Water is perceived as a free public good. The full cost is borne by the state government but the scheme is financially unsustainable. Some rural households are willing to pay for better services. This preparedness to pay is far more common in developing countries than commentators have previously tended to assume. Domestic consumers who are able to pay would prefer to have an individual household supply than contribute to the improvement of community standpipes.
Consumers are more willing to pay for water if they perceive the supply as reliable.
Only 17 percent of Indian households with a piped-in supply are satisfied. Such dissatisfaction raises doubts over whether the government should continue to be the sole supplier. People may be willing to pay more for schemes run by user groups or private enterprise. This shift could stop the downward spiral of low revenues and deteriorating infrastructure. Urban water supply systems yield higher revenues, which could be improved still further.