The liberalization fix to Delhi’s demonic traffic

The liberalization fix to Delhi’s demonic traffic

The Commonwealth Games in New Delhi are just four months away, and residents of India’s capital city are bracing for more traffic nightmares as players and guests from at least 40 countries pour into town. The city already contends with crumbling public transportation and mind-numbing traffic jams. National and state governments have opened their wallets to meet the growing costs, arguing this will help realize the Capital’s long-term infrastructure needs.

This is the triumph of hope over experience, especially when it comes to the wisdom of the government’s urban planners. Take Delhi’s Metro rail system, built over the past five years with the help of Japanese contractors. It is being completed mostly on time, and within budget. Yet demand always exceeds capacity, because of perpetual shortfall in coaches. Many admirers have resumed use of their own vehicles.

The public sector bus system isn’t much better. Delhi Transport Corp. reportedly makes more money idling buses than running them. It is acquiring a glittering fleet of modern vehicles, but the process is slow, and no one knows how the fleet will be maintained. Privately licensed operators are mostly in the hands of small-time mafia bosses. Those buses make headlines more for their accidents and fatality rates than their service.

Then there are examples from the theatre of the absurd. Take, for instance, a one-way flyover on a route that connects one of the highways to the international airport. Its opening led to such chaos that the authorities had to reverse the direction of traffic, with the explanation that the traffic pattern on that stretch of road had changed drastically in the two years the flyover was under construction.

This is by no means an isolated incident. Two years ago, a 20km stretch of highway connecting Delhi to Gurgaon was expanded to eight lanes and opened with a 32-gate toll plaza. The day the road was inaugurated, the traffic flow exceeded the projection for 2014. Today, on a typical working day, it takes more time to queue up and pay the toll than to drive through that stretch of highway.

Urban planners brush off these problems by blaming unrestrained population growth and an explosion in unlicensed private transportation. They focus on limiting the supply of vehicles. In a city of 15 million, there are around 10,000 permitted taxis, 50,000 three-wheeled automobiles and a few thousand cycle-rickshaws. Unofficially, there are around 38,000 taxis, 75,000 three-wheelers and 100,000 rickshaws, thanks to the high costs of running legal transportation. The vehicle density is around 10 per 100 people—high compared with the rest of India, at one per 100 people.

But congestion on the road is not just a function of the number of vehicles, but also of the quality and amount of road space and the efficiency of road use. Delhi’s streets are no more congested than main streets in small towns across India.

The misguided focus on the number of vehicles has meant that every transportation policy seeks to restrict the entry of vehicles. Consequently, the supply of transportation falls much short of demand. There are layers of licences and permits regulating the operation of private buses, taxis and automobiles, which apart from breeding corruption, perpetually restricts supply. What’s more, taxes on petrol, and vehicles are among the highest in the world, all aimed at reducing personal forms of transport. This has retarded the technological innovation and added to pollution and congestion.

So citizens turn to the private sector. Thousands of vehicles ply Delhi each day, without authorization, to meet the demand, while contributing millions of rupees to the kitty of road transport officials and the traffic police, whom they have to pay to be allowed to operate.

There has been one small step in the right direction: A few months ago, the Delhi high court, in a landmark judgement, nullified the licence raj that had hobbled the cycle-rickshaw industry in the city. By licensing its numbers to absurdly low levels, municipality officials, traffic police and the rickshaw mafia ruled the streets, depriving citizens of an affordable means of transport.

The decision to liberalize the cycle-rickshaw trade should be extended to all forms of public transport. Even better, Delhi’s authorities could ditch the idea of regulating tariffs for licences altogether. Entry barriers should be drastically reduced, if not eliminated. The government could privatize the traffic police, who are rewarded for their number of bookings, rather than quality of work.

These moves would have several advantages. First, they would legalize existing informal service providers. Second, they would allow more organized operators to benefit from scale of operations. This may incentivize many individual operators to merge and compete for clients on the basis of price and quality of service. Third, they would improve the policing of the system, too.

These suggestions aren’t as radical as they may seem. With the advent of private radio taxis, there has been a marked improvement in the service of many small and informal taxi operators.

The Commonwealth Games are the biggest event India has hosted in years. Rather than asking people to stay at home during the celebrations, or forcing those who can afford to leave town to do so, simple changes in traffic and transportation rules could help improve the quality of life for all of Delhi’s residents.

The Wall Street Journal

Barun Mitra is director of the Liberty Institute, an independent thinktank in New Delhi.

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