Groundwater Pricing and Groundwater Markets: Issues and Challenges in South Asia

Abstract

There are several general principles involved in assessing the economic value of water and the costs associated with its provision. First, an understanding of the costs involved with the provision of water, both direct and indirect, is key. Second, from the use of water, one can derive a value, which can be affected by the reliability of supply, and by the quality of water. These costs and values may be determined either individually, as described in the following sections, or by analysis of the whole system. Regardless of the method of estimation, the ideal for the sustainable use of water requires that the values and the costs should balance each other; full cost must equal the sustainable value in use so that the full range of environmental and economic services of groundwater need to be accounted for in policy decisions. Non-recognition of these services imputes a lower value for the groundwater resource in establishing policies. In this chapter, an attempt has been made to assess the value of groundwater in terms of pricing and cost and to analyse the role of groundwater markets in terms of groundwater pricing and accessibility to groundwater, especially for irrigation purposes.