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Cash Rewards Boost Rural Sanitation in South Asia

Governments in South Asia are using innovative financial incentives to ignite positive sanitation and hygiene behavior changes in rural communities. The region is showing the way on well-designed subsidies that provide incentives for change, enhance a sense of empowerment, increase productivity, and create better living spaces.  

Financial Incentives Drive Change 

Innovative financing strategies are marking a shift from subsidy-led toilet provision toward the promotion of open defecation–free (ODF) villages.  The focus is on awareness generation to target community-wide action, toilet use as opposed to open defecation, and hygiene behavior change.Key ingredients of a successful financial incentives program include:
  • Significant upfront funding for social mobilization, awareness raising and market development to achieve sustained behavior change -- crucial for creating an ODF environment.
  • Clear alignment of government policies and implementation strategies with authorities performing a facilitating role.
  • Cash incentives to reward villages that have achieved targets, backed by robust monitoring.   
The Government of India launched a national-level fiscal incentive program in 2004.  Popularly known as Nirmal Gram Puruskar, (Clean Village Award) the program rewards villages for achieving 100 percent sanitation at the collective level.  Importantly, it creates incentives for community approaches in meeting sanitation targets. In the third year of the program almost 10,000 villages have applied for the award.  The pioneering effort, however, came from the State of Maharashtra, which launched state-level competitions for the cleanest district and sub-district in 2001.  In the first year of the program, an impressive 33,000 out of 42,000 Gram Panchayats (local governments in rural areas) took part in the competition.  The program is now an annual occurrence with an outlay of US$1.4 million*.In Tamil Nadu, the ‘Clean Village Campaign’ launched in 2003 with an outlay of US$174,000, created a competition among districts based on outcomes in solid waste management, drinking water provision and quality, water conservation, and health and social welfare indicators.  By 2006 over 500,000 people lived in villages that were awarded under the national NGP.   

The Ripple Effect 

Bangladesh and Pakistan have embarked on comparable strategies of financial incentives to improve sanitation.  In 2004 in Bangladesh, the government declared ‘Sanitation for All by 2010’ as its national target and adopted a reward scheme for communities that achieved ODF status.  The national government earmarked 20 percent of annual development budget to promote sanitation, releasing funds for the first time directly to the local government units in the form of cash rewards for ODF.

In Pakistan, the recently-approved National Sanitation Policy describes ‘Community-Led Total Sanitation’ as one of its basic principles and offers rewards for outcomes as incentives for Tehsil Municipal Administrations to create ‘Open Defecation Unions’—a step toward achieving the MDGs.  These strategies promote rewards at multiple stages and are found to be more effective in moving the village toward meaningful achievements in household and environmental sanitation.* US$ 1 = INR 43.04 (as of April 03, 2007) Conversion rates are from www.xe.com; all conversions are approximate. 

The Indian Experience

The Government of India launched a national-level fiscal incentive program in 2004.  Popularly known as Nirmal Gram Puruskar, (Clean Village Award) the program rewards villages for achieving 100 percent sanitation at the collective level.  Importantly, it creates incentives for community approaches in meeting sanitation targets. In the third year of the program almost 10,000 villages have applied for the award.   The pioneering effort, however, came from the State of Maharashtra, which launched state-level competitions for the cleanest district and sub-district in 2001.  In the first year of the program, an impressive 33,000 out of 42,000 Gram Panchayats (local governments in rural areas) took part in the competition.  The program is now an annual occurrence with an outlay of US$1.4 million*.In Tamil Nadu, the ‘Clean Village Campaign’ launched in 2003 with an outlay of US$174,000, created a competition among districts based on outcomes in solid waste management, drinking water provision and quality, water conservation, and health and social welfare indicators.  By 2006 over 500,000 people lived in villages that were awarded under the national NGP.  
Contact Name: 
Soma Ghosh Moulik
Contact Email: 
wspsa@worldbank.org