The dream 1-lakh car of the Tata's is once again in the news. And no, this is not because of any farmer unrest. The MMRDA chief, Mr T Chandrasekhar has proclaimed that he will be the first to file a PIL against the launch of the car in Mumbai. The theory behind it being that the sudden spurt in car traffic would completely throw the city's (already stretched) transport infrastructure out of control. The reactions to this have been quite predictable. Tata's have retorted that the public should be given the right to choose whats good for them, while the state government has distanced itself (evidently to avoid any controversies) from the statements, saying that the government cannot come in the way of aspirations of the citizens.
At first glance, it appears as though the MMRDA is trying to solve the wrong problems. Instead of providing better roads and transport infrastructure, it is throttling people's ambitions and dreams of owing a car. But, on giving the issue a deeper thought, there is indeed some merit in the argument that a slew of small cars (not just Tata's, but there are atleast three other players aiming to launch such cars) will spell doom for our cities. Consider this:
Assume that the price of the car which the Tata's will finally launch would be Rs 1.3 lakh (as the press is reporting - though the company is feverishly working towards the Rs 1 lakh target)
Now, the second assumption is that people generally buy a car whose price is about 30-50% of their annual income.
Third, the minimum price point in the Indian car market is around Rs 2.5 lakh (Maruti 800 not withstanding).
Fourth, assume that the 1.3 lakh car is fully functional and has all that any self-respecting basic car should have.
Now, because the entry price point is being brought down by almost half (from Rs 2.5 lakh to Rs 1.3 lakh), consider the income segment that will come under its spell. Individuals with a minimum income of Rs 2.5 lakh will also consider buying the car (and will no doubt be helped by attractive loan schemes). Now, tell me, who has an annual income of Rs 2.5 lakh ??? My estimate is any engineering grad joining a software company has (atleast in a year's time, if not starting). Every morning, there are several dozens of buses leaving Andheri station to SEEPZ full of such recently joined software engineers. Now lets suppose that each bus is replaced by 25 odd such '1.3 lakh cars' (assume only half of the bus and imagine what it will do to the already chaotic traffic conditions there. And forget Mumbai, consider some of the other places. Anyone who has been to Bengaluru bears testimony to the poor traffic infrastructure there. And many more grads move to Bengaluru every year than to Mumbai. Imagine the state there. And this is only about one section of the potential takers of the new 'dream' car. I am sure there will thousands of relatively more affluent shopkeepers, small-time businessmen etc who would also want to be a part of the car-owners club. Now one might argue that such a car boom and the subsequent traffic chaos might actually spark off infrastructure improvements at a much faster rate. But we do not seem to have learnt the lessons from 26 July 2005 and 11 July 2006. So what guarantee that this will lead to infrastructure reforms ? And the Tata's seem to have overestimated the maturity of the average Indian consumer in saying the people should be given the right to choose. Also note that I have not even talked of parking space here. Where is the parking space for thousands of such cars ? I remember when I was in school, almost the entire open space between our building and the society's compound wall was ours to play (many a great game of cricket has been played there ;). By the time I went to college, cars had gobbled up the space. Then, they started spilling out on the street outside. I am not too sure that today's children have any such place to call their own. No wonder they are forever glued to the television set and their regular doses of cartoons.
In summary, while any legislative effort at curbing people's freedom to choose might be improbable, the only hope atleast a small fraction of the potential car-owners might stop to think about how their decisions will affect the quality of life in our cities.
Cheers
Amit
Assume that the price of the car which the Tata's will finally launch would be Rs 1.3 lakh (as the press is reporting - though the company is feverishly working towards the Rs 1 lakh target)
Now, the second assumption is that people generally buy a car whose price is about 30-50% of their annual income.
Third, the minimum price point in the Indian car market is around Rs 2.5 lakh (Maruti 800 not withstanding).
Fourth, assume that the 1.3 lakh car is fully functional and has all that any self-respecting basic car should have.
