Decision Making Basics /
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Q79
2012,
Decision Making Basics
You are involved in setting up a water supply project in a remote area. Full recovery of cost is impossible in any case. The income levels in the area are low and 25% of the population is below poverty line (BPL). When a decision has to be taken on pricing you would.
Option D: Recommend that the users pay a charge based on the consumption of water with differentiated charges for non-BPL and BPL families. тЧП Understanding the Context: The project is set in a remote area with low income levels, and 25% of the population is below the poverty line (BPL). Full cost recovery is not feasible, so the pricing strategy must balance affordability and sustainability.
тЧП Evaluating Options:
тЧЛ *Option A*: Recommending free water supply for all might seem equitable, but it could lead to unsustainable financial practices and misuse of resources. It doesn't encourage responsible water usage. тЧЛ *Option B*: Charging a one-time installation fee while offering free water usage could be a burden for low-income families, especially those below the poverty line. It also doesn't promote conservation. тЧЛ *Option C*: Imposing a fixed monthly charge only on non-BPL families while offering free water to BPL families might seem fair, but it doesn't account for varying water usage levels and could lead to inefficiencies. тЧЛ *Option D*: Charging based on consumption with differentiated rates for BPL and non-BPL families ensures that everyone contributes according to their usage and ability to pay. This approach promotes responsible water usage and ensures that the financial burden is distributed more equitably. тЧП Conclusion: Option D is the most balanced approach, as it considers both the economic constraints of the population and the need for sustainable water management. It ensures that water is accessible to all while promoting conservation and financial viability.