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This paper is an attempt to review the role of various regulatory instruments in managing water demand with specific objectives of listing out types of regulatory instruments; role of these instruments in managing water demand and attaining equity; assess existing social regulation models and draw lessons for policy. Basic regulatory instruments that are being or could be adopted in water management are broadly grouped under: (i) direct and indirect regulation, (ii) economic regulation, and (iii) social regulation.
The review of the role of regulatory instruments in managing water demand across the countries suggests that the commonly used instruments like pricing, supply regulation, direct and indirect policy regulation, etc., have not been effective. This is more so in India due to complex socioeconomic and resource systems and policy environment. Often policies are neither comprehensive nor they work in tandem. It is argued that unless policy, economic and institutional regulations complement each other, the scope for achieving sustainable and efficient water management is a far cry.
None of the regulatory instruments have equity in-built in to them. Whatever equity impacts evident seems to be rather incidental. On the other hand, social regulation appears to be more effective in achieving sustainability and equity though it requires lot of efforts working through complex rural dynamics at various levels. The reason is that appropriate policies to support or encourage such initiatives are not in place. Social regulation initiatives may remain as models rather than being adapted at a wider scale in the absence of complementary policy/legislative/legal support. Creating demand for these initiatives is as important as demand management of water. The regulatory instruments for demand management would not be effective as long as policy environment continues to be supply sided.
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- Regulatory Instruments and Demand Management of Water: Potential and Prospects
V. Ratna Reddy
- Chapter 9
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