Water supply and sanitation in India continue to be inadequate, despite longstanding efforts by the various levels of government and communities at improving coverage. The situation is particularly inadequate for sanitation, since only one of three Indians has access to improved sanitation facilities (including improved latrines). While the share of those with access to an improved water source is much higher than for sanitation (86%), the quality of service is poor and most users that are counted as having access receive water of dubious quality and only on an intermittent basis. As of 2003, it was estimated that only 30% of India's wastewater was being treated, with the remainder flowing into rivers or groundwater. The lack of toilet facilities in many areas also presents a major health risk; open defecation is widespread even in urban areas of India, and it was estimated in 2002 by the World Health Organisation that around 700,000 Indians die each year from diarrhoea.
The level of investment in water and sanitation is relatively high, but the local government institutions in charge of operating and maintaining the infrastructure are weak and lack the financial resources to carry out their functions, partly due to very low tariff levels.
In particular in sanitation, innovative approaches have been initiated to increase especially rural sanitation through community-led total sanitation that emphasizes demand for services and community action instead of supply-driven programs of latrine construction by the government. In rural water supply, the focus has also shifted away from supply-driven to demand-driven approaches.