Water rights are widely regarded as a crucial component to enhance efficient water use and for meeting a country's water resource challenges. This article presents a framework for analyzing and comparing the similarities as well as differences of the water rights systems between India and China. The article relies on the method of document research and comparative analysis to compare general characteristics of India and China's water rights systems based on six evaluation indicators and evaluation principles. Using this analytical framework, this paper compares the implementation effects of the water rights systems in terms of the degree of meeting water resources demand, conflict-resolution means and the protection of water resources. Our findings provide insights for the reformation of the water rights systems and bring out lessons that other developing countries can learn from India and China's experiences.

Introduction

Many scholars, policy-makers and donors believe that improving the role and development of water rights systems holds the key to solving water insecurity problems in countries around the world (Bruns et al., 2005; Asian Development Bank (ADB), 2009). An effective water rights system not only lays down the foundation for a number of strategies in water resources demand management, such as water permitting and trading and withdrawal rights, it also helps to provide a level of certainty to water users and other stakeholders as to how water will be managed (Sun, 2009). Water rights are critical for providing a transparent, rule-based system for inter-sectoral as well as upstream and downstream water allocations, allowing water managers to control access and usage of water within a basin. They also help to regulate the operation of water infrastructure while managing social and environmental externalities. However, even when countries have clearly defined, legally enforceable water rights, it is difficult to translate them into practice, especially in developing countries with lower levels of state capacity (Meinzen-Dick, 2014).

In India, the demand for water has continuously exceeded the supply of water resources, a result of rapid industrial development, escalating population pressures, inequitable water allocation and increasing agricultural needs in an era of climate change and unpredictable weather conditions (Cronin et al., 2014). Asia's other giant, China, is confronting similar challenges of soaring demand and increasingly scarce water supplies. A recent study by the 2030 Water Resources Group (2009) estimates that by 2030, India and China will face a gap of 50 percent and 25 percent, respectively, between water demand and supply. This is a serious and worsening problem that calls for immediate attention to water resources management reforms. Yet despite the fact that two of the world's largest food-producing countries are naturally water-scarce and face common challenges in reforming their water management systems, there exists no comparative study of their respective water rights systems. Apart from a study that contrasts the evolution of water rights systems in China and Australia (Speed, 2009), there is little comparative research of water rights systems in general. There are many studies on water resources management in China and India, but the role of water rights systems for reducing conflicts and providing incentives for effective water use is still under-examined. In this article, we construct a conceptual framework to evaluate the water rights systems in India and China based on the framework developed by Saleth & Dinar (2005), and referring to the indicators selection method used by Araral & Yu (2013). The article fills an important gap in understanding characteristics of the water rights systems in India and China, and seeks to provide insights on possible reform of the countries' respective water rights systems. At the same time, we believe that insights derived from the comparative analysis of India and China's water rights systems hold lessons for other developing countries facing similar challenges.

Method

The framework adopted for the water rights systems evaluation draws from the conceptual framework developed by Saleth & Dinar (2005) and the indicators selection method used by Araral & Yu (2013) and Araral & Ratra (2016).

The work of Saleth & Dinar (2004) developed an institutional decomposition and analysis approach for examining institutions in general and water institutions in particular. Water institutions can be decomposed into institutional structure and institutional environment. Institutional structure can be further decomposed into its legal, policy and organizational components, and these components can be broken down further to highlight their underlying institutional aspects. With regard to water institutions, Saleth & Dinar (2004) examined these three components and their aspects: (i) water law (inter-source links, inter-resources links, water rights, conflict resolution, accountability and scope for private sector participation; (ii) water policy (use priority, project selection, cost recovery, water transfers, turnover/devolution, privatization and technology policy; and (iii) water organization (government layers, structure of water administration, finance/staff patterns, pricing/fee collection, information capability and technical capacity). They also illustrated the linkages and dynamics of these aspects to understand the performance of water institutions.

Araral & Yu (2013) used this framework to compare water governance for 17 countries in Asia. Building on the framework of Saleth & Dinar (2005), they presented an indicator system for water law, water policy and water administration. Araral and Yu selected 19 indicators based on the concept of water governance, including those for water rights, as they had been frequently cited in the literature and in policy discussions as well as being part of the widely accepted Dublin Principles on Water Governance. They decomposed water law into six components: legal distinction of different water sources, format of surface water property rights, legal accountability of water sector officials, decentralization tendency within water law, legal scope for private and user participation, and legal framework for integrated treatment of water sources. Water policy was decomposed into eight components: project selection criteria, linkages with other policies, pricing policy, private sector participation, user participation, linkage between water law and water policy, attention to poverty and water, and finance for water investment. Water administration was decomposed into six components: organizational basis, functional balance, existence of an independent water pricing body or apex body, accountability and regulatory mechanisms, validity of water data for planning, and science and technology application.

Drawing on the experiences of the above studies, water rights systems can also be decomposed into further components and indicators. Our assumption is that the effectiveness of a water rights system is in direct proportion to its theoretical rationality and the quality of its practical implementation. In this paper, we compare the water rights systems of China and India from two aspects: the characteristics of the water rights system and its implementation effects. Here, we chose six indicators of the characteristics of the water rights system. These are: the ownership of water rights, the characteristics of water use rights, the relationship between the ownership of water and water use rights/water withdrawal rights, the relationship between surface water rights and groundwater rights, the system of water resources fees or taxes, and the tradability of water rights.

