Lessons for India : Australia's water sector reforms

A pragmatic assessment of urban water sector reform options in India has to take place in a context where assets remain in the public sector and where the private sector is likely to play only a very limited role. As in India, under the Australian Constitution, the provision of water is the responsibility of the state and territory governments. Two characteristics of the Australian sector reform experience are of particular interest in the Indian context.
One, that various jurisdictions have adopted different approaches to achieving a common vision and reform objective; and two, that reforms have taken place without any significant change in the public sector's dominant role in the sector. This is relevant in view of India's federal structure and the fact that water and sanitation are state subjects in India. On this, the Australian experience provides an excellent example of how an agreed set of outcomes can be achieved through a variety of approaches.
This note summarises some of the key developments in the Australian sector, with the objective of identifying aspects of the reform approach and its outcomes that are relevant for India. It describes the genesis of the reform and reform agenda, analyses the market structure, the institutional models, the role of the private sector, and the regulatory regimes. It provides a summary of the tariff structures and levels and focuses on the approaches to achieving and sustaining efficiency.
The paper concludes with a summary of the lessons for India and identifies areas for further research.