Question

Given below item describes a situation and is followed by four possible response. Indicate the response you find most appropriate. Choose only one response for each item. The responses will be evaluated based on the level of appropriateness for the given situation.

Please attempt the item, there is no penalty for wrong answer for these items.

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...

1. Recommend that the supply of water be free of charge in all respects.
2. Recommend that the users pay a one time fixed sum for the installation of taps and usage of water be free.
3. Recommend that a fixed monthly charge be levied only on the non-BPL families and for BPL families water should be free.
4. Recommend that the users pay a charge based on the consumption of water with differentiated charges for non-BPL and BPL families.

Answer 1

Correct Answer - Option 4 : Recommend that the users pay a charge based on the consumption of water with differentiated charges for non-BPL and BPL families.

Situation: 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.

Analysing the options

Statement	Correctness	Reasoning
Recommend that the supply of water be free of charge in all respects.	Incorrect	It may lead to irrational use of water and wastage of water which may be a scarce resource in that remote area.
Recommend that the users pay a one time fixed sum for the installation of taps and usage of water be free.	Incorrect	Many BPL families may not take the water connection. Free usage of water may lead to irrational use of water and wastage of water which may be a scarce resource in that remote area.
Recommend that a fixed monthly charge be levied only on the non-BPL families and for BPL families water should be free.	Incorrect	This would be unfair to non BPL families. Also fixed monthly charge will be unjustified use as the size of family may differ. A huge joint family and a nuclear non BPL family would pay same price irrespective of the amount of water used.
Recommend that the users pay a charge based on the consumption of water with differentiated charges for non-BPL and BPL families.	Correct	It would be the most appropriate course of action. It would lead to justified use of water which may be a scarce resource in that remote area.

 Hence, the correct answer is  'Recommend that the users pay a charge based on the consumption of water with differentiated charges for non-BPL and BPL families.'