well with toilet coverage recorded by Government officials at the SBM baseline for these district, collected in 2012-2013, which came to around 28% for the whole of rural Nanded and Latur.

As with other contexts in India and beyond [Augsburg et al., 2015], the vast majority of households – 83 percent – reported affordability or price as the key reason for not having a toilet. This is not surprising since building a toilet requires a significant expense: for instance, low-cost toilets recommended by SBM would account for around 20 percent of annual household income in our context. Thus, policies and interventions that target these financing and price constraints might influence toilet coverage.

# **2.2 SBM subsidy program**

On 2 October 2014, the Government of India (GoI) launched its ambitious nationwide sanitation program called Swachh Bharat Mission (SBM), or ‘Clean India’ Mission. The program’s key objective is for India to become Open Defecation Free (ODF) by 2 October 2019, the 150th birth anniversary of Mahatma Gandhi. A succession of government programs targeted at improving India’s sanitation situation preceded the SBM. First efforts go back to the Central Rural Sanitation Program (CRSP) in 1986, replaced by the Total Sanitation Campaign (TSC) in 1999 and the Nirmal Bharat Abhiyan (NBA) in 2012, which in 2014 evolved into the current SBM. The programs evolved from a pure focus on constructing new private household latrines (under the CRSP), to the introduction of Information, Education and Communication (IEC) activities around sanitation and the provision of financial awards to Open Defecation Free (ODF) villages (under TSC). The NBA program further introduced the concept of community-led total sanitation (CLTS), as part of the education and communication activities on sanitation.<sup>3</sup> Much like NBA, the SBM program involves two key components: (i) Information, Education and Communication activities on sanitation; and (ii) the provision of financial incentives to vulnerable groups (detailed below) to encourage the construction of private household toilets. The primary aim of the IEC activities is to increase demand for private household toilets. The financial incentive, henceforth subsidies, form the most important component of the SBM program: 97 percent of the SBM budget was spent on the subsidies in the Financial Year 2015-16; with the remaining 3% devoted to funding the IEC activities (Kapur and Deshpande, 2018). Relative to the NBA, the SBM program revised and expanded the subsidy program. In particular, the SBM brought in a change in the government funding structure and the subsidy amount was increased from Rs. 10,000 to Rs. 12,000 (USD 169) for every new latrine.<sup>4</sup><sup>_,_5</sup> Monitoring and transparency mechanisms were significantly strengthened through the development of an online publicly available data portal which tracks progress towards India ODF status (see Section 3).

The aim of the subsidy is to encourage households to construct a toilet, rather than to cover the full cost of a toilet (SBM, 2017), which is why it is often rather referred to as an ‘incentive’. The subsidy follows a ‘renumeration after verification’ model. Households are expected to bear the cost of toilet

> 3The NBA program in 2012 adopted a more systematic behavioral change and sanitation demand creation strategy, implemented through the information provision intervention ‘Community-Led Total Sanitation’. The concept of CLTS was developed around the year 2000 in Bangladesh. CLTS became an established approach around 2011 and by 2015, 24 countries had adopted CLTS as their national strategy to eliminate open defecation (Musyoki, 2016).

> 4Specifically, 60% of the SBM subsidy costs are now to be covered by the central government and 40% are to be covered by the State government.

> 5We use an exchange rate of 1USD = 71.1840 Rs. throughout the paper when US$ amounts are reported, based on the following online currency converter, accessed on 10 Feb 2019: https://www.xe.com/currencyconverter/convert/?Amount=12%2C000&From=INR&To=USD

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