Now, because the entry price point is being brought down by almost half (from Rs 2.5 lakh to Rs 1.3 lakh), consider the income segment that will come under its spell. Individuals with a minimum income of Rs 2.5 lakh will also consider buying the car (and will no doubt be helped by attractive loan schemes). Now, tell me, who has an annual income of Rs 2.5 lakh ??? My estimate is any engineering grad joining a software company has (atleast in a year's time, if not starting). Every morning, there are several dozens of buses leaving Andheri station to SEEPZ full of such recently joined software engineers. Now lets suppose that each bus is replaced by 25 odd such '1.3 lakh cars' (assume only half of the bus and imagine what it will do to the already chaotic traffic conditions there. And forget Mumbai, consider some of the other places. Anyone who has been to Bengaluru bears testimony to the poor traffic infrastructure there. And many more grads move to Bengaluru every year than to Mumbai. Imagine the state there. And this is only about one section of the potential takers of the new 'dream' car. I am sure there will thousands of relatively more affluent shopkeepers, small-time businessmen etc who would also want to be a part of the car-owners club. Now one might argue that such a car boom and the subsequent traffic chaos might actually spark off infrastructure improvements at a much faster rate. But we do not seem to have learnt the lessons from 26 July 2005 and 11 July 2006. So what guarantee that this will lead to infrastructure reforms ? And the Tata's seem to have overestimated the maturity of the average Indian consumer in saying the people should be given the right to choose. Also note that I have not even talked of parking space here. Where is the parking space for thousands of such cars ? I remember when I was in school, almost the entire open space between our building and the society's compound wall was ours to play (many a great game of cricket has been played there ;). By the time I went to college, cars had gobbled up the space. Then, they started spilling out on the street outside. I am not too sure that today's children have any such place to call their own. No wonder they are forever glued to the television set and their regular doses of cartoons.
In summary, while any legislative effort at curbing people's freedom to choose might be improbable, the only hope atleast a small fraction of the potential car-owners might stop to think about how their decisions will affect the quality of life in our cities.
Cheers
5 comments:
TATA should've come up with an alternate plan and offered it to the Govt, something that MIGHT actually stop these probs from becoming a reality due to the car boom (infrastructure, traffic and parking space, not to mention pollution).
But I won't be surpsrised that TATA doesn't care a damn what happens to the roads or general traffic. Even they're probably just thinkin of filling their already fat pockets.
I belive we are addressing the wrong problem. The problem is not proliferation of cars, but lack of good public transport system. In developed world nearly everyone owns a car, but if you look at the percentage of people driving to office in their own car its tiny. Reason there is a good option available in public transport, which is comfortable, realiable and economical.
Car is a luxury good and it should be so. If by bringing the car Tata's are bringing the luxury within reach of whole mass of India its a good thing.
Government and agencies associated with government should do their jobs properly first.
Two point solution for traffic congestion:
1) Build a good, comfortable, rapid and on time mass transit system
2) Tax for usage of road every time the road is used, the way it is done in Singapore. What it ensures is that people will use car only when they feel that the benefit/pleasure derived out of a car ride is more then the tax/toll they are paying for the road use.
Mind you both the things have to work together, you can't just tax the people without providing them with a viable alternative. And just providing viable alternative without tax is not good for exchequer. But then which govt gives away money, so it won't happen
This is the classic economics problem. There is a "commons" called city road. And there is individual gain by getting a car (this imposes a cost on commons in the form of congested road).
Now addition of a single car will cause just a slight increase in the congestion of road (hence a very low cost to the person who buys the car) but the upside (comfort of personal vehicle) will be much bigger. So all people have incentive to buy a car.
But if everyone buys a car then the city roads will be clogged and no one will be able to enjoy his or her car. (this is similar to the choice of dates in "a beautiful mind" but i don't know how to apply Nash's solution in this case)
The problem can be solve with dhanno's advice...
namely making use of a public transport a better option for commuters.
Dhanno wants to provide a public transport system and then wants to use disisentives(danda) for use of cars.
I want a public transport system that is faster, less hassels, more comfortable and cheaper than use of personal cars...
I don't want any coercion by imposing taxes and tariffs (they all cause inefficiencies)
When travelling by mass transport will make economic and comfort sense then people will automatically use public transport ..
agree fully with dhanno. its a simple economics problem. stopping the sale of cars would be an old soviet / Nehruvian style solution, (and look where that led the soviet union). even if the 2 actions mentioned by dhanno are not implemented (because of lack of resources, will etc) it would soon become economically unviable to waste time on congested roads, and other solutions will emerge (walking? helicopter services? more likely flexi time at companies, residence sharing close to commercial clusters for working days, relocation of workplaces to less congested areas etc etc)
I too am in agreement with the fact that public transport should improve (and not just because I use it everyday) .. and to the extent that people commuting to office should not even look at their cars while leaving their residences in the morning... there was such an attempt made a few years back with the AC buses... really sad that those did not work out :(...
But regarding the other point about a car being a luxury good, i too buy it. Cars should be treated as luxury goods. But with the general prosperity around, more and more people are buying it and hence the luxury and status associated with it are slowly dissappearing...
Of course, coercion or legislation regarding sale of cars cannot and will not work (and not for a moment am I supporting Mr Chandrasekhar's PIL), which is why I have mentioned that people at large should be more aware of the larger picture..
Post a Comment