Water rights are property rights of water resources and include ownership, water use rights, right of disposal and usufruct. As such, they are a bundle of rights (Jia et al., 2012). The water rights system is a system of rules that defines, allocates, adjusts, protects and exercises water rights and makes clear the right, responsibility and benefit between different governments, between government and users and between users.

When there are sufficient water resources for everyone and no competition, there is no need to establish a water rights system. As water resources becomes scarce and the competition for water use intensifies, a water rights system is needed to manage water resources. An effective water rights system should define water rights clearly, including ownership and water use rights. The ownership of water generally means the right of occupation, using, earning and disposing of water resources, but when contrasted with water use rights, it means only the right of occupation, and the water use right is separated from ownership, meaning the right of using water resources and earning the income or benefit from using it according to law. This is the basis of water resources management under the condition of water shortage, and it is also a necessary precondition of water rights trading. In this context, the ownership of water is considered effective if it is defined clearly for allocating water resources efficiently. In addition, water use rights should also be stipulated by the law.

The relationship between the ownership of water, water use rights and water-withdrawal rights should be considered, because it can influence the guarantee of the right of owners as well as the water efficiency of users. Under the condition that the water use right is separated from the ownership of water, ‘the right of owners’ means the rights owned by the state or public to manage water resources development and utilization for the purpose of the state or public, such as formulating water law, policy, development planning, levying a water resources fee or tax, etc. To avoid over-exploitation of common pool resources, it is necessary to differentiate between water ownership and water use rights, and to subdivide water use rights to lower-level governments or users rather than maintaining all water use rights at the central government level.

Water resources contain both surface water and groundwater. Because surface and groundwater are interrelated within the water-cycle system, we should define surface water rights together with groundwater rights. Separate treatment of surface water rights and groundwater rights could lead to rights conflicts and poor water-use efficiency and management. A reasonable water rights system not only defines surface water rights and groundwater rights clearly and separately, but also treats them as an entirety.

The water resources fee or water resources tax is the embodiment of owner's rights and is beneficial for better water resource management. It is levied on water use differently by administrative regulation or formal law and is used to compensate for the water management cost of governments and to protect the public interest, such as the water environment and the water ecological system.

Water rights trading means realizing the alteration of water rights by means of buying and selling. The owners whose water rights are sufficient sell water rights to owners whose water rights are not adequate. It could realize the reallocation of water rights and improve the efficiency of water use. To address scarcity and competition, water rights trading could be beneficial to cap total water use and to improve the utilization efficiency of limited water resources, if water rights have been defined clearly. The promise of water rights trading lies in the potential for reallocating scarce water resources and realizing higher efficiency under the condition of water shortage.

In addition to the six indicators selected above, the implementation effects of the water rights system can be evaluated from three aspects: the degree of meeting water resources demand, the conflict-resolution means, and the protection of water resources.

A good water rights system should meet the ecological, social and economic needs of the society. It should include the provision of safe drinking water and sanitation, and allocate water optimally among agricultural as well as industrial uses. The degree of meeting water resources demand can be influenced by many factors, including water resource conditions and a country's level of socio-economic development. But if the water rights system is not reasonable, the degree of satisfaction will not be high. Thus, the degree of meeting water resources demand to some extent reflects the implementation effects of the water rights system.

The indicator of conflict-resolution means describes whether specific means exist and are effective for resolving a variety of water disputes, such as trans-boundary, inter-state and inter-user conflicts over water resources. Nations should also have proper enforcement measures to guarantee the implementation of adjudication of the government or the court in case of disputes. Only with such proactive conflict-resolution means can countries ensure equal rights of stakeholders and rational distribution of water resources.

Finally, an effective water rights system should help protect resources from pollution or over-exploitation. It should have specific compulsory legal measures to ensure its implementation.

The evaluation principles of each indicator are summarized in Table 1.

Table 1.

Evaluation indicators and principles of the water rights system.

Aspect Indicator Evaluation principle 
The characteristics of a water rights system Ownership of water Are property rights for water resources clearly defined, and is there a mechanism of allocating water between users efficiently if water is scarce? 
Characteristics of water use rights Are water use rights clearly defined and granted to users based on legal principles? 
The relationship between ownership, water use rights and water-withdrawal rights Is the ownership of water rights separated from water use rights and water-withdrawal rights? 
The relationship between surface water rights and groundwater rights Are water rights defined systematically and do they take into account the interaction of surface water and groundwater in order to manage water resources uniformly? 
The system of water resources fees or taxes Can the water management cost of the governments be compensated and the public interest protected by fees or tax systems? 
Tradability of water rights Does the water rights system permit water rights trading under water-scarce conditions, to play the role of a market mechanism for resources allocation? 
The implementation effects of water rights system The degree of meeting water resources demand How well is the water demand in all aspects of society satisfied? If the degree of satisfaction is high, the water rights system may be not bad to some extent. 
Conflict-resolution means Are there conflict-resolution means to ensure the implementation of the water rights system? 
The protection of water resources Does the water rights system protect resources from pollution or over-exploitation, with effective legal measures? 
Aspect Indicator Evaluation principle 
The characteristics of a water rights system Ownership of water Are property rights for water resources clearly defined, and is there a mechanism of allocating water between users efficiently if water is scarce? 
Characteristics of water use rights Are water use rights clearly defined and granted to users based on legal principles? 
The relationship between ownership, water use rights and water-withdrawal rights Is the ownership of water rights separated from water use rights and water-withdrawal rights? 
The relationship between surface water rights and groundwater rights Are water rights defined systematically and do they take into account the interaction of surface water and groundwater in order to manage water resources uniformly? 
The system of water resources fees or taxes Can the water management cost of the governments be compensated and the public interest protected by fees or tax systems? 
Tradability of water rights Does the water rights system permit water rights trading under water-scarce conditions, to play the role of a market mechanism for resources allocation? 
The implementation effects of water rights system The degree of meeting water resources demand How well is the water demand in all aspects of society satisfied? If the degree of satisfaction is high, the water rights system may be not bad to some extent. 
Conflict-resolution means Are there conflict-resolution means to ensure the implementation of the water rights system? 
The protection of water resources Does the water rights system protect resources from pollution or over-exploitation, with effective legal measures? 

