Budget 2015-16: Water and its due share

Understandably, dependence of life and livelihood on water in Bangladesh cannot be overstated. In one aspect, physical availability and accessibility of water, in both quantitative and qualitative terms, are regarded as basic human rights. The newly introduced United Nations System of Environmental-Economic Accounting (SEEA) introduces an integrated tool for valuation of water and aquatic resources in national income accounting away from the traditional discourse of natural resource economics. Thus, value of water goes beyond the traditional notion of 'service' in the traditional system of national account (SNA), placed with a number in 'value added' when provided publicly and 'privately' (as bottled item).
  Since 2005-06, contribution of water, including in industry, has been hovering at 0.08 per cent with an exception of 2011-12 when its share was a bit up at 0.09 per cent. Demand for quality water in every sector rises as economy advances along the development path.
 Bangladesh did not have any water policy in almost three decades since independence until 1999. According to contemporary discourse, availability, accessibility, sufficiency, equity and quality are the five major pillars of the right to water. Also, access to quality water in adequate amount by the marginalised and disadvantaged groups is expected to receive priority in policy and use of public resources. Apart from managing floods and droughts, ensuring availability of quality water is a considerable challenge for meeting the demands of rising population and economic development. Another challenge is to manage the possibility of deepening water conflicts among different user groups. Domestically, less awareness about the scarcity of water and its economic value leads to mismanagement, wastage and pollution, and reduction of flows below the bare minimum ecological needs. These aspects of water came for the first time in the National Water Policy in 1999.
Private users of water have emerged as principal agents for its development and management.  However, water resource development entails large investment followed by massive economic gains. This hefty investment is hardly possible from private sector in Bangladesh, which is a classic case of government interference due to 'market failure'. Moreover, government's role goes beyond entrepreneurship; it also encompasses the Constitutional obligation as the 'provider'. Thus, conceiving and responding to the needs of the society for equitable distribution of water and to ensure environmental sustainability is of crucial importance. Inclusive public investment policy in water also deserves to be incorporated in the upcoming Seventh Five-Year Plan.
Public investment in water comes mainly through the Ministry of Water Resources (MoWR) and the Local Government Division (LGD), though they are conceptually interwoven. MoWR plays the planning and developmental role considering water as a scarce natural resource, while LGD acts as a provider of water for consumption. The major functions of the MoWR cover developing flood control and irrigation infrastructure, providing protection from river erosion and salinity, maintenaing canals, constructing reservoirs and embankments, dealing with water logging and drainage, and conducting study and collecting regular data. On the other hand, out of the eight major functions of the LGD, three are related to water: managing all matters relating to drinking water; developing water supply facilities in rural and urban areas; and developing maintaining and managing small-scale water resource infrastructures.
 Overall, the country's budget allocation directly related to water is Tk.73.7 billion in FY2014-15, which is 2.94 per cent of total budget with a growing share compared to that of the last budget. It includes allocation in MoWR, Directorate of Public Health Engineering (DPHE), four Water Supply & Sewerage Authorities (WASAs) functioning in City Corporation areas, and four projects under Local Government Engineering Department (LGED). In the last fiscal, the revised budget was Tk. 51.0 billion. Thus, the provisional allocation of the current fiscal has seen a big leap of about 45 per cent. On the other hand, the growth rate of budget allocation for water in the past fiscal years has been much lower, which grew at 24 per cent in 2013-14 and 16 per cent in the current fiscal year. Out of the four WASAs, Dhaka and Khulna witnessed significant reduction in the revised budget of FY2013-14, although demand for quality water is much more in these two areas due to high population density and geographic location.
 Surprisingly, although LGD's budget allocation on water is critically important for daily consumption, it was reduced in the last budget compared to the preceding year's. According to the estimate of the General Economics Division, the required per capita budget allocation to attain the MDG-7 relating to water and sanitation is Tk 947 in 2015. In practice, budget allocation per capita in this head is Tk.234 in FY2014-15, which is less than one-fourth of the required amount. Moreover, the Department of Public Health and Engineering's (DPHE) budget shows a discouraging trend in that it would not reach the nominal level of FY2012-13 until 2016-17. These numbers imply that budget allocation for water hardly complies with the overall fiscal trends and projections. The project titles under LGD literally fit with the major functions specified in MTBF document, though they hardly encompass the fundamentals of the right to water.
The share of public spending on water grew from 0.43 per cent in FY2013-14 to 0.55 per cent in the current fiscal year. On the contrary, gross value addition of water is significantly lower than public investment on water. In other words, the current national nominal return from water is about 15 to 19 per cent of public investment without taking into account the private investment. It implies that national accounting in Bangladesh undervalues water without disentangling the embedded water in agricultural output and critical manufacturing like textiles, steel, cement and fertiliser, let alone services output. Also, ecological and environmental value of water is yet to be conceived in the traditional SNA practised in the country.
 Finally, accessibility especially by disadvantaged and backward populations with adequate volume, quality and equity dimensions are neither stated in the medium term objectives nor covered in current fiscal measures. The upcoming budget should have a serious look into these matters. Given its critical importance in daily consumption and use in all economic sectors, water must be declared as a separate sector, and separate fiscal strategy should be developed for it in line with Water Policy and other national documents.
Dr Mahfuz Kabir is senior research fellow, Bangladesh Institute of International and Strategic Studies (BIISS).
     mahfuzkabir@yahoo.com