Comparison of the Costs and Benefits of the Clean India Mission

GUY HUTTON, NICOLAS OSBERT AND FRANCIS ODHIAMBO

UNICEF

SANITATION AND HYGIENE not only have major consequences for dignity, disease risk and the environment when not practised properly, they also cut to the very heart of economic development. The World Bank estimated the value of the impacts of inadequate sanitation in India equal to $53 billion (Rs 2.4 trillion) in the year 2006, equivalent to 6.4 per cent of India’s GDP in the same year (World Bank, 2011).

Prime Minister Narendra Modi launched the Swachh Bharat Mission (SBM) and announced on 2 October 2014 that India aimed to be Open Defecation Free (ODF) within five years. Given India’s sheer size and diversity, this was an uphill task, unparalleled in history, making SBM the world’s largest ever sanitation campaign. In 2015, 59 per cent of rural households and 12 per cent of urban households in India did not have a sanitary toilet, leaving 522 million people still practising open defecation nationally (World Health Organization and UNICEF, 2017).

In a study we (UNICEF) worked on in 2017, we measured the major costs and benefits of the campaign after three years of implementation to draw conclusions about its return on investment. Benefit-cost model inputs were obtained from household surveys in the twelve largest Indian states where open defecation was practised at the time, along with drawing on other national surveys and research literature. Costs included household and Government investments and household operational costs for the toilet and handwashing facility. Benefits included reductions in medical costs and mortality associated with diarrhoeal diseases, productive time saved from fewer diarrhoea cases and having to find a place to defecate, and an increase in the value of property.

A tailored household survey for the purposes of this study was implemented in rural households across 12 states from 20 July to 11 August 2017. The final sample frame consisted of 1,57,853 villages from 2,317 blocks across the states.

The study showed the interventions under SBM are highly cost-beneficial: annual benefits of $727 (approximately Rs 50,000) per household are from health-related savings (55 per cent) and from sanitation access time savings (45 per cent). Over 10 years, the benefit-cost ratio (BCR) – the number of times the overall benefits exceed the overall costs of sanitation across the selected households – is 1.7 (household financial perspective) and 4.0 (societal perspective), considering all costs and benefits with universal toilet use in ODF communities.

The Benefit-Cost Ratio

Cost-benefit analysis (CBA) was used to compare the costs and benefits of SBM’s intervention with those had the households not built a private toilet. BCRs were presented under two scenarios, comparing those households with versus those without private toilets at home: (a) including only financial costs and financial benefits to households, in order to assess direct cash impact at the household level; and (b) including full societal costs and benefits, to understand how cost-beneficial the intervention is from the overall use of society’s resources. Our study sought to answer whether investments in SBM over the period 2014–17 have been cost-beneficial to the households who built the toilets and to society at large, and to conclude how SBM can further enhance its gains.

Costs included both investment and operational costs for a household toilet and a handwashing station. It was recorded how these costs were financed, such as whether from Government-delivered hardware subsidies, resources provided by non-state actors or by the households themselves from their income, savings or a loan (as reported by the households). Costs included expenditures for behaviour change and social marketing activities, construction materials, paid labour, other fees as well as non-financial costs, which principally included household time investments in construction and maintenance. Operations and maintenance (O&M) costs such as soap, water, cleaning, pit emptying and repairs were included when reported by households, and estimated on an annual basis. Cost estimates were annualized assuming a ten-year lifespan of the toilet and adding O&M.

Benefits included were the health impact, the time use (time lost or saved in accessing toilets) and the increase in property value from construction and use of a household toilet. The impact on households’ property value from having a toilet was estimated in consultation with the head of the household.

Meanwhile, health economic benefits were estimated assuming 47 per cent reduction in diarrhoeal morbidity and mortality from sanitation and hygiene interventions (Andres et al, 2014). In communities where the rate of toilet use was found to be less than 100 per cent – for instance, 85 per cent as found in the survey – the reduction in disease rates was estimated at 33 per cent (Andres et al, 2014). The morbidity benefits were monetized as the savings in medical costs incurred for the treatment of gastrointestinal diseases (doctor fees, laboratories, travel expenses, medications) and the savings in lost time of the patient and caretakers. Time saved was monetized at minimum wage rate under the national employment guarantee scheme for adults and half that wage rate for school-going children. The benefits from the reduced mortality rate were monetized using the value of a statistical life in India (Shanmugam, 2011).

Annual benefits of having and using a household latrine under SBM were estimated by summing the annual value of health and time savings, and then adding the estimated property value rise reported by the chief wage earner at the end of the ten-year period.

