Drinking water system in Kerala can be broadly classified into two categories.  The first one is the schemes owned and operated by the state government through the Kerala Water Authority and local governments. Second one is family managed drinking water supply which includes individual families creating their own drinking water resources by constructing wells on their house compounds and managing the water supply source by themselves (SEUF 2000). Family managed drinking water supply system in Kerala has a substantial role in the water supply scenario especially in rural areas. The provision of piped water supply in rural areas is the responsibility of the state government and funds have been provided in the state budgets right from the commencement of first five year plan. National Water Supply and Sanitation programme was introduced in social welfare sector in 1954. The states gradually build up the Public Health Engineering Departments to address the problems of water supply and sanitation. In 1972 - 73, Government of India introduced Accelerated Rural Water Supply Programme to assist the states and union territories with 100 percent grants in aid to implement schemes in problem villages. As a part of it, in 1970s, more than 450 piped rural systems were launched in Kerala. During 1980s, as part of the drinking Water supply and Sanitation Decade Programme, several projects were launched with the support of bilateral and multilateral agencies. The history of organized piped water supply in rural Kerala dates back to the beginning of twentieth century. Over the years, the organisational set up for the implementation and management of water supply schemes had undergone several changes. Kerala Water Authority (KWA) came into existence on 1st April 1984 in the place of the erstwhile Public Health Engineering Department of the Government of Kerala.

Kerala Water Authority (KWA) is one of the main agencies for the design, construction, operation and maintenance of water supply and sewerage schemes in the whole state. KWA has been implementing piped water supply schemes based on surface and groundwater sources. It also executes multilateral and bilateral funded projects and accelerated rural water supply schemes on behalf of the government of India. As per Economic Review, 2003 KWA was operating 63 urban and 1700 rural water supply schemes. Among the rural water supply schemes, 607 were multi-panchayat and 1093 were single panchayat schemes. Two hundred and twenty four urban and rural water supply schemes were under different stages of implementation, of these, 182 were rural and 42 were urban water supply schemes (State Planning Board 2002).

The public sector experience over the last two decades revealed that the efforts of one agency alone would not be sufficient to meet the drinking water needs of the state especially in the rural areas within a definite time-frame. The new democratic initiatives in the state, ‘peoples plan campaign’ along with the constitution’s 73rd and 74th Amendments provided a firm footing for the decentralized planning process in the state. The State government devolved powers to local governments to initiate new water supply schemes. Following the structural adjustment programme in the national economy and implementation of neo liberal policies, public investment in necessary services has declined. The new policy approach comprises decentralized administration and collaboration between state, NGOs and Civil Society movements provided far reaching consequences in the state regulated economic approaches. As part of these initiatives Kerala Rural Water Supply and sanitation Agency, NGOs, Community organizations, etc., have subsequently entered into the water and sanitation sector.

A survey conducted by Rajiv Gandhi National Drinking Water Mission revealed that in Kerala, out of 9763 drinking water habitats, 21.5 per cent have been fully covered with piped water and 70.5 per cent are partially covered by January 2003. 8.01 per cent habitats are Non-covered. In Kerala piped water is provided to 204 lakh people, who constitute around 64 per cent of the total population as on July 2003. It shows that 59 per cent of the rural population and 79 per cent of the urban population are covered under the piped drinking water. Among the water supply connections in Kerala domestic users are more compared to non-domestic and industrial users. NSSO report on Drinking water (1999) shows that population covered under piped water supply is merely 11.5 per cent, which is much lower than the Kerala water authority estimates. If tap, tube well and hand pumps are considered as the only potable source, following the norms of government of India, drinking water coverage in Kerala is very inadequate.

NSSO report shows that the position of Kerala is far below than the other Indian states in the case of piped water supply. Percentage of the household having sufficient drinking water throughout the year is also low in Kerala compared to all India and other major Indian states. If sufficiency of drinking water throughout the year also takes into consideration, the coverage of piped water supply in Kerala is merely 8.78 per cent. But, a majority of the household in Kerala traditionally depended on open wells for their household water supply needs. NSS data show that, over 85 percent of the households in Kerala depended on well water for their domestic needs. However, among the people depending on well as principal source nearly 59 per cent are getting sufficient water through out the year. It is in Kerala highest percentage (30.4) of household reported for insufficiency of drinking water in some part of the year. These 30.4 percent households had to find alternative sources of water supply for their domestic water needs. This seasonality in water availability was an important dimension of water supply problem in Kerala. Besides, among the dependants of well around 51 percent households were obtaining water at their household premises. Hence, people were forced to spend considerable time in fetching water.

Wastage of water produced and distributed by Kerala water authority ranges around 40 percent. The quantity of water produced and water sold in rural and urban area and per capita supply of piped water is given in Table 7. CAS study (2000) revealed that wastage in water production was very high in Kerala compared to other cities.

Table 7: Production and distribution of water by Kerala water authority in 2001

Alternative forms of water supply schemes existing in the state were community managed. Community management in drinking water supply recently emerged as an alternative to the prevailing institutional set up. All the community managed schemes in the state are funded by either central government or external agencies. External agencies include World Bank and Royal Netherlands Embassy. Jalanidhi is the community water supply schemes initiated in the state with the help of World Bank. In 1999, for implementing the World Bank assisted Rural Water Supply project, the Government has set up the Kerala Rural Water & Sanitation Agency (KRWSA). As per data collected on 2004, KRWSA covered 80 panchayats in the four northern contiguous districts of Kozhikode, Malappuram, Thrissur and Palakkad. The project is covering the areas drained by the Bharathapuzha and the following smaller basins: Chaliyar, Kadalundi, Keecheri, Puzhakkal, Kuttiadi, Korapuzha, Kallai, Tirur and Karuvannur. The main feature of 17 the World Bank assisted program is that the community meets a part of the project cost, implements the project and becomes the owner of the water supply scheme.