India’s economy hinges on improved transportation

By Shi Lancha Source:Global Times Published: 2018/5/15 22:13:40

Illustration: Luo Xuan/GT


According to the Central News Agency, a report by Boston Consulting Group shows that traffic jams in four major Indian cities (New Delhi, Mumbai, Bangalore and Kolkata) cause annual economic losses of 1.47 trillion Indian rupees ($21.81 billion). Traffic congestion is also a huge obstacle to India's industrial transformation and economic development.

India's economy has grown rapidly over recent years, and the level of development in some areas has increased significantly. But why is the traffic still so bad? The problem has many causes.

The first cause is poor urban planning. India does not have a household registration system, and the central government has no restrictions on population movements. Land is privately owned, so any site that's been in use for a long time is regarded as being owned by the user. Most land in cities can be used freely by farmers, who go to cities to make a living. This has led to an urban population boom and transportation problems.

The second cause is a serious shortage of transportation infrastructure. In 2015, India had about 90,000 kilometers of highways, but fully sealed sections made up only about 1,000 kilometers.

Many roads are full of potholes, keeping driving speeds below 20 kilometers per hour.

There are also serious overloading problems and frequent accidents on railways and highways. India's inadequate transport infrastructure has failed to keep up with demand sparked by rapid economic growth.

The third cause is cultural inertia and weak awareness of traffic rules. Religious beliefs involve many animals such as monkeys and cows, which wander freely on the roads. Drivers and pedestrians often circle around these animals or simply wait for them to pass. This has also led to the inefficiency of India's transportation.

It can thus be seen that the causes of traffic jams in India are manifold, complex and deep-seated. It will take much time to find solutions, but in the meantime, traffic problems hinder economic development.

India must improve its urban planning. Its first-tier cities have grown much faster than urban areas as a whole. The main reason is that India's urban planning system has an inverted pyramid structure, which is reflected in unbalanced development.

India must also expand its transportation infrastructure. It has already announced many projects and plans for this purpose. Last year, India approved the Bharatmala infrastructure development plan involving investment of $107 billion to upgrade more than 83,000 kilometers of road within five years.

However, due to difficulties in land acquisition and lack of funds, transportation infrastructure projects in India often develop slowly. Plans aren't enough; India needs to mobilize more international forces and integrate its own resources to accelerate infrastructure projects.

India should also continue to promote reform. India's reforms have borne fruit in recent years. For example, the goods and services tax (GST) reform, the largest tax reform since India was founded, unified the chaotic intrastate and interstate sales taxes.

This generated real public benefits, eliminating tedious formalities and time-consuming taxation, and it improved the efficiency of freight transportation. More reforms like this should be introduced.

The efficiency of the transportation system is reflected in long-distance logistics costs, which affect bulk commodities and people's travel costs.

To some extent, it affects the foundation of economic development.

Although the growth model of the Indian economy is not driven by the manufacturing and industrial sectors, economic growth will be difficult without solving transportation problems.

India, don't let traffic jams tie your legs!

The author is a Beijing-based economic commentator.


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