Results

Benefits

The annual benefits from health and time savings equal $727 (Rs 50,000) per household per year. Figure 1 shows that overall a significant share (55 per cent) of the annual benefits are from health savings with the rest (45 per cent) being sanitation access time savings. The average medical cost per episode of diarrhoeal diseases at any type of health facility was $63, which is saved when an episode was averted. The average duration of an illness episode was 1.8 days with an average 1.34 health facility visits per case. Of the savings in lost time in illness and caretaking, 52 per cent of the value accrued to the patient and 48 per cent to the caregiver. Substantial health benefits were due to the reductions in premature death, valued at $249 per year per household. The value of time savings – notably for accessing a toilet located by the house – is on average $325 per household per year. While only a proportion of time savings is likely to be used for income-generating activities, saved time still has value and can be used for things such as school work, subsistence activities and leisure; hence the contributions of a household toilet to the household economy are potentially significant.

Figure 1. Annual benefits (below) and one-off benefits (above) of owning and using a latrine and handwashing station

The investment in a toilet is perceived to contribute positively to the value of the property, with an average rise in property value of $294, which is about 5 per cent of the reported property value of the house.

Intangible Social Benefits

Figure 2 indicates that there is an overwhelmingly positive response on the intangible benefits of having an improved household toilet. At least 80 per cent of households strongly agreed with the convenience benefits of a toilet (e.g. for menstruating women, for the elderly, during rainy periods); over 85 per cent strongly agreed that it is safer for girls and women; 85 per cent strongly agreed with the benefit of privacy; and over 80 per cent strongly agreed with the status or prestige of owning a toilet, thus highlighting the aspiration of owing a toilet, a core principle of SBM focusing on behaviour change.

Figure 2. Intangible benefits of owning a toilet as perceived by households

Costs versus benefits

The BCR under the household financial perspective is 1.7 when toilet usage is 100 per cent, reducing to 1.1 at 85 per cent toilet use. Under the societal perspective, the benefits exceed costs four times (for 100 per cent toilet use) and three times (for 85 per cent toilet use). SBM’s benefits are equitable from the societal perspective as the BCRs are higher for poorer households. For the poorest households, the BCR is 5.7 for households in ODF communities and 4.2 times for households in non-ODF communities.

Other economic measures shed further light on the performance of the intervention. The overall population-level annual rate of return on the financial investment is 31 per cent, which is well above what households would earn from putting their money into a bank savings account. For the poorest households, the financial annual rate of return is higher at 65 per cent. The net financial return on the household expenditure on the toilet and handwashing station (total benefit minus total cost over ten years) averages $296. The average payback period for the household financial investment is two years for all households, and one year for poorer households.

When the average lifespan of a toilet was increased from ten years in the base case to twenty years in an alternative scenario – a reasonable assumption for the households owning a twin-leach-pit toilet (63.6 per cent of sampled households), and the model promoted under SBM – the financial BCR increases to 2.1 and the societal BCR increases to 4.4.

Conclusions

This study has shown that the sanitation and hygiene interventions adopted under SBM resulted in major increases in new toilet ownership and usage, and are highly cost-beneficial in rural India, more particularly for the poorest households. Investments in sanitation deliver a high return, both from household and societal perspectives, and deserve prioritized contributions from public funds.

When interpreting these results, it should be understood that the value of benefits can be significantly greater than the estimates in this present study as several potential benefits were not included: sanitation value chain (e.g. reuse value of urine and excreta as compost and/or energy), tourism value and improvement in water quality. Moreover, social benefits were assessed qualitatively in the study, which indicated there are many beneficial social impacts of owning and using a toilet, over and above the health and time savings (Figure 2 ). However, even with the limited set of benefits and costs included in this analysis, the study findings strongly justify investments in sanitation and hygiene.

The study also indicates that the impact of SBM is dependent on the extent to which the entire community adopts sanitation and hygiene practices, and the sustainability of both the infrastructure and behaviours.

The most recent household survey on sanitation, the National Annual Rural Sanitation Survey (NARSS) 2018-19, conducted by an independent verification agency under the World Bank support project to the SBM-Grameen, has found that 96.5 per cent households in rural India who have access to a toilet use it. While these figures are reassuring, efforts are needed to sustain the intervention from both hardware (physical infrastructure) and software (behaviour change) perspectives. Indeed, UNICEF field experience globally shows compelling evidence that it takes time to achieve and sustain behaviour change for toilet usage to become a social norm.

For the past twelve months, anticipating this issue, the Government of India and its partners, including UNICEF, have been working on an ‘ODF Plus’ phase of the sanitation programme, looking at ODF-Sustainability through: continuous behaviour change, leaving no one behind/reaching universal access, retrofitting toilet technologies (the study found that about two-thirds of households had a twin-pit and most of the remaining had a septic tank), and solid and liquid waste management.

This phase is crucial to make the best of this unprecedented sanitation drive. Key stakeholders must remain fully mobilized and adequately funded for the full returns on investment to be enjoyed.

Considering the significant financial investments, the high level of political leadership, the people’s participation including that of children (as the campaign was developed as a people’s movement, a jan andolan), the broad partnerships, notably with academia, the private sector and development partners, SBM is an inspiring and impactful model of Sustainable Development Goals in action. Such programmes are critical to meet health-, education-, gender- and environment-related objectives.

For the full report on this study (UNICEF, 2018): http://unicef.in/Uploads/Publications/Resources/pub_doc20172.PDF