Shri Vile Parle KelavaniMandal’s

Narsee Monjee College of Commerce and Economics

(Autonomous)

A.Y 2023-24

Name of the Course: Economics Semester I

Title of the Project/Assignment :

Studying the impact of odd even formula in reducing the demand for private
vehicles in Delhi.

Submitted by:

Sr No Full Names of the Learners SAP ID Number Division/Roll no

1 Vedant Prasad Mhapne 45611230326 C-078

2 Shrey Shah 45611230215 C-083

3 Jinay Sheth 45611230166 C-082

4 Shaill Kumar Mishra 45611230665 C-081

Teacher In Charge
Prof. Kesia Varghese

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 Table of Content

Sr.no Content Page no.

1 Plagiarism Report(Attached in other pdf)

2 Introduction 3

3 Main Content 6

4 Data Analysis(Graphs-Charts) 10

5 Bibliography 14

6 Conclusion 15

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Introduction

The Odd-Even Rule in Delhi is a temporary traffic management strategy aimed at curbing air
pollution in the city. Implemented during specific pollution peaks, it mandates that on
alternate days, only vehicles with either odd or even-numbered license plates are allowed on
the roads. The rule was first introduced in January 2016 as a pilot program and has been
periodically reinstated during severe air quality crises.

This measure seeks to reduce vehicular emissions by promoting the use of public
transportation, carpooling, and other eco-friendly modes. The enforcement period typically
spans a few weeks, and the specific days for odd and even plates alternate. However, certain
vehicles, such as those running on CNG, electric vehicles, and two-wheelers, are often
exempt from the restrictions.

While the Odd-Even Rule has faced both support and criticism, it reflects the government’s
commitment to addressing the pressing issue of air pollution in Delhi. The effectiveness of
the policy is a subject of ongoing debate, with some praising its positive impact on air quality
during implementation, while others question its long-term sustainability and impact on
overall traffic management.

The air quality issues in Delhi have deep-rooted historical and contemporary factors.
Historically, rapid urbanization and industrialization, particularly since the mid-20th century,
led to increased vehicular emissions and industrial pollution. In the 1990s, a substantial rise
in population further strained resources and contributed to pollution.

The burning of agricultural residues in neighboring states during the post-monsoon season
exacerbates the problem. Additionally, the city’s geographical location, being landlocked and
surrounded by industrial areas, limits the dispersion of pollutants.

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In recent years, vehicular emissions, construction activities, and the use of fossil fuels for
power generation have remained prominent sources of pollution. Policy challenges,
inadequate waste management, and a lack of robust public transportation infrastructure also
contribute to the persistently poor air quality.

Efforts to address the issue involve a combination of regulatory measures, such as the
implementation of the odd-even vehicle rule, promoting cleaner technologies, and initiatives
to reduce crop residue burning. However, the multifaceted nature of the problem requires
sustained efforts and comprehensive policies to achieve significant improvements in air
quality.

The Odd-Even formula, implemented in Delhi, represents a pioneering initiative aimed at

curbing the escalating issues associated with vehicular pollution and traffic congestion.
Introduced as a short-term measure, this policy restricts private vehicles based on their
registration numbers – odd-numbered cars are permitted on certain days, while even-
numbered cars are allowed on others. The primary objective is to reduce the overall vehicular
density on the roads and subsequently mitigate the adverse environmental and health impacts
attributed to vehicular emissions.

Delhi, India’s bustling capital, has long grappled with severe air quality issues and traffic
snarls. The Odd-Even formula, first implemented in 2016, gained attention as a novel and
proactive approach to address these challenges. By regulating private vehicle usage, the
government sought to bring about a noticeable decline in vehicular emissions, particularly
during periods of heightened pollution levels. The implementation of such a measure reflects
the urgency to strike a balance between the convenience of personal transportation and the
imperative to safeguard public health and the environment.

