Why not levy a special cess on petrol and diesel cars to help build