There has been no hard empiricalevidence to confirm or reject the hypothesis that watersubsidies may be failing to reach the poor. This papersummarizes the results of some new survey-based researchthat estimates that estimates the value of the water subsidyreceived by individual households in two South Asian cities,and also estimates the income levels of these households.Using both pieces of information together, it is possible toevaluate the extent to which subsidies are actually reachingthe poor. The analysis shows that about three quarters ofthe subsidies available to water utilities in the cities ofBangalore and Katmandu are delivered in a way whichcompletely fails to reach the poor.