Analysis and results

Comparative analysis of India and China's water rights systems

The ownership of water resources

In India, although the ownership of water resources is bestowed upon states, the constitution makes a provision for the central government to intervene or exercise jurisdiction in the case of inter-state river basins and disputed water resource programs. For inter-state water conflicts, the central government has laid out provisions for the establishment of tribunals to provide adjudication. But the adjudication lacks authority, and state ownership of water is not absolute. As a result, not only is the implementation of ownership not clear, the definition of ownership is not clearly provided for by law. To explain this, we elaborate on the constitutional provisions.

According to Entry 17 in the State List, surface water resources are state subjects. However, this provision is qualified with Entry 56 in the Union List (which empowers the central government to regulate and develop inter-state river basins for the general public interest) and Article 262 (which gives parliament the authority to legislate over Entry 56). Unfortunately, due to a lack of powerful leadership at the center and the presence of a democratic government, parliament has not been able to exercise its constitutional powers effectively to date (Richards & Singh, 2002). This has led to a lack of long-term integrated basin-wide planning and management across inter-state river basins, as is evident from case studies of the Ganges, Kaveri and Krishna rivers. Vested interests among states have led to over-commitment of water resources upstream, compromising environmental flows downstream. Ever-increasing (and unplanned) urbanization as well as industrialization have resulted in uncontrolled pollution that affects the entire eco-system (Anand, 2007; Venot et al., 2008; Das, 2011).

In contrast, rights to groundwater remain largely attached to land ownership. In response to large-scale over-exploitation and depletion of water tables, the central government established the Central Groundwater Board (CGWB) under the Environment (Protection) Act, 1986. This board functions under the administrative control of the Ministry of Water Resources and acts as the apex body to monitor, regulate and manage nation-wide aquifers. The central government has also been encouraging state governments to develop their own legislative framework for groundwater since 1970 with the introduction of the Groundwater Model Bill, 1970; this bill has been revised various times, most recently in 2011. Many states (including Andhra Pradesh, Bihar, Goa, Kerala, Himachal Pradesh, Lakshadweep, Puducherry, Tamil Nadu and West Bengal) have already come up with their own groundwater policy. Others are in the process of drafting a groundwater law, but a few have still not done so. Interestingly, the latest Groundwater Model Bill 2011, also called the ‘Act for Protection, Conservation and Regulation of Groundwater, 2011’ establishes this resource as a common-pool resource linked to fundamental human rights and integrated with the eco-system as a whole (Cullet, 2012). The new bill recognizes the importance of local governments in effective management of the resources under the jurisdiction of State Groundwater Boards. However, the federal role of CGWB still remains – namely, collecting data from State Groundwater Boards, advising the Ministry and respective state governments, and implementing national policies for sustainable management of the country's groundwater resources (Cullet & Koonan, 2011a, 2011b; Cullet, 2012, 2014).

In China, the Water Code (first promulgated in 1988 and revised in 2002) states that water resources are owned by the state on behalf of the whole country. This form of ownership can be justified in ensuring that water resources are managed and allocated in a consistent manner across the nation. As a result, China, in contrast to India, has established water resources allocation plans that allocate water resources among different administrative regions. The central government distributes a water withdrawal/consumption quota for every province; each province defines a water withdrawal/consumption quota for its subordinate prefectures; and finally, prefectures further distribute this quota to respective counties. At the river basin level, total water withdrawal/consumption quotas are distributed via water resources allocation plans formulated by the applicable river basin management commission. For example, because there are nine provinces (Qinghai, Sichuan, Gansu, Ningxia, Inner Mongolia, Shannxi, Shanxi, Henan and Shangdong) within the Yellow River Basin and two cities/provinces out of the basin (Tianjin and Hebei) who use water from the Yellow River, the available surface water of the Yellow River Basin is allocated among 11 jurisdictions. The central government makes decisions and plans, and delegates implementation to local governments, but compliance remains partial. Consequently, political bargaining between administrative units often undermines the effective allocation of water resources.

In general, China's centrally managed approach to water ownership is more streamlined than in India, where diffuse responsibilities over multiple agencies, democratic rules and bureaucracy lead to multiple stakeholder interests, conflicts and unaccountability. In contrast, because China's central water authority is responsible for managing and allocating water resources, the system is more uniform and effective, thereby avoiding conflict over water resources to some extent.

