According to a report of the International Monetary Fund, Pakistan is the world’s 36th most water-stressed country and this situation not only poses a grave challenge to the government to meet the requirement of the growing population but also has the potential to depress all the aspects of the national economy. The case study blames mismanagement as a principal cause of the problem and notes that the role of economic policy is instrumental in facing the water challenges. The country is endowed with natural water resources and it has the most extensive irrigation system in the world. However, the government needs to make a paradigm shift in water policy and management to harness these assets. The fund wants the Pakistani authorities to focus on demand-side measures to promote conservation and control exploitation of excessive groundwater.
The Sindh Irrigation Department has already submitted a proposal to the finance department to enhance its budgetary allocations for the annual development program up to Rs 12 billion against its allocation of Rs 8.6 billon for this fiscal year. A major chunk of the funds is likely to go to water conservation projects in the province. The IMF stresses the need for greater engagement of all the stakeholders in water management as well as capacity building of the water management institutions. It also calls for reforms in agriculture taxation systems in the provinces. The main thrust of reforms should be to improve water-use efficiency in agriculture, as it is escaping taxation at the federal level and bearing a light tax burden at the provincial level. The IMF study apparently focuses on water scarcity and water conservation issues in the country, but it tacitly wants to burden water consumers with more taxes. The fund wants reforms in water and electricity sector as it wants limited use of water and withdrawal of subsidies on electricity in agriculture sector, noting that canal water is vastly underpriced, recovering only one-quarter of annual operating and maintenance costs.
However, point of concern is that per capita annual water availability in Pakistan has dropped from 5,600 cubic meter at independence to the current level of 1,017 cubic meter. The lending agency projects further decline of water level under the current infrastructure and institutional conditions due to population growth. The water demand is projected to reach 274 million acre-feet (MAF) by 2025, while supply is expected to remain stagnant at 191 MAF, resulting in a demand-supply gap of approximately 83 MAF. The federal as well as the provincial governments need to allocate suitable funds for water conservation in the country and water consumption needs to be rationalized. Keeping in view the geography and hydrological cycle in the country, the climate change is also responsible for widening gap between water supply and demand. What the government has to do is to make independent policies according to the ground realities and should not bow to any foreign pressure.
