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Towards Smarter Service Provision for Smart Cities: Accounting for the Social Costs of Urban Service Provision

India is one of the fastest growing countries in the world and urbanisation is both a challenge and an opportunity for India with huge implications for the rest of the world. One critical concern for India’s urbanising future is the provision of basic urban services for all its citizens. Using a social cost accounting (SCA) methodology, this research estimates the market and non-market costs associated with the delivery of urban water, sanitation, transport and energy services in 4 case study cities. This study goes beyond typically studied issues of access to services and the direct costs involved and brings attention to ignored social costs such as indirect costs, health costs and environmental costs. One of the highlights of this study is that despite high levels of coverage in the four cities, the quantity and quality of services are inadequate in many respects, especially in the case of water and transport, and have high associated social costs.

Key Findings

Executive Summary

As one of the fastest growing countries, urbanisation has emerged as an opportunity and a challenge for India with huge implications for the rest of the world. One crucial issue in India’s urbanising future is the provisioning of basic urban services for its citizens. Through case studies of four Indian cities, this work examines the current unmanaged growth (business as usual urbanisation) and the costs associated with it.

Using a social cost accounting (SCA) methodology, it estimates the market and non-market costs associated with the delivery of urban water, sanitation, transport and energy services.

The study goes beyond often discussed issues of access to services and the direct costs involved and emphasises attention to often ignored social costs (indirect costs, health costs and environmental costs). Each type of service provision is categorised into public, private and self-provision across the three sectors and explored further.

The study highlights that despite high levels of coverage in the four cities, the quantity and quality of services are inadequate in many respects, especially in the case of water and transport, and have high associated social costs.

This work makes three key recommendations for India’s urban future:

  1. use of social cost accounting to plan services;
  2. integrated service planning to generate efficiencies across sectors and
  3. leverage new models for service provision and entrepreneurial schemes

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