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

As one of the world’s fastest growing countries, India is facing both opportunities and challenges presented by rapid urbanisation. How India responds will have major implications for the country’s development and 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.

It estimates the market and non-market costs associated with the delivery of urban water and sanitation, transport and energy services, using a social cost accounting (SCA) methodology. Going beyond often discussed issues of access to services and the direct costs involved, this paper draws attention to often ignored social costs (indirect costs, health costs and environmental costs).

The study highlights that despite high levels of coverage in the four cities studied (Surat, Pune,Indore, Bangalore), 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: 

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

Cities must assess their resource consumption (particularly water and energy) and revisit the current service provision models in order to improve sustainability and reduce social costs of service provisioning.

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