The Valuation is Based on Social Benefit Cost Analyisis

Background
The Swachh Bharat (Clean India) Mission (SBM) launched in October 2014 is the world’s largest sanitation campaign. Our aim was to estimate and compare major economic costs and benefits associated with sanitation improvement achieved during three years of SBM from households’ financial and economic perspectives and a broader societal perspective.
Methods of Valuation
Cost-benefit model inputs were obtained from household surveys in the twelve Indian states that once contributed to over 90 percent of open defecation in India, published literature and secondary data. Monetized costs included household financial and time investments in building and maintaining toilets, and government’s investments on subsidies and campaign activities. Monetized benefits included reductions in medical costs and mortality associated with diarrheal diseases, productive time saved from fewer diarrhoea cases and accessing outside defecation options, and increase in the property value of having a toilet. Probabilistic uncertainty analysis assessed the combined effect of key modelling assumptions and sampling errors in the inputs to the cost-benefit model.
Findings
Investment costs average US$ 396 per latrine and average annual operational costs are US$ 37 (financial) and US$ 94 (time costs)1. Annual benefits of US$ 727 per household are mainly from savings associated with reduced diarrhoea incidence (55%) and from sanitation access time savings (45%). The estimated Benefit-Cost Ratios (BCRs) are 1.7 (household financial perspective), 4.5 (household economic perspective) and 4.0 (societal perspective) under Open Defecation Free (ODF, corresponding to 100% toilet coverage and usage) scenario. However, under partial-ODF scenario with 85 percent toilet use rate, the BCRs are 1.1, 3.3 and 3.0, respectively. Probabilistic uncertainty analysis shows that the financial BCRs under the partial-ODF scenario can reduce to 0.7, but societal BCR will remain
Interpretation
This study shows the sanitation improvements under the SBM are highly cost-beneficial, more when communities are free of open defecation with all households using private improved sanitation facilities. Future SBM investments must ensure not only sustaining the universal toilet coverage and usage, but also ensure safe faecal waste management so that households continue to enjoy full benefits of sanitation.

Costs per wealth quintile
Costs of implementing SBM(G) at household level are summarized as follows:
1. Financial costs paid by household from own funds. On an average: INR 9,942 (US $154) was the outof-pocket contribution of those receiving government support, and INR 29,900 (US $463) by those not receiving any government support, thus averaging INR 16,262 (US $252) across all households. Spending on operations and maintenance (O&M) costs averaged INR 2,359 (US $36) per year
2. Financial investment from the government, received by households. 70 per cent of sampled
households reported to have received support for capital investment. The financial incentive to these households averaged INR 11,800 (US $183) per household, or an average of INR 8,199 (US $127) per household across all households obtaining toilets. In addition, the average software cost is estimated at INR 249 (US $4) per household (which is an upper value based on maximum of 2 per cent of total subsidy of INR 12,000 (US $186) being used for information, education and communication activities).
3. Non-financial costs covered by household include time in building, cleaning and maintaining the toilet Time is valued at the rural wage rate of INR 250 (US $4) per day.

Benefits per wealth quintile
The study considered four types of benefit that accrue to households from having a household toilet and using it. A fifth type, reuse/recycling of excreta and organic waste, is also expected to provide an important benefit, but it has not been possible to quantify with sufficient robustness for this present
1. Medical costs averted: financial savings from paying less medical costs based on reductions in illness episodes (average INR 8,024 (US $124) per household per year).
2. Value of time savings: reduced time lost from sickness and seeking a place for open defecation
(average INR 24,646 (US $382) per household per year)
3. Value of saved lives: economic value of saved lives due to lower mortality rates
(average INR 17,622 (US $273) per household per year).
4. Property value: INR 18,991 (US $294) per household was estimated as the average increase in
property value from having a toilet. In the cost-benefit analysis, a one-off cash benefit of this value is
assumed to accrue at the end of a 10-year period.
Cost-benefits per wealth quintile
When costs and benefits are compared over a 10-year time period7 , and when 100 per cent of households in a community use a toilet, the financial savings exceed the financial costs to the household by 1.7 times, on average
Highlights
This study reports the first economic analysis of the Clean India Mission (SBM).
Annual economic gains from household sanitation are worth US$727 per household.
The average price paid for a toilet is US$396, which is double the subsidy received.
Financial returns on household spending over 10 years is 1.7 times the cost.
Returns to society on total spending over 10 years is 4.3 times the cost.
The poorest have a financial return of 2.6 and societal return of 5.7 times the cost.

Note : Please Note for The Data SBM is Presented is Not for Examination

The Valuation is Based on Social Benefit Cost Analyisis