Prohibitive cost of basic services

Heavily subsidized public providers often produce urban services inefficiently. They have little incentive to be cost-effective or to respond speedily to changing conditions. Heavy subsidies in urban infrastructure often fail to result in services accessible to the poor. For example the poorest members of urban society do not use the most expensive forms of transport, as in the case of the Calcutta metro which is not designed to serve the lowest income groups. The absence of infrastructures leaves most villages in developing nations without the essential services which have become necessary for effective participation in the realities of contemporary society. The cost of obtaining well-drilling equipment and large storage tanks is presently beyond the family income of many villagers, although houses may have water tanks to contain the rainwater. Few springs and wells are sufficiently close to be ready sources of water; villagers depend on rainwater when it is available or have to make long journeys for water. They are also far removed from adequate fire protection or water for firefighting. The distance from one house to another makes the possibility of electrical installation from a private utility company unaffordable for most village families. Public transportation is costly; fares are high because of fewer passengers and less freight; and high freight costs discourage industrial development.