The success of the Odd-Even formula hinges on its ability to induce a significant shift in
commuting behavior. As commuters adapt to the alternating restrictions, there is an
anticipated reduction in the reliance on private vehicles. This shift is expected to stimulate the

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use of public transportation, cycling, and walking – modes of commuting that are not only
environmentally sustainable but also contribute to decongesting the city’s thoroughfares.

Moreover, the Odd-Even initiative is emblematic of the government’s commitment to

exploring innovative solutions to tackle urban challenges. It serves as a model for other cities
grappling with similar issues, offering insights into the feasibility and efficacy of
unconventional approaches in urban planning and transportation management. The success or
shortcomings of this policy in Delhi are likely to set a precedent for the adoption and
adaptation of similar measures in other metropolises globally.

In the following paragraphs, we will delve deeper into the specific impacts observed during
the implementation of the Odd-Even formula in Delhi, assessing its effectiveness in reducing
the demand for private vehicles and addressing the multifaceted challenges posed by
vehicular pollution and traffic congestion.

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Main Content

1. Economic Implications of the Odd-Even Rule in Delhi:

The economic implications of the odd-even rule extended beyond immediate considerations,
aiming to alleviate the economic burden of air pollution. Reduced healthcare costs and
increased workforce productivity were expected to contribute to a more robust economy. The
policy envisioned long-term benefits by fostering a healthier and more active workforce,
potentially reducing absenteeism and associated economic losses.

2. Impact on Automotive Industry and Sales:

The initial dip in conventional car sales was accompanied by a notable surge in interest in
eco-friendly alternatives. This shift in consumer behavior indicated a changing market
landscape, with electric and hybrid vehicles gaining traction. The policy’s impact on the
automotive industry highlighted the potential for stimulating growth in sustainable and
environmentally conscious transportation technologies.

3. Changes in Fuel Consumption Patterns:

Altered commuting behaviors under the odd-even rule prompted a complex interplay of fuel
consumption patterns. While some experienced reduced fuel expenses through increased use
of public transport, others faced challenges, influencing demand for gasoline and posing
potential shifts in the conventional fuel industry. The dynamic nature of these changes
underscored the need for a nuanced understanding of the policy’s economic effects.

4. Toll Revenues and Road Infrastructure Funding:

The shift in traffic patterns had ripple effects on toll revenues and prompted a reevaluation of
funding models for road infrastructure. Innovative approaches were explored to ensure
sustainable financing for ongoing maintenance and development projects. This recalibration
of funding mechanisms sought to strike a balance between economic feasibility and the
imperative of maintaining robust transportation infrastructure.

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5. Employment Effects in the Transportation Sector:

Changes in the demand for private transportation services necessitated adjustments in the
transportation workforce. Training and re-skilling programs became essential components,
ensuring that the workforce remained adaptive to the evolving needs of the industry. This
approach not only sustained employment opportunities but also addressed the economic
vitality of the transportation sector.

6. Cost-Benefit Analysis of Odd-Even Policy:

The comprehensive cost-benefit analysis delved into the economic gains from reduced air
pollution, healthcare savings, and increased productivity. This holistic evaluation provided a
nuanced understanding of the financial impact of the odd-even rule. By weighing the tangible
and intangible benefits against implementation costs, policymakers gained insights into the
policy’s overall economic feasibility and sustainability.

7. Influence on Real Estate and Property Values:

The prominence of well-connected public transport in real estate dynamics highlighted the
economic shifts brought about by the odd-even rule. Areas with efficient transportation links
witnessed increased demand, impacting property values. This not only transformed urban
landscapes but also reflected an economic reshaping driven by the emphasis on sustainable
commuting patterns.

8. Assessing the Financial Burden on Commuters:

Examining the economic impact on individual commuters involved considerations of

expenses related to adopting alternate transportation modes, potential inconveniences, and
adjustments in personal budgets. This granular analysis provided insights into the policy’s
effects on diverse socio-economic groups, shedding light on the economic implications for
individuals and households.

