Most major Indian cities are cracking at its seams. More and more people keep pouring into these cities each passing day. More and more vehicles tread our rickety-rackety roads each passing day. The so-called urban transportation system is nearing an imminent apocalypse. But wait, that is not the irony. Yes, our beloved government has been, for a while, forming some half hearted measures to ‘curb’ the pullulating of the motored beasts. Even that doesn’t qualify as irony in our political context. The real irony is that the Indian politico-economic model is totally contradictory with the measures that are being attempted by the policy makers. Ever since the 1990s liberalization, India has been moving towards the individual-centric capitalistic economy where spending drives the essential cogwheels of the nation. But now our government is mooting various schemes that will discourage people from spending on private vehicles. As a manifestation of this profound paradox, our Urban Development Minister, Jaipal Reddy in a recent press conference, urged the states to enforce measures like congestion tax on private vehicles to discourage car buyers. Now, doesn’t that qualify as irony?
Congestion tax/pricing has been followed in some cities around the world for a while now. Widely admired cities like London, Milan and Singapore have implemented Congestion tax with some success. The concept of Congestion tax looks fair and equitable on paper: people should be forced to pay for any incumbrance they cause to others. It is also an effective way to deal with demand-supply imbalance in case an increase in supply is not plausible. But it has also sparked a fair amount of criticism. Like any other tax, it is allegedly detrimental to local commerce and economic activity in general. Our enterprises wouldn’t agree more. The immediate effect would of course be a slump in the sales of the shopping malls, bazaars and all kinds of shops that have sprouted in the densest pockets of the cities. Congestion tax would obviously mean lesser footfall for these places which capitalizes on the spending spree of the rising middle class. The more profound impact will be for the Automobile industry, its auxiliaries and finally its-trigger-happy-offshoot the Auto-finance companies. For years now, as financial sector became more and more sophisticated, the auto finance companies have been collaborating with Automobile manufacturers to lure more and more people to spend their money on vehicles. Getting an auto-loan has never been easier; all you need is a job in a recognized organization. The financial funda doesn’t stop there. The plot just gets thicker: tax savings on loan repayment, fuel allowance, company leased car and the list goes on. So the cost of owning and using a car is often offset by the monetary ‘help’ rendered by the industry.
In an increasingly individual-centric society of ours where restriction and regulation is often seen as an infringement upon the people’s rights and freedom, congestion tax is a difficult enough idea to sell. To make matters worse, Jaipal Reddy was audacious enough to call the upper class as a “car-crazy” lot. “Car is a status symbol in the country and this state of car mania can be done away with only in a subliminal way and not by the government,” Reddy remarked. Well, we can see his desperation. But are our public transport systems strong enough to pull the people away from the comfort of the four wheelers? The cost of using a private vehicle is far greater than the cost of using public transport even without the congestion tax. On the wake of this, the proposed duty exemption for public buses will only make public transport marginally cheaper and the congestion tax might only make private cars marginally dearer. When the choice is between a jam-packed wobbly bus and an air-conditioned car, will we not go for the latter even if it comes at a cost? Public transport has to become more accessible and highly available if it has to offset private transport; without which, it is difficult to discourage car users even with an exorbitant congestion tax. Congestion tax and other similar measures can only make sense if the public transportation is beefed up to remove the hassles that plague the system now. Shouldn’t the government do that first before making people pay for their incumbrances?
Image Source: [http://farm1.static.flickr.com/171/380379732_8d3a32beab.jpg]