The sanitation component of the Jalanidhi addresses the issues related to sanitation, hygiene and second generation sanitation issues mostly solid and liquid waste management. As part of solid waste management the project supported installation of household level pipe composting units, biogas plants, vermin composting units etc. till November 2015 and since then to focus on more critical community oriented waste management and sanitation, HH level components for solid waste management was discontinued, but included individual HH toilets.

The restructured sanitation components include demonstration of environment friendly toilets for water logged and rocky terrains; public toilets; pay and use toilets; biogas plants; composting units; septage treatment plants; liquid waste management systems and biodegradable waste management. The financial outlay is 8.05 Cr for the B3 component that support technical assistance required, and 50 Cr for the C3 component that support the physical works.