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<b>Bharat Jhunjhunwala:</b> Taxing traffic tangles

With traffic jams commonplace in metros and limited land available for making more roads, a congestion tax is the only solution

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Bharat Jhunjhunwala
Last Updated : Jan 20 2013 | 12:41 AM IST

The automobile industry is one of the engines of the Indian economy. We are manufacturing a large number of cars today. Simultaneously, traffic jams are now commonplace in all metros. The purpose of the automobile revolution was to make travel fast and convenient. But what is happening is the opposite of this. Time taken in travel is increasing because cars cannot move due to congestion. People are reaching their destinations unnerved and uptight because of long hours spent in solitary confinement. Recently, this writer had an occasion to travel to three metros. Travelling from Howrah station to Ballygunge in Kolkata took an hour; from K R Puram to Basavanagudi in Bangalore took one and a half hours and from Nizamuddin to Karol Bag in Delhi took two hours. Only three years ago, the same journeys could be completed in one-third of the time. Just like overeating causes stomach sickness, excessive number of cars causes traffic sickness. More importantly, traffic jams created by car owners impose a huge cost on hapless bicyclists, scooterists and even pedestrians. These poorer people waste their time on the road because the motorists have captured our roads. Yet, the same large number of cars adds to the statistics of growth rate. The number of cars sold and the amount of petrol burnt in traffic jams are counted as additions to the gross domestic product (GDP) of the country.

The situation is no different in other countries. A webpage on Australia’s traffic reads: “A hundred years ago, it took about one hour to travel from Paramatta to the centre of Sydney by horse and cart. Today, it takes longer by car.” Data provided by the Bureau of Transport and Regional Economics of Australia show that congestion costs — principally longer travel times — were set to double in Australia by 2020. Professor Matthew A Turner of the Department of Economics at the University of Toronto has conducted a study on the development of the highway system in the US. He writes: “In 2001, the average American household spent over two and a half hours (or 161 person-minutes) per day in a car to accomplish travel that required only 147 minutes in 1995. Multiplying by households and working days, we find that US households used about 5 billion more hours in 2001 than in 1995 to accomplish the same amount of routine daily travel.”

One suggested solution is to build more roads and flyovers. But, the number of cars keeps increasing and traffic jams keep coming back. Professor Turner says, “Adding 10 per cent more lane miles to a city increases vehicle miles travelled by 10 per cent. That is, in less than 10 years, new roads cause traffic increases directly proportional to the increase in capacity.” We can see this happening before our eyes everyday. A large number of flyovers have been constructed in all metros but traffic jams have continued to increase. Limited amount of land is available in the cities for making roads, flyovers and parking lots, but the number of cars that can be produced is almost unlimited. Therefore, the supply of cars increases to overwhelm the available road space.

The improvements in fuel efficiency have made things worse. The Ambassador car gave an average of 11 km per litre in the 70s. Present-day cars give 20 km per litre. This has reduced the cost of car travel. More people are using cars, causing an increase in traffic jams. The problem will only become worse if an average of 30 km is obtained from the newest models.

The finance minister has increased the price of petrol and diesel, and also the tax on large cars in the Budget. This is a welcome move. But this does not solve the problem of traffic jams because this price burden is like a drop in the ocean for urban car owners. The impact of this price rise on a city dweller driving 2,500 km would be about Rs 500 per month. Moreover, this expenditure is mostly tax-deductible for professionals and businessmen. The net payment, therefore, is a paltry Rs 350 or so per month.

Expansion of metro and bus services will not help either. Professor Turner explains: Increases in the supply of public transit operate in the same way as road capacity increases do. Every person who gets out of his/her car and onto a bus makes free some extra capacity on the road. In a few years, the road is again filled up to its initial level. Adding public transit, therefore, increases the total number of persons who are transported but does not reduce traffic congestion.

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The only solution to traffic jams, in that case, is to impose a “congestion tax”. Londoners have to buy a daily permit of GBP 8 to enter the city centre. Although this has not eliminated congestion, the situation would be much worse without such a tax. Similar taxes have been imposed in Stockholm, Seoul and Singapore, and have shown good results. Similarly, we should impose an “entry fee” of Rs 1,000 per day for entry of cars into specified areas of the metros. Even government vehicles should not be exempt and the charge should not be reimbursed by the departments. Reduction in the number of government cars was a significant contributor to the easing of traffic congestion in Seoul. Metro and bus networks should be expanded along with the imposition of this congestion tax. That will provide a cheaper and quicker mode of transport to the people. Just as rich New Yorkers prefer to take the subway instead of driving into the city, so also rich Indians will take Volvo busses to the Writers’ Building.

However, care should be taken while implementing such a congestion tax. It is reported that the City of London has collected a massive 800 million pounds through this tax. But most of the collections have been spent in the administrative expenditures of the police. Therefore, we must use modern electronic methods to implement this scheme and not allow the bureaucracy to usurp the collections.

The Hoda Committee, constituted by the Planning Commission, had given the same suggestion in its report of 2006. Other recommendations of the committee were: Increase in parking fees; increase in registration charges of cars; and collection of annual road tax on the basis of the size of the car or carbon emissions. These suggestions must be implemented forthwith. We should not waste precious time of the people for securing unreal GDP growth from the sale of cars and burning of petrol in traffic jams.

bharatj@sancharnet.in  

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First Published: Mar 25 2010 | 12:57 AM IST

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