Dr.

Sukumar Nandi
Indian Institute of Management Lucknow
 About me

• Sukuamr Nandi
• MA ( Economics), M.Phil. ( Econ) , Calcutta University
• Ph.D. ( Economics), Utah State University, Logan, USA
• Position:
• Professor of Economics, Dean ( Planning & Development),
• Chief Editor, METAMORPHOSHIS [ Journal of IIM Lucknow]

• Past position: Indian Institute of Foreign Trade, New Delhi;

• National Institute of Bank Management, Pune
• Vidyasagar University, WB;
Calcutta university [ Economics Department]
• Massachusetts College of Liberal arts, Mass, USA;
• Utah State university, USA

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 Importance of Transport

• Economic:
– Good transport provides a clear competitive edge providing;-
• Easy access
• Low congestion costs
• Good environment; so
– Efficient transport facilitates economic growth, BUT
– Congestion hinders business efficiency and impacts on regeneration

• Environmental:
– Efficient transport helps provide high quality of life and address climate change,
BUT
– Unmanaged transport causes air quality problems, noise and traffic accidents

• Sustainable communities:
– A good transport network enables equality of travel opportunity to all, BUT
– Lack of transport provides a barrier to social inclusion particularly in areas of
persistent social disadvantage and workless ness

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 Ideal Transport System

A fully integrated safe transport network which

supports social and economic regeneration and,
ensures good access for all which, is operated to the highest
standards to protect the environment and ensure quality of life

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 Transport
• A statutory requirement set within the framework of National
Priorities

• Removing Congestion
• Air quality and quality of life
• Accessibility
• Road safety
• Problems related to Climate change

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 Long Run Strategy
Manage for the growth of transport demand to provide
for the efficient movement of people and goods

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 Modern Transport System _ Dubai

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 Los Angeles Roadways

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 Los Angeles Highways

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 Some Recent Trend in Indian Context

• Some increase in population, esp. city centre

• More employment but new demands for travel opportunity, and
• Continuing problems of accessibility in areas of disadvantage
and workless ness
• Rising freight movement particularly to the port
• Increase in car ownership and use,
• leading to

• Rise in congestion levels and poor air quality

• Reduction in walking and bus use – health and obesity time bomb
• Increase in rail use leading to some overcrowding

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 How to Manage the city centre of Metro like Delhi

• The heart of the city region

• Main business district should have easy access
• Main economic growth area
• Growing importance of tourism
• Air Quality Management Area –
traffic levels largely responsible
• Forecast 10% traffic growth
to the metro in morning peak

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 How to manage Traffic in City Centre

• Aim to provide high quality environment for all users of the city
centre

– reduce traffic in core centre to

reduce vehicle speeds –
improving air quality for all
– avoid fast through traffic to ensure
a safe, friendly and historic city centre
– improve access to all parts of the
centre for all users - better signage
and road layout

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 How to Manage

• Managing traffic growth relies on

– Managing the road network
– Designated freight routes
– Managing parking demand
– Planning and development control
– Increase in quality of public transport – partnership with
operators crucial
– Promoting walking and cycling
• Using Travel Wise to work with employers to promote travel plans
for major businesses, health care sites and schools

• Developing links with key players like different Chambers of

Commerce and industrial houses

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 Plan
• Government of India___ Efforts
• National Urban Transport Policy
• Identifies the growing problem
• Recognizes constitutional devolution to the states
• but appreciates the importance of some central functions, the need
for technical advice
• and therefore, Advises on an issue by issue basis even, on state
functions

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 National Transport Policy
• The declared objectives
• A four pronged approach “to ensure easily accessible, safe, affordable
quick, comfortable reliable and sustainable mobility for all” to:
• reduce the existing levels of congestion
• reduce the impact of motor vehicles on air pollution
• improve road safety, and foster sustainable technologies

• National Urban Transport Policy-

• The identified issues
• Public vs Personal transport
• Ownership vs usage
• Public transport pricing
• Public vs private provision
• Technologies for public transport
• Choice of fuel and vehicle technologies
• Managing vehicles in-use
• Local planning
• Non-motorized transport
• Financing
• Institutional co-ordination

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 A Framework

Transport infrastructure improvement

Reduced distances Reduced congestion Other externalities

Cheaper, more reliable transport services

Logistical Facilities Location effects Value added

improvements consolidation effects

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 Transport and Rural Poverty

• There are, however, good examples from Asia where Yao (2003) has
documented the poverty reducing effects of rural roads in India and the
People’s Republic of China.

Xianbin Yao, Infrastructure and poverty reduction: Making Markets

Work for the Poor, May 2003, Asian Development Bank Bulletin

• The elasticity estimates measure the percentage changes of the

rural poverty incidence with respect to road infrastructure
investments, working through different channels.

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 Effects of Rural Transport on Poverty Reduction
India Peoples Republic of
Poverty Reducing China
Effects Rural Road Elasticity* % Share
Investment Elasticity* % Share
Direct effect through -0.0119 17.92 -0.0450 28.46
increase in agricultural
productivity
Direct effect through -0.0300 45.18 -.0417 26.38
increase in non-farm
employment
Direct effect through -0.0204 30.72 -0.0399 25.24
increase in rural wages
Indirect follow-on effect -0.0041 6.18 -0.0315 19.92
through higher
economic
growth
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Overall -0.0664 100.00 -0.1581 100.00
 Effects on Poverty Reduction

1991/92 1998/99 2005/06

80
68
70 64
59
60 52
Incidence (in percent)

50 46
39 39 38 40
40 35
30 29 29
30 23 25 24
17 17 19 20
20 13
11 10
8
10
0
Public Sector Private Private Export Food Crop Non-Farm Non- Ghana
Employment Formal Informal Farming Farming Self- Working
Employment Employment Empolyment
Main Economic Activity

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 Trend in Passenger Transport in Industrial Countries

Passenger transport

100%

80% Air
Waterborne
60% Tram, metro
Railways
40%
Bus/coach
20% Passenger car

0%
EU-15 USA Japan

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 Trend of Transport in Developed world

Motorization Level and Wealth in OECD Regions

1970-2000

900
Cars per 1000 inhabitants

800
700
600
500
400
300
200
100
0
10000 15000 20000 25000 30000 35000

GDP per capita (in 1995 US$ PPP)

USA EU-15 Japan

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 Modes of Passenger Transport in the USA

8000

7000
6000
5000
billionpkm

4000
3000

2000

1000
0
1970 1975 1980 1985 1990 1995 2000

USPass.cars USAviation Bus Railway

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 EUROPE : Modes of Freight Transport

1600
1400
1200
1000
Billiontkm

800
600
400
200
0
1970 1975 1980 1985 1990 1995 2000

EURoad EUShort-sea EURail

EUInlandwaters EUPipelines

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 Findings
The analysis of historic trends shows that road transport is the driving factor of
transport demand (for passenger and freight) from 1970 to 2000 in the
industrial countries

External costs of transport are high and mainly caused by road transport

Policy for decoupling has to focus on instruments addressing impacts from road
transport
Taxes based on distance driven and the environmental performance of vehicles
can encourage important modal shifts

They generate revenue for developing more environmentally friendly modes

The internalisation of external costs of transport leads to a decrease of

transport activities and to a further reduction of externalities

Policies for decoupling need to combine a package of instruments

including economic instruments and regulations

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