d not on the needed maintenance. Water Aid (2005) has estimated that the annual financing need for domestic water and sanitation is some USD 5.05 billion but that only USD 2 950 million is actually being spent, leaving a funding gap of USD 2 100 million. However, a serious problem in most developing countries including India is the failure to utilise the budgets already available; often these are some 30-65% of the actual budget. Based on preliminary estimates, meeting the MDG target in urban areas would require an investment of USD 21.8 billion up to 2017 and recurrent expenditures of about USD 21.1 billion over the same period. In the rural areas the figures would be USD 16.5 billion and USD 15.6 billion respectively. It is unclear what these figures imply for the financing needs for water services over the coming decades. A preliminary estimate has been arrived at by using these figures and making some assumptions (Table 5.13). This total in Table 5.13 is 0.71% of GDP. While this shows a certain consistency with other country estimates above, it is conjectural and a first order estimate. It does, however, indicate the scale of the financing challenge facing the country, given its current levels of expenditure. The potential for collapse in groundwater for irrigation from the current over-abstraction may also require significant investments if alternatives are to be developed. An obvious option is to better collect monsoon rains, either in river networks or using other local storage options. Investment costs would be substantial; one estimate of the former approaches USD 200 billion. Needs in INFRASTRUCTURE TO 2030: TELECOM, LAND TRANSPORT, WATER AND ELECTRICITY - ISBN 92-64-02398-4 © OECD 2006 5. THE IMPACTS OF CHANGE ON THE LONG-TERM FUTURE DEMAND FOR WATER SECTOR INFRASTRUCTURE Table 5.13. Estimated annual investment needs in India USD millions Rehabilitation of New infrastructure MDG urban MDG rural Total existing infrastructure investment areas areas Capital investment 4 600 4 140 1 370 11 930 Operational 