Road Transport in India

22nd April 2016

B.N. Puri
CEO & Director
Former Principal Advisor, Planning Commission

Asian Institute of Transport Development

Modal Mix: Overview

Passenger Traffic Share Freight Traffic Share

Significance of Road Transport

Economic • Increase in share of high value and low volume commodities.

development leads • Increase in passenger traffic intensity.
to • Demand for quality transport.

Increase in • 10 per cent increase in travel speed labour market expands by

productivity 15 per cent and productivity by 3 per cent.

Significant
contribution to GDP • (about 3 per cent and Rs. 2000 billion).
and government
revenue

Favourable impact on • Participation rate in schools education increases by 100 per

education and
medical facilities cent for girl and 33 per cent for boys

Highly employment • Only next to IWT

intensive.
Issues, Diagnosis and Solutions
 Externalities

• Transport sector accounts for nearly 18 per cent consumption of total

energy.
Energy
• Share of road transport is 90 per cent.
and
• 98 per cent of total energy demand is met through petroleum products
Environment
which represent half of consumption of petroleum products.
• CO2 emission of road transport sector is 206.4 million tonnes which is
92 per cent of total emission of transport sector.

Significance Life
• Consider Full life cycle energy and Co2 impact of transport modes
Cycle Analysis

Except one no oil producing country can balance their budget at price less than US$ 100
per barrel.
Safety

• Accidents 4.9 lakh (1 every minute)

Road accidents in
2014 • Deaths 1.40 lakh (one death every 4 minutes)
• Injured 4.63 lakh

Accidents impose • 3 per cent GDP for India

significant costs

• 28.2 per cent of all accidents

Accidents on NH • 34.1 per cent of persons killed
(2014)
•29.9 per cent persons injured

• Drivers’ fault – 78.8 per cent of total accidents in India

Major causes of
accidents •Overloading/overcrowding of vehicles caused 20 per
cent of total accidents
Fiscal Issues
1. Generation of revenue 2. Economic efficiency.
Taxes, user charges and
subsidies serve : 3. Income distribution. 4. Environment sustainability.

i.e. transport input required to produce 1 unit of output is

Transport intensity in • 11 per cent higher than South Africa,
india
• 14 per cent more than China and
• 38 per cent higher than Brazil.
Tax per unit of output • more than 40 per cent higher than South Africa.
in India

Impact of less efficient • Introducing efficiencies under various scenario the

usage transport economy gains 0.042 to 0.0148 in GDP under various
services scenario.

Simplify the • through a mechanism akin to that used for transforming the
multiplicity of state complex state-level sales taxes to the simplified state VAT
level taxes system.
Institutional Strengthening
Trend of Road Traffic Fatalities in Selected Countries,
in Numbers
Road Traffic Fatalities in India
in Numbers
Public Transport

Market can determine role of • perfect competition

private and public transport, • No significant indivisibilities
provided there is • No unpriced externalities.

• Selection of appropriate modes and technically and

Training a donkey.. economically efficient development of these modes- (The
(Gwilliam) Carrots).
• Action to restrain competing private mode with uncharged
externalities (The Stick).

Institutions • A capable public transport regulatory and management

authority is highly desirable.

Integration • Effective physical coordination through ticketing between

modes critical to the attractiveness of public transport.

Role of Buses • Even in cities with mass transit system the majority of trips
will taken by ordinary buses
Technology
• One-third of fleet (freight) does 300 to 400 kms.
• 12 per cent of trips are empty.
Improvement • Use of information technology.
• Route rationalisation.
in productivity
• Fleet deployment.
• Rationalisation of maintenance practices.
• Maximisation of revenues.

• Determine the way companies develop and build vehicles.

Innovative • Promote electric and fuel-cell vehicles offer lower energy and
Technologies emissions.
•Introduction of autonomous vehicles.

Business
Models
Integrated Multimodal Transport System
R&D and Capacity Building
Summing Up
Thank You