Living on the Edge and Paying for it: A Study in Sanjay Colony, Okhla Phase Ii, Delhi

44 Pages Posted: 7 Nov 2006

See all articles by Aditi Dimri

Aditi Dimri

University of Warwick

Amiya Sharma

Centre for Civil Society, New Delhi

Date Written: July 15, 2006


The aim of this paper was to conduct a survey among residents of an unauthorized settlement in Delhi, and calculate the poverty premium (if any) being paid for a basket of services comprising water, power, education, health, sanitation, housing, and finance. Poverty premium here is defined as the differential between the real cost of a commodity paid by the urban poor and the formal market price paid by more affluent residents. This real cost includes both the actual price of the commodity, as well as hidden costs like cost of access, opportunity cost etc.

The survey, conducted with a structured questionnaire, made use of a sample of 95 households selected through stratified random sampling. It was found that with inadequate and inefficient government provision of services, and in the midst of illegality and surrounding issues, residents in Sanjay Colony are paying a premium - either qualitative or quantitative or both - for most basic services.

In the case of water, residents incur a heavy quantitative as well as qualitative premium. At Rs 45 per kilolitre, the premium comes to 4-7 times when compared with the city's Water Board tariff. Credit is another huge issue. Not deemed creditworthy by banks, residents are dependent upon local moneylenders. Their rate of simple interest (10% per month), imposes a penalty which is ten times the rates charged by banks. Loans at short notice can be obtained only at 15% per day. As regards sanitation, even with three public toilet complexes in the vicinity, only 15.7% people prefer to use them due to a host of problems. For primary health care, 84% visit local doctors/quacks. Accessibility and procedural hassles at government hospitals make 54% of the residents opt for private treatment despite financial constraints.

Thus, despite being located in the country's capital city, slums in Delhi are often relegated to the periphery when it is a question of access to basic services.

Keywords: Sanjay Colony, poverty, premium, water, slum, Delhi, survey

Suggested Citation

Dimri, Aditi and Sharma, Amiya, Living on the Edge and Paying for it: A Study in Sanjay Colony, Okhla Phase Ii, Delhi (July 15, 2006). Available at SSRN: or

Aditi Dimri (Contact Author)

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Amiya Sharma

Centre for Civil Society, New Delhi ( email )

K - 36
Hauz Khas Enclave
New Delhi, KwaZulu-Natal 110016
91-11-26537456 (Phone)

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