Trends and Outlook

Government programmes provide the necessary impetus

Urban India is growing fast and during the decade 2001-11, urban population grew faster than the country’s overall population. Improving the quality of services has thus become a key focus area for urban local bodies (ULBs) today.

The existing level of water supply and sewerage services, however, is characterised by poor coverage, high non-revenue water, obsolete pipeline networks, inadequate treatment capacity, etc. User charges are low and so is the collection efficiency. Waste management practices in most cities too are characterised by the absence of door-to-door collection, inadequate transportation infrastructure, unscientific waste disposal and inadequate treatment capacity.

Given the state of the sector, the government is taking several steps to improve the country’s water supply and waste management infrastructure. Schemes such as the Smart Cities Mission for the development of 100 smart cities, the Atal Mission for Rejuvenation and Urban Transformation (AMRUT), the Swachh Bharat Mission (SBM) and the National Mission for Clean Ganga (NMCG) have been designed to help scale up capacities. Over the course of the past two years or so, these schemes have moved forward from the approval stage, with the announcement of projects to be executed and the release of funds for project implementation. Over the past few years, there has been a significant increase in the number of approved projects, the creation of infrastructure, the uptake of new initiatives to deploy advanced IT solutions, etc.

Indian Infrastructure presents a snapshot of recent trends and outlook for the sector…

Key trends

  • The rapidly rising urban population has put tremendous pressure on water supply and waste management services. According to the Central Pollution Control Board, total water supply in Class I (population of 100,000 and above) and Class II (population between 50,000 and 100,000) cities was estimated at 85,250 million litres per day (mld) in 2016. The level of sewage generation in these areas was estimated at 68,200 mld. Against this, the current sewage treatment capacity stands at 23,760 mld. Further, India produces over 151,816 tonnes per day (tpd) of solid waste. Of this, only 23 per cent is processed.
  • Recently, there have been some visible improvements in terms of both infrastructure creation and service delivery in the water supply and sanitation segments. Over 565 mld of additional treatment capacity has been created in the past year under various projects and schemes – 245 mld for water treatment and over 320 mld for sewage treatment. In addition, at least 3,150 tpd of new solid waste treatment capacity has been added across the country. Besides, projects involving a combined treatment capacity of 4,150 mld have either been approved or are planned to be taken up in the near future.
  • The sector is also receiving increased interest from the government. Under the AMRUT scheme, until February 2017, the Ministry of Urban Development had approved state annual action plans worth Rs 569 billion, and a total of 2,959 AMRUT projects were under various stages of implementation. A total of 90 cities have been selected for development under the Smart Cities Mission and have a proposed investment requirement of Rs 1.2 trillion. Further, under the SBM, during October 2014-July 2017, close to 3.77 million individual and community toilets have been constructed. Further, from 2011-12 to 2016-17, Rs 43 billion has been released by the central government for the NMCG.
  • The pace of technology adoption has also improved. Water utilities are deploying advanced technologies and solutions like supervisory control and data acquisition, digital mapping, leakage detection systems and mobile governance to improve service delivery. In the water and wastewater treatment segment as well, new technologies are being adopted. Further, ULBs are also using IT systems and solutions for various aspects of waste management, including collection, transportation, treatment, disposal, asset mapping, network management and customer service.

Sector outlook

  • The growth trend for urban population is expected to continue, and its share is set to increase to over 40 per cent of the total population by 2031 (600 million). India Infrastructure Research estimates the water demand and sewage generation to increase to 124,815 mld and 99,850 mld respectively by 2020-21. Waste generation is expected to increase to 290,410 tpd by then.
  • Given the current infrastructure backlog, the investment requirements for the sector are huge. As per the High Powered Expert Committee Report on Urban Infrastructure and Services, at 2009-10 prices, long-term investment requirements (till 2031) for the water and waste sector are estimated at about Rs 18 trillion. Most of these investments will be required for the upgradation and augmentation of infrastructure.
  • Overall, the water and waste sector has a positive outlook and offers huge opportunities for all stakeholders. A large number of water and waste projects have been approved and many more are on the cards. The success of these projects, however, will depend on project structuring, political support, credible and updated data systems, revenue streams and the financial health of ULBs.


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