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9. Public Transport Investments and Economic Returns:

Increased investments in public transport infrastructure aimed not only at immediate

improvements but also at long-term economic benefits. Enhanced connectivity contributed to
improved air quality and bolstered economic returns through increased efficiency in
commuting. The economic implications emphasized the integral role of public transport in
fostering sustainable economic growth.

10. Effects on Retail Businesses and Commercial Zones:

The influence of the odd-even rule on footfall patterns had tangible effects on retail
businesses and commercial zones. Businesses adapted strategies to align with changing
consumer behavior, exploring options such as e-commerce and reevaluating physical
locations. This adaptive approach to economic shifts underscored the resilience and flexibility
of businesses in the face of evolving commuting patterns and economic landscapes.

11. Evaluating the Odd-Even Rule’s Contribution to GDP:

Rigorous evaluation encompassed both direct and indirect impacts on Delhi’s GDP.
Reductions in healthcare costs, gains in workforce productivity, and the fostering of
sustainable industries were considered. While short-term disruptions were acknowledged, the
long-term contributions to economic well-being were highlighted, shaping the narrative
around the policy’s significance in the broader economic context.

12. Funding Mechanisms for Sustainable Transportation:

The shift towards sustainable transportation necessitated innovative funding mechanisms.

Public-private partnerships emerged as a viable option, along with exploring congestion
pricing models to generate revenue for continued investments in eco-friendly infrastructure.
The focus extended beyond immediate financial gains, aiming for a self-sustaining model
supporting the city’s long-term environmental and economic goals.

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13. Economic Disparities and Social Equity Considerations:

The policy’s economic impact was scrutinized through the lens of social equity. Measures
were taken to ensure that the odd-even rule did not disproportionately affect vulnerable
communities. Initiatives were implemented to provide support and address disparities,
emphasizing an inclusive approach to economic and environmental sustainability.

14. Implications for Insurance and Risk Management:

Evolving commuting patterns prompted a reassessment of insurance and risk management

strategies. Insurers adapted policies to account for emerging risks associated with sustainable
transportation. This period saw a shift towards policies that incentivized environmentally
friendly practices, aligning the insurance industry with the city’s broader goals of
sustainability.

15. Policy Recommendations for Economic Sustainability:

Culminating insights informed strategic policy recommendations. These encompassed a mix

of regulatory measures, incentives for sustainable practices, and targeted investments in green
technologies. The aim was to create a comprehensive framework that not only sustained
economic growth but also fostered an environmentally conscious and resilient urban
landscape for Delhi’s future. These recommendations aimed to strike a balance between
economic progress and ecological responsibility, offering a roadmap for continued prosperity.

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Data Analysis (Graphs-Charts)

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Bibliography

ARAI & TERI. 2018. Source Apportionment of PM2.5 & PM10 of Delhi NCR for
Identification of Major Sources. New Delhi: TERI

Down to Earth. 2015, Details available at https://www. downtoearth.org.in/news/air/how-

other-countries-are- experimenting-with-odd-even-system-52261

Government of NCT, 2015. Notification. New Delhi : Transport Department

HEI. 2019. State of Global Air. Boston, USA: Health Effects Institute

MoUD, GoI. 2016. Report of the High Powered Committee on Decongesting Traffic in Delhi.
New Delhi: Ministry of Urban Development

WHO. 2005. WHO Air Quality Guidelines for Particulate Matter, Ozone, Nitrogen Dioxide,
and Sulfur Dioxide. Geneva, Switzerland: World Health Organisation

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Conclusion

However, it is essential to acknowledge the challenges and limitations associated with the
odd-even formula. While there is evidence supporting its effectiveness in reducing vehicular
demand, there are concerns about its long-term feasibility and impact on the overall mobility
patterns. The policy's success depends on factors such as public compliance, the availability
of reliable public transportation, and the potential for behavioral change among citizens.
Policymakers must carefully consider these variables and continuously assess the policy's
efficacy to make informed decisions on its continuation or modification.

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