The characteristics of water use rights

In India, access to safe drinking water is a fundamental right of every citizen, as established by law (Ministry of Law and Justice (MoLJ), 2007). But with water use being regulated by a number of laws, rules and principles, water use rights are often restricted. Since states have ‘exclusive power to regulate water supplies, irrigation canals, drainage and embankments, water storage, water power and fisheries’, the provision of water supply to agriculture, urban centers and industry falls under their jurisdiction. States are normally free to legislate and use their shares of water for any beneficial purposes so long as this use does not harm the interests of other states. The surface water supply is mainly provided by water supply projects where users, within the scope of the water supply projects, can obtain water use rights naturally (Global Water Intelligence (GWI), 2013).

In addition to surface water, India's irrigated agriculture and drinking water supply is heavily dependent on its declining groundwater resources. Groundwater extraction rights are tied to land ownership and considered to be the private property of land owners. Such an embedded notion of groundwater as a private resource has led to the development of widespread water markets in many areas throughout the country. In rural areas, villagers who possess a well often sell water to others. Private tankers supplying groundwater to water-stressed urban areas have become a booming business over the past decade. The supply of water for tankers often comes from peri-urban areas, leading to water table depletion and posing serious risks to agriculture. Apart from this, in many rural arid regions, wells are also managed through community groups, but their usage is restricted or categorized through caste systems. Lower-caste groups either have to take water from different wells or stand for longer times to access water. So although government policies claim that all underground natural sources are ‘common pool resources’, private land owners and local community rules have been regulating groundwater draft and usage on their own terms (Moench, 1998). In view of this situation, in 2012 the Central Groundwater Authority (CGWA) developed a list of criteria to allow controlled extraction in various areas, supervised by district administrative heads for each administrative block. In a 2009 evaluation, CGWA identified several notified, non-notified, critical, and semi-critical areas, according to which groundwater regulation policies have been formulated and implemented in respective regions. Users must now seek permission from respective municipalities to abstract groundwater (CGWA, 2012).

In stark contrast, water use rights in China are clearly defined as well as protected and restricted by the Water Code (2002) (Standing Committee of the National People's Congress (SCoNPC), 2002); water resources are distributed according to the water resources allocation plan and the water-withdrawal permission system. The three-tiered allocation system – including the river basin level (water use/consumption quota), abstractor level (diversion permission) and terminal user within public water supply systems – is helpful for realizing the reasonable allocation of water use rights at three connected levels. Before China's first Water Code in 1988, users did not need to obtain permission for water withdrawal, but since the water code promulgation, all abstractors must adhere to water resources planning and obtain permission to abstract water, except family human and livestock drinking water, a small amount of agriculture irrigation water, a small amount of water withdrawn by human or livestock power, as well as necessary withdrawal for combating drought and maintaining the safety of life and property. Under the current system, water use rights can be allocated to smaller administrative areas according to the water resource allocation plan and further distributed to micro-users by the water-withdrawal permission system (Xie, 2008). All users in the supplying scope of water infrastructure have water use rights naturally and do not need to apply for permission again. But there are still problems and conflicts in allocating water resources at present, due to the poor implementation of the system. Although water resources allocation is well organized, there is still a long way to go in strengthening the management of water resources.

Hence, regarding water-withdrawal rights, Indian states have more discretion to allocate and distribute water rights to users, while the center has the role of dispute resolution and monitoring. In China, water rights are defined by the central Water Code; provinces simply execute central water resource allocation decisions while micro-level water withdrawers are required to get permission. Water resources are allocated to users clearly in theory in China.

The relationship between ownership, water use rights and water-withdrawal rights

In India, surface water is owned by states and water resources are allocated by the water supply project of states. The ownership and surface water-withdrawal rights are all owned by state governments and not distributed to root-level users. The users in the scope of the water supply project can obtain water use rights, but they can only use the allocated water and officially have no right to re-allocate or transfer their water rights to other users. In essence, the water use right belongs to the government. Thus, the ownership of surface water, water use rights and water-withdrawal rights are not separated. As for groundwater, the notion of considering it as private property based on land ownership means that water ownership, water use rights and water-withdrawal rights are not well differentiated. Although the government has created numerous policies and guidelines for equitable distribution and sustainable allocation, landowners in many areas still treat groundwater as their private property without any accountability or responsibility. Such trends lead to extensive water markets, inefficient water use and exclusion of landless users in many places (Saleth, 1998; Kulkarni & Shankar, 2014).

In China, the ownership of water resources is exercised by the State Council on behalf of the people, but water use rights are provided to local governments and terminal users by the Water Code (2002). Water use rights can be obtained by the local government through the water resources allocation system from senior government or by the micro-users through water-withdrawal permissions. While the ownership of water is placed under state control, users have to attain permission to use water. As a result, ownership and water use rights are clearly separated, and therefore the water rights system in China can balance the interests of both the country and the terminal users, as well as maintain the flexibility of diverse use. This system works better than that in India, where ownership, water use rights and water-withdrawal rights are not separated. In addition, central and state jurisdictions as well as their implementations are not clearly laid out in India.

The relationship between surface water rights and groundwater rights

Under the Indian system, surface water resources are owned by state governments (MoLJ, 2007), but groundwater rights are linked to land ownership and are privately owned (Iyer, 2009). The existing difference in law between surface water and groundwater impedes efforts to integrate and ensure consistency within the water rights system. The treatment of groundwater as a private property of landowners fails to internalize the externalities associated with its over-exploitation, because the scope of ground aquifers, as well as the interaction between surface water and groundwater, is often extended to the lands of many owners. As a result, an increasing number of aquifers are reaching unsustainable levels of exploitation. If current trends continue, about 60% of all India's aquifers will be in a critical condition by 2030 (World Bank, 2010). Keeping in view the need to preserve this common pool resource, state governments and local municipalities have been tasked to facilitate groundwater recharge as well as rainwater harvesting to replenish withdrawn groundwater (The West Bengal Groundwater Resources Act, 2005; Cullet, 2012). Thus, to some degree such provisions are expected to link groundwater rights (by recharge) and surface water rights (through rainwater harvesting).

