Water: A Case of Policy, Institutional and Market Failure

The policies for water management at village level are not necessarily confined to irrigation water but also affect significantly the problem of drinking water especially in the water scarce region. Institutional and market approach to dealing with the problems of water scarcity have been discussed in the literature. The present paper analyses the institutional foilures and problems of water markets in the water scarce region of Rajasthan. The paper essentially addresses to this question by taking villages as a unit for water management. Rural Rapid Appraisal (RRA) method, group interviews, individual interviews and the transect walks are used as tools of analysis apart from the empirical method of analysis. Thus the paper traverses in an analytical domain beyond the usual empirical work. Here an attempt is made to combine the methodologies beyond the broad discipline of economics. The focus of the analysis is on Rajasthan villages and the paper concludes that a blanket price policy may prove hamiful in a welfare oriented approach of provision of water. It is further argued that a differential pricing policy may be followed and this should be related to the availability of water or scarcity value of water.