercial extraction. Long-term outcomes are however likely to be dependent on how states and regulators are able to work together to facilitate stable transitions.

[1] World Resources Institute, Aqueduct Water Risk Atlas (2019), URL: https://www.wri.org/insights/17-countries-home-one-quarter-worlds-population-face-extremely-high-water-stress

[2] NITI Aayog, Water, Background and Rationale, URL: http://social.niti.gov.in/water-index

[3] Chokkakula, S., Kapur, A., Singh, A. (2021), Water and Federalism: Working with states for water security, TREADS working paper, Centre for Policy Research, New Delhi.

[4] Sachin Warghade, “Independent Regulatory Agencies in Water Sector in India: Debate and Discourse”, Indian Water Policy at the Crossroads: Resources, Technology and Reforms 93-100 (Vishal Narain et al., eds., 2016).