In China, however, both surface water resources and groundwater resources are owned by the country and defined as a single entity in practice (SCoNPC, 2002). As such, surface water rights are closely linked to groundwater rights. The benefit of this linkage is that it maintains the integrity of the water cycle and reduces uncertainty about the allocation of water rights.

It is worth noting that the management of surface water and groundwater is poor in China. Before the first Water Code in 1988, water resources were allocated by project, as in India. With the development of the economy, in northwestern China, the water resources for ecological use are occupied largely by agricultural and industrial use, which leads to the deterioration of the ecological environment. The terminal lakes of the Heihe, Shiyanghe and Tarim rivers disappeared. But with the implementation of the Water Code in 1988, which made an explicit stipulation about the ownership of water resources, including surface water and groundwater, as well as a water-withdrawal permission system, water withdrawals were more strictly controlled. Especially with the establishment of a water allocation plan in Northwestern China, such as the comprehensive rehabilitation planning of the Heihe River Basin in 2000, the Tarim River Basin in 2001 and the Shiyanghe River Basin in 2005, surface water and groundwater is managed and allocated uniformly, and considers the importance of water for the ecological environment. In 2011, China's Ministry of Water Resources issued the ‘Three Red Lines’ to control total water use (both surface water and groundwater), improve water use efficiency, and control water pollution. Through strengthened management, both surface water and groundwater were controlled, and the terminal lake in Northwestern China, Taitema Lake in Xinjiang, Juyanhai Lake in Inner Mongolia and Qintu Lake in Gansu were restored. With the unified allocation of surface water and groundwater, the groundwater of the North China plain was also gradually controlled. In the future, it is planned that the recent groundwater supply in excess of the sustainable capacity will be substituted by the water diverted from the South to North Water Diversion Project. Against this background, the unified management of surface water and groundwater in China has witnessed a gradual improvement from bad management to effective control.

Hence, surface water rights and groundwater rights are defined entirely and uniformly in China and the unified surface water and groundwater management is improving. In India, segmentation of water rights between surface water and groundwater complicates and impedes policy implementation. Although managing groundwater has become a growing challenge in both countries, it is more difficult in India due to the separation of surface water rights from groundwater rights.

The system of water resources fees or taxes

The water resources fee or water resources tax can be seen as the cost of public water resources management, and is one part of the total water cost. According to Kanakoudis et al. (2011), the chief components of an effective ‘Full Water Cost Recovery’ should contain direct costs, environmental cost and natural resource cost. Water resources fees or taxes are equivalent to RC.

Water tariffs in India are varied, and the structure differs among local municipalities and urban centers. The National Water Policy (NWP) (Ministry of Water Resources of India (MoWRoI), 2012) calls for equitable, efficient and economic water pricing to be adapted in each state by an appointed Water Regulatory Authority to ensure efficient cost recovery and participatory conservational attitudes among consumers. The NWP also proposes differential pricing as an effective way of setting water tariffs. Generally, cities charge their water fee in various forms, including a one-time connection charge, annual meter rents, water charges, service taxes, and monthly consumption charges. Cities like Delhi, Hyderabad, Bangalore, and Chennai follow an increasing block tariff, while others impose uniform volumetric charges, for example in Kanpur, Indore, Surat and Madurai. States like Kerala employ a linear water charge structure. For unmetered connections, often a flat annual fixed charge is levied on consumers as in Kolkata (Mathur & Sridhar, 2009; McKenzie & Ray, 2009). However, one uniform characteristic in water charges found across the country is that the water prices are too low and are not sufficient to cover even the operation and maintenance (O&M) costs of utilities, leading to poor service and underdeveloped infrastructure. Lastly, the high proportion of non-revenue water is a major paralyzing factor for most urban water utilities in India, resulting in substantial revenue loss (Aggarwal et al., 2013).

China, in contrast, has an explicit water resources fee and water resources fee collection system, as specified in the Water Code (2002), thus guaranteeing the rights and interests of the owners of water resources to a certain extent. For a long period, at least until the early 1980s, the central government managed water resources and provided water services to consumers at a very low rate, or even free of charge. But from the 1980s onwards, the government began to charge for water services. The government has made major changes in the water tariff system over the years, including in tariff charges and tariff decision-making authorities. This is facilitated by a transformation in the system, from a highly centralized and bureaucratic policy-oriented system to a legislative, institutionalized one which formulates decisions through public hearings and mitigations (Zhong & Mol, 2008). Today, China is seeking to convert the water resources fee into a separate tax component. As compared to a water resources fee collected by administrative means, a water resources tax is a statutory tax that has more authority and enforcement mechanisms to ensure that water users pay on time.

China's water resources pricing system clearly indicates the rights of the nation as the owner of water resources as well as its intentions for ‘full cost recovery’ in order to protect the functional as well as the financial sustainability of the system. In theory, ‘full cost recovery’ is the final goal of levying a water resources fee. But significant efforts are required to realize the goal, such as strengthening the compulsory measures for levying the water resources fee. There are also intentions to change the water resources fee as an administrative charge to a water resources tax or statutory tax. In contrast, India is still struggling to establish an efficient regional water tariff system. There is no uniform national water tariff framework. Although the NWP has proposed an equitable, efficient and economic water supply fee, it will be a long journey for the respective municipalities to attain such a goal.

