Abstract
Water utilities in Calcutta, India are historically subsidized. This has kept residents quite unfamiliar with the concept of volumetric pricing of water. But pricing strategies have recently been receiving attention and the charges regime appears to be in transition. However, pricing with the objective of full cost recovery may not be feasible or even desirable in the transitional phase. The purpose of the article is to formulate a water pricing principle by using consumers' willingness to pay (WTP). A contingent valuation study revealed that people were willing to pay a charge of Rs. 3.18 per kiloliter for a monthly average household water use of 12.59 kiloliters. Such a principle, which considers consumers' WTP, may neutralize the political and public resentment in the phase of transition and can be a base for full cost recovery in the future. Respondents also expressed an opinion that the poor should receive some support from the government and contribute a part for smooth functioning of the water supply system.
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