The missing emphasis in Auto Show: Buses and Public Transport

It is interesting that Mumbai launched its monorail just as Delhi-ites were getting ready for the 2014 Auto Show. Both projects, one for public transport, and another for private, show lopsided priorities.

The monorail’s initial run is in the central Mumbai suburbs from Chembur to Wadala and is ultimately slated to end in south-central Mumbai’s Jacob’s Circle. The suspicion is that this monorail, and the four others planned, are more intended to cater to real estate interests rather than the genuine commuter needs of Mumbai: where the monorail will carry a few thousand people from the underpopulated suburbs that realtors want to develop, the suburban Western and Central Railways carry over seven million people daily. (Read this insightful story from scroll.in to understand why they are saying this).

Mumbai functions largely on a north-south axis, and most of the new monorails and metros are intended to connect the east-west axis - when buses would have been a more cost-effective solution. If you want to speed up the north-south axis, the easiest thing to do is to build new underground trains right below the main arterial Western and Eastern Express highways. If you want to connect South Mumbai to cheaper urban housing, the best thing to do is to develop land on the mainland opposite South Mumbai and connect it with several trans-harbour bridges. But this is not being done precisely because it would dent land values in South Mumbai.

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On the other hand, we launch an Auto Show that will induce people to buy more cars and personal transport vehicles (two-wheelers included) that will only make urban life worse in all metros. Don’t get me wrong: I am not against cars or bikes. They are great things to own and use on weekends with families and also for transporting the well-heeled. Also, a robust and viable automotive industry is vital for a country’s growth.

The point though is that we have to simply prioritise public transport - and the kind of projects now being thought of do not quite do that. While the Delhi metro and other metros are vital as city lifelines, it is buses and other forms of public transport - taxis, autos, quadricycles, minimuses, AC buses - that are really short of investment. The advantage of these forms of public transport is that they can use existing infrastructure even while decongesting roads by reducing the use of personal transport. Also, they can be quickly deployed, whereas metros and monorails are likely to disrupt current traffic and are notorious for cost over-runs.

More than an Auto Show, what India needs is a show for all kinds of public transport - and policies to back this up.

As we noted at the time of the last Auto Show in 2012, between two-wheelers and four-wheelers (cars and SUVs), India puts out over 14 million personal transport vehicles every year. This means over 1.1 percent of India’s population is buying its own set of wheels every year.

In Mumbai, Delhi, Chennai, Bangalore, and most mini metros, municipal corporations are unable to maintain roads in line with the growth in the automobile population, making driving a stressful and hazardous affair.

While no one actually question the need for much bigger investment in public transport, the policy stance adopted actually ends up promoting private transport at the cost of public ones.

This is how policy discriminates in favour of private transport.

One, on the plea that we need to move towards a unified value-added tax system, taxation on cars and two-wheelers has been consistently brought down over the last decade.

Two, most cities prefer to levy a one-time tax at the time the vehicle is bought on the ground that this is simpler to administer. This is economically unsound, since most vehicles are used for at least five years, and sometimes for more than a decade. The one-time vehicle tax is thus regressive - and pro-rich.

Three, two-wheelers are often levied a lower tax on the ground that they are driven by the middle class. However, the fact is that two two-wheelers need as much road space as a car - especially given their faster speeds - when they are on the move. Only when they are parked do they occupy less space. In many cities, two-wheelers face no city tolls - again, for no economic logic. The point is: private transport ought to be taxed, and public transport has to be cross-subsidised, if required..

Four, the sheer growth in vehicular traffic makes mass public transport systems less viable. When you build metros in cities choked with cars and bikes, the cost of building a metro goes up since there is less space and time available for digging and construction during daytime. Metro projects invariably exceed cost estimates for this reason. Put another way, private transport is making public transport unviable.

So what is the remedy?

In order to promote public transport, five things are vital.

Automobile taxes and other charges should be annual, and not one-time. The excise and sales taxes also need to be significantly higher. Conversely, taxes on buses and people carriers of various sizes should be at the lowest taxation slabs.

• Cars should be taxed based on the number of miles they run, or the number of crowded areas they ply in. RFID (radio frequency ID) chips implanted in cars can tell you how many miles a car has run every month and road charges should be levied like electricity bills every month depending on usage. The principle: the more road you use, the more you pay.

• Taxation should be inversely related to fuel efficiency and polluting potential. The higher the fuel-efficiency, the lower the tax. The higher the pollution, the higher the tax.

• The above can be achieved by making annual automobile taxation rise during the life of a vehicle. Taxes should vary depending on the age of the vehicle - a lower tax for vehicles in the 0-3 years range, a bit higher for the next three years, and much higher after that. After 10 years, all vehicles should be scrapped or retested for pollution and minimum fuel-efficiency. This policy, combined with tax rebates for scrapping, will mitigate any reduction in automobile demand due to higher taxation. Not only that, it will provide a boost for the auto industry by increasing demand for wheels.

• In overcrowded metros with low road spaces (Mumbai, for example), cars and two-wheelers should be banned during peak hours on the main trunk routes. Car usage should be restricted to, says, 8pm to 8am, with public transport getting pride of passage during the workday. This policy should be preceded by a very large induction of buses of various sizes to cater to every need: AC buses, regular buses, standees-only buses for short distances, minibuses, and minivans (for low-traffic graveyard shift hours).

Let’s admit it, for a poor country, we have goofed up badly on automobile policy. We have adopted the wrong priorities. The next Auto Expo should focus on public transport, not cars and SUVs.