Tradability of water rights

Informal water markets in the groundwater sector have existed in various parts of India since the early 20th century. However, in the absence of effective legislation or government policies, these markets are mostly spontaneous, informal, unregulated, localized and seasonal (Tiwari & Ankinapalli, 2013). Lack of regulation in informal water markets has led to over-exploitation and depletion of the water table in many areas. Many agricultural landowners have quit farming and shifted to the water trade as a means of livelihood, thus shifting water from agriculture to urban or industrial markets (Rosegrant & Binswanger, 1994; Palanisami, 2009). In addition, property rights owners can trade within or sometimes between catchments. At present, there are a few small-scale private sector initiatives that have led to some improvement in service delivery. Increased efficiency has resulted from competition among service providers and through close relationships with local communities (Cronin et al., 2014). However, there is limited inter-state trade, due to lack of government initiative. Since each state owns its share of water, inter-state transactions between water surplus and water-scarce areas is not yet developed (Palanisami, 2009), due to the absence of a strong central water law as well as high transaction costs for long-distance transfers. It should also be noted that while water markets exist, water rights markets do not. What is traded is water as a commodity, not water rights. Surface water rights (as well as use rights) belong to the state, which lacks entitlements in any kind of water rights trading, and groundwater rights are attached to land rights. As a result, water rights trading is non-existent in India.

Similarly, water rights trading is still in an early stage in China and there is no formal water rights trading system. Although the Chinese government has established water rights trading programs, these schemes are guided by administrative departments, and water users have little role in the water rights trading. For example, the transfer of regional water rights between Dongyang city and Yiwu city in Zhejiang province is widely regarded as a permanent water supply contract where Yiwu city buys 50 million m3 of water annually from Hengmian reservoir in Dongyang city for 200 million ¥. Yiwu is located downstream of Dongyang along Dongyang River. In fact, there is sufficient water flowing through Yiwu city, but there is no suitable site to construct a reservoir to store and regulate the water. The agreement between Yiwu and Dongyang is for water supply service, but not water rights. In the Yellow River Basin, there have also been cases of so-called water rights transfers since 2003 with the common characteristic of ‘investing in channel lining and transferring water diversion rights’. Here, surplus water from water diversion projects, acquired through sealing of leakage, was reallocated to the industrial companies funding channel lining engineering (Wang, 2012). In addition to inter-jurisdictional and inter-sectoral trading, the water ticket and trading system for irrigation in Zhangye city in the water-stressed Heihe Basin is another model of water rights trading based on short-term trading of water use rights. This system was designed to limit the overuse of irrigation water by establishing a water use rights system with tradable water quotas (Zhang et al., 2013). In reality, however, its function is limited. It does not reduce the existing uncertainties over water rights and provide the stable long-term expectation of water rights arrangement that is required by water property buyers.

Like India, China's water rights trading system is also at a primary stage. In China, the government plays a key role to develop schemes for regional water transfers, and individual users have no role in such water trades. This compares to India's well-established but primitive informal groundwater market system where individual owners and users play decisive roles. Against this background, both India and China should consider building a formal water rights trading system in their water-scarce regions whereby the market may play an active role in allocating water resources to realize optimal allocation and efficient utilization of limited water resources.

Comparison of the implementation effects of the water rights systems in India and China

The degree of meeting water resources demand

In 2010, the United Nations (UN) declared that safe and clean drinking water and sanitation is ‘a human right that is essential for the full enjoyment of life and all human rights’ (United Nations, 2010). This right contains both freedoms and entitlements. The freedoms include the right to maintain access to safe and clean drinking water and the right to be free from interference of water supplies. The entitlements include the right to a system of water supply and management that provides equality of opportunity for people to enjoy the right to water (Salman, 2014).

A 2007 study by the Asian Development Bank found that the average duration of supply in 20 cities was only 4.3 hours per day, and no city had a continuous water supply (ADB, 2007). In India, the level of service varies remarkably between urban and rural areas, with around 71% of urban households and 31% of rural households connected to a piped water supply (GWI, 2013). To make things worse, sanitation continues to be inadequate in India. As of 2010, only 34% of the population has access to improved sanitation; 58% of the urban population uses an improved sanitation facility, compared to 23% of the rural population (World Health Organization (WHO)/United Nations Children's Fund (UNICEF), 2012).

Another study of the Indian urban water supply by McKenzie & Ray (2009) found that a piped water supply was available to approximately 69% of households in large cities, 45% in small towns and only 9% in rural settlements. In addition, most Indian cities had intermittent water supply for only a few hours each day, with inadequate pressure and unsatisfactory water quality. Unaccounted-for/non-revenue water accounts for 25–40% of total supplied water in many cities, leading to substantial losses by water purveyors. In addition, low water prices create unsustainable revenue gaps, resulting in poor service provision (Mukherjee et al., 2015). All these have led to loss of confidence and dissatisfaction among consumers, whose willingness to pay proper water charges decreases as their coping costs escalate.

