Access to safe drinking water remains one of the most economically consequential development challenges facing urban India, with the household-level cost burden falling unevenly across socioeconomic strata. The present study examines the economic implications of unsafe drinking water among households in Vijayawada, with special reference to differences between slum and non-slum households in water access, defensive expenditure and health-related costs. The study is based on primary data collected from 210 households, using a structured household interview schedule, comprising 90 slum households and 120 non-slum households drawn from selected wards across the city. The analysis focuses on the primary source of drinking water, perceived quality of drinking water, monthly expenditure on water purchase, monthly expenditure on household water treatment, monthly health expenditure due to waterborne illnesses and the total water-related economic burden as a percentage of monthly household income. Descriptive statistical tools such as percentage analysis were used for data interpretation. The findings reveal that slum households have substantially lower access to municipal piped supply and rely disproportionately on public taps and tanker water, perceive their drinking water quality as significantly poorer and incur a markedly higher incidence of waterborne illness costs. Non-slum households invest considerably more in defensive expenditure on treatment technologies but record lower health expenditure as a consequence. The total water-related economic burden as a share of monthly household income is sharply regressive, with more than one-third of slum households spending in excess of 10 per cent of their monthly income on water-related costs compared with less than eight per cent of non-slum households. The study concludes that unsafe drinking water functions as a regressive economic burden that disproportionately constrains the welfare of poorer urban households in Vijayawada.