Amid AAP’s free water plan, tariff hike on the cards in Chandigarh

Even as the Chandigarh municipal corporation House’s decision to provide 20,000 litres of water free to each household every month is awaiting the UT administration’s approval, the civic body is going to hike the water tariffs by 5% from April 1.
With the annual 5% hike set to come into effect in two days, city mayor Kuldeep Kumar Dhalor on Friday wrote a letter to the secretary of UT local bodies department, demanding “an immediate halt on annual hike” and “free 20,000 litres of water to every household”.
In 2022, the Chandigarh administration had hiked the water tariffs in the city by up to 150% for all segments of consumers, including domestic, commercial, institutional, government and semi-government offices, hotels, cinemas, taxi stands and industrial areas.
Along with this, the administration had decided to increase the tariff every year (starting from April 1, 2023) by 5%. The UT then had also decided to impose sewerage cess on water bills, further increasing the water bills for the consumers. Until April 2022, there had been no change in water rates since 2011.
Meanwhile, though the city residents will have to pay 5% extra for water charges, the annual hike might not pinch their pockets much, as the MC House had also decided to slash the sewerage cess imposed on water bills from the existing 25% to 20% from April 1. With the cut on cess, the overall water bills of the city residents will see only a marginal hike.
Acting on the resolution passed by the Chandigarh MC House, the UT administration in June last year had slashed the sewerage cess on water from 30% to 25% for the financial year 2023-24 and announced a further cut to 20% from April 1, 2024.
In the letter to secretary, local government (SLG), the mayor said, “I have come to know that the water tariff is going to increase by 5%, which is an undue burden on city residents. Also, the House has passed a resolution to provide free 20,000 litres of water to residents, which was a persistent demand of the general public. It is requested that a 5% hike on water tariffs may be stopped immediately and consider the resolution passed by the House, in the interest of the public.”
Later addressing a press conference on Friday, the mayor said, “There are 50,359 such meters in Chandigarh where consumption is less than 20,000 litres per month. The average monthly bill for these meters is ₹39,65,771 and can be easily footed by MC. By supporting the agenda of increasing water bills in 2019, additional burden was put on the people of Chandigarh by former BJP president Arun Sood.”
Just a day after MC House had approved the free water proposal on March 11, Punjab governor and UT administrator Banwarilal Purohit had said he will not approve the House decision.
“I won’t approve the proposal for free water. Yesterday, one party was offering 20,000 litres of free water while another was offering 40,000 litres. I am not favouring any political party, but they should make only those promises to residents that can be fulfilled,” Purohit had said.
“How can we give free water in Chandigarh when we have already signed loan agreement for 15 years for the 24×7 water project?” Purohit had remarked, adding that MC commissioner Anindita Mitra should have guided the councillors that it was not possible to give free water.
The administrator was referring to the agreement signed between MC and French government’s Agence Francaise de Developpement (AFD). Of the project’s total financial outlay of ₹510 crore, ₹412 crore is being provided by AFD in the form of loan, to be repaid in 15 years. In addition, the European Union is giving a grant of ₹98 crore for the project. The loan amount will be recovered from residents through hiked water tariffs.
It is required to be repaid on a quarterly basis over a period of 15 years after completion of the project, which is expected by December 2029.
The present estimated population of Chandigarh is around 12.90 lakh and water to tune of 245 litres per capita per day (LPCD) is being supplied, even when the ideal consumption should be 150 LPCD.
It is estimated that about 38% of water is being lost due to undetected leakages in transmission and distribution network, water stand posts, average billing, theft and metering losses. This non-revenue water is substantially higher than the standard norms of 15%.
In FY 2023-24 (up to February 29, 2024), the civic body spent ₹244.7 crore on water supply, but in return, it could generate only ₹138.58 crore as revenue, translating into a deficit of ₹106.12 crore.
In the FY 2024-25 budget, MC estimates to earn ₹160 crore from water bills.