I've never been to India, but I did live in Central Africa for two years working on water/sanitation projects. The situation in Africa is clearly worse, but the two are comparable. The thing is that water quality and sanitation just are not directly tied to growth - as we've seen, India's done just fine without a strong focus on public health in their domestic policy. The impetus for better sanitation has to come from people themselves who see basic sanitation as a part of their quality of life. In the West, we never pursued sanitation issues for economic reasons, but rather because it was a basic demand people had of their local officials.
Does this demand not exist as strongly in Indian communities? Or is the local officialdom simply dysfunctional? (I imagine both are the case to some extent.)
Yes, I think it's a bit of both. The main issues are education and poverty. People in the rural areas are completely unaware of the health hazards of open defecation and improper sanitation. They just don't know. Poverty adds to this. When you wake up in the morning thinking where to find my next meal - quite frankly, sanitation is not on your mind. The officialdom of course exploits the situation. Sanitation is not a priority on any election agendas. The officials rather lure people with free or low cost food, rations etc.
How do people feel about pay-for-use schemes for water supply -i.e. private potable water systems piped to paying users?
In rural areas, this idea might not fly. As I mentioned earlier, the reason is abject poverty. I'm not saying every villager is poor, but on a large scale this idea might not be successful. There are some villages where people use bottled water in a limited way but then again even bottled water is also contaminated.
In urban areas, the pay-for-use schemes will definitely be successful. It's just that people have portable filtering systems in their homes. So if a cost effective solution for large scale filtering can be provided - I don't see why the idea can't be successful.
In the land of the night, the chariot of the sun is drawn by the grateful dead