In China, cities normally have 24-hour continuous water supply, and the piped access rate in 2013 was 97.6% for cities and 81.73% for towns (Ministry of Housing and Urban-Rural Development of China, 2014). Only 83% of the supplied tap water met quality standards in urban areas, however, and about 3 × 109 rural residents lack access to safe drinking water (Jia et al., 2014).

In 2010, the irrigation norm of India was 9,500 m3/hm2 (Wescoat, 2013), whereas it is 6,300 m3/hm2 in China (Ministry of Water Resources of China (MoWRoC), 2013). While the irrigation water utilization coefficient in India is 0.41 (Food and Agriculture Organization of United Nations (FAOoUN), 2015), it is 0.52 in China (MoWRoC, 2013).

Hence, in general, the degree of meeting water resources demand in China is higher than in India. The water supply system in China has been able to meet socio-economic needs better than in India, for drinking water supply and sanitation, as well as for agricultural and industrial water use. However, this degree of satisfaction may be influenced by other factors in addition to the water rights system, such as the availability of water resources generally, the country's economic level and so on. In China, the total amount of water resources is 2.8 × 1012 m3, compared with 1.87 × 1012 m3 in India. Moreover, China's gross domestic product in 2014 was 1.04 × 1013 dollars, against 2.05 × 1012 dollars in India. All these factors could influence the degree of meeting water resources demand. But if the degree of meeting water resources demand is high, it is sure that the water rights system has not disrupted the water supply. Thus, the high degree of meeting water demand in China shows that the implementation of the water rights system is more uniform and has fewer barriers than in India.

Conflict-resolution means

As has been discussed in previous sections, water in India is primarily treated as a state subject and any dispute regarding surface water or groundwater falls under state jurisdiction. However, in the case of inter-state river basins, disputes over sharing of water resources have been a longstanding problem, even before independence. Although Entry 56, Article 262 of the Constitution, Inter-state River Water Disputes Act (1956) (MoWRoI, 1956) and River Boards Act (1956) (Ministry of Law (MoL) 1956) enable the central government to intervene and manage overall development of such river basins, based on equitable distribution, states seldom comply with such provisions. Most river basin disputes have been conferred by the central government to court-appointed tribunals, whose awards are considered to be beyond the jurisdiction of the Supreme Court or any other courts (Bakshi, n.d.). Unfortunately, the reality, as Srinivas Chokkakula notes, is that ‘tribunals fail to ensure appropriate institutions are in place to implement awards; and, tribunals and their awards are undermined by jurisdictional conflicts with the Supreme Court’ (Chokkakula, 2012). In addition, powered by the River Boards Act, the central government, on receiving a request from concerned states, may also form separate river basin boards to advise the government on regulation and implementation of river valley development schemes. Here, too, the role of river boards is only advisory and not adjudicatory. Such weak legal provisions weaken the foundation of the laws and their dispute resolution capacities.

India has formed tribunals over many river basin disputes, such as Krishna, Godavari, Kavery, Ravi-Beas, Narmada and many more. The main issues that have led the contesting states to seek intervention are rising regional development demands along with decreasing water availability. Instead of looking for basin-wide cooperation for development, states are contesting individual rights and shares. But the truth is that river waters have been already over-committed (as in the case of the Kavery and Krishna rivers), leading to basin closure in some rivers (such as the Krishna) (Anand, 2007; Venot et al., 2008). Even after tribunal awards are published, unsatisfied states have approached the Supreme Court for a Special Leave Petition (SLP), thus stalling the tribunal award and delaying the whole development process (Ministry of Water Resources, India, website). In reality, in spite of an elaborate parliamentary framework, water dispute resolution remains a complex, never-ending process due to the broad scope of discretion, the bargaining power of states and unclear constitutional provisions (Richards & Singh, 2002).

In China, the 2002 Water Code defines water resources management institutions and stipulates general principles for resolving water disputes through governmental administration. In regions where there are serious water conflicts, there are water resources allocation plans set by higher-level government to ensure that water disputes are settled by administrative mechanisms. On the Yellow River, in dry years or dry seasons, the regions along the river abstracted, stored, and competed for water resources. Because of a lack of unified operation and regulation in the basin before 1998, the upper reaches always diverted water and the water demand of users in the lower reaches was not seriously considered. This was the main reason that the Yellow River dried up in the 1990s. In 1998, the State Commission of Development and Planning and the Ministry of Water Resources issued ‘The Yellow River Water Regulation Management Method’ to enforce the unified control of all water intakes along the trunk stream of the Yellow River. Since then, there has been no drying up of the Yellow River. In 2006, the State Council promulgated the more authoritative ‘Rules of Yellow River Water Regulation’.

The above description of experiences in water dispute resolution in both countries indicate that both India and China need further improvement of institutional arrangements and better implementation of legislative provisions to resolve water-related conflicts more effectively. Although India appears to have an elaborate judiciary system for grievance reprisal of contesting parties, in reality, diffused or weak powers of the central government result in unnecessary delay of dispute resolution. China has a strict vertical administrative management system that contains water conflicts among different administrative levels, but it needs to strengthen the resolution mechanism for horizontal conflict and competition between administrative jurisdictions (Moore, 2014).

The protection of water resources

India had long established laws to directly address water resource pollution, in the form of the Water Act (1974) (Parliament of Republic of India (PoRoI), 1974), the Water Cess Act (PoRoI, 1977) and the Environmental Protection Act (1986) (Ministry of Environment and Forests (MoEF), 1986). Although these legal regulations exist for the protection of water resources, there have been no effective institutional arrangements to ensure their strict enforcement (Cronin et al., 2014). Furthermore, the pollution control laws do not cover water pollution from domestic and agricultural sectors. But there is no standard for estimation of pollution caused by run-off from agricultural fields, mines and industrial areas (Murty & Kumar, 2011). India has adopted the National Water Policy (2002) (MoWRoI, 2002) and the National Water Mission (2008) (MoWRoI, 2008) to set forth the country's water-related policy and management practice guidelines, but the effectiveness of these initiatives has been blunted by poor implementation and lax penalties (Price et al., 2014).

In India, the Central Pollution Control Board (CPCB) and its state-level counterparts are responsible for preventing, monitoring and controlling nation-wide pollution issues. According to the CPCB (2015) report, 302 polluted river stretches out of 275 rivers along 650 urban centers have been documented throughout the country. The total wastewater generated across the country is about 507,000 million litres per day (MLD), of which treatment capacity for only 11,000 MLD has been created to date. In addition, over-extraction of water and inadequate environmental flows aggravate the situation even more (Murty & Kumar, 2011).

In China, protection of water resources and prevention of water pollution are clearly provided by the law. For instance, the fourth chapter in the Water Code (2002) provides for the protection of water resources in detail. Besides the Water Code, there is a special Water Pollution Prevention Law. In addition, water pricing mechanisms have been developed to protect water from misuse and pollution. Unfortunately, in reality, water pollution still remains widespread due to poor enforcement of regulations. Rapid industrialization and urbanization have increased consumption of water resources and emission of pollutants to such a scale that China is struggling hard to keep up with rising demand for clean water. In China, the quality of surface water is divided into six levels (Grade I, II, III, IV, V, and inferior V) based on the functionality of water and water quality standard. Grade I is regarded as pristine water that should be protected at all costs. Grade II to III is regarded as good water that could be used for drinking. Grade IV is qualified for industrial use. Grade V is regarded as bad and can only be used for recreation and irrigation. Grade inferior V almost has no use. On this grading system, in 2011, out of 469 river sections of China's 10 national river basins, 61% met Grade I to III standard, 25.3% met Grade IV to V standard, while 13.7% failed to meet Grade V standard (Ministry of Environmental Protection, 2012). Another urgent problem is that there is not enough water set aside for restoring and maintaining environmental flows. This was illustrated by the cases of the drying up of the terminal lakes of Tarim River, Heihe River, and Shiyang River as well as the drying up of the Yellow River before 2000.

Against this background, addressing water pollution concerns by enforcing strict control regulations would open up a lot of clean water for both countries. In general, China and India have laws for protecting water resources but lack enforcement measures to ensure proper implementation of the laws. Given the pressing challenges, both countries should establish effective institutional arrangements and strengthen enforcement measures for the protection of their water resources.

Conclusion

The current water rights systems in both India and China are plagued by unsustainable practices and illustrate the tragic nature of common-pool resource use. By decomposing the water rights system into indicators based on the framework developed by Saleth and Dinar, we make the following observations about the water rights systems in China and India.

First, water rights have been clearly defined in China, where both the surface water and groundwater resources are owned by the country. In India, surface water rights as well as use rights belongs to state governments, while groundwater is treated as landowners' property. Such discrepancy in theory and practice leads to multiple stakeholder interests and diffused powers.

Second, China defines surface water rights in conjunction with groundwater rights, which is a prerequisite for managing and allocating water more uniformly and efficiently. In India, the different treatment of surface water and groundwater is a major barrier to developing an integrated and consistent approach to managing water rights at all levels.

Third, the ownership of water, water use rights and water-withdrawal rights are separated in China, while these rights are not separated in India. The combination of state ownership and discrete use rights in China has the advantage of uniform and integrated allocation of water resources at the national scale, while it gives space for local flexibility.

Fourth, China has a water resources fee institution and plan to change it to a water resources tax, which embodies the right of owners and provides support for the public interest. India, however, still lacks a uniform water tariff system.

Fifth, current water rights trading projects in China and India are in the early stages and the water rights market is not mature. In this article, we have highlighted that market-based mechanisms such as water rights trading are considered as options for inducing changes in water use behavior, but the administrative legacies in both India and China constrain the applicability of market-based responses to water problems.

Sixth, the higher degree of meeting water demand in China indicates that the implementation of the water rights system in China has been more successful in meeting the water requirements needed for social and economic development than in India.

Seventh, although China has a more proactive approach in resolving water disputes than India, with an emphasis on economic and institutional measures to manage water resources, China's capacity to resolve trans-boundary river disputes is still quite limited.

The water rights arrangements of the two countries for the protection of their water resources are inadequate. Both China and India may face difficulty in the future in keeping up with demand for clean water in an era of urbanization.

It should also be noted that the water rights systems of both countries are evolving, especially in China. The 1980s and 1990s were the main periods of water resource crises, such as the drying up of lakes and rivers, water pollution events, urban water supply disruption and the loss of irrigation water sources. Since the end of the 1990s, as China strengthened basin rehabilitation, set up basin water allocation plans, and adopted the strict Three Red Lines policy in 2011, the situation has improved incrementally. While China is developing from poor enforcement of water laws and policies to strict management, there is still a long way to go.

Acknowledgement

This study was supported by the Chinese Academy of Sciences (Contract number KFZD-SW-301), National Natural Science Foundation of China (41471463) and Energy Foundation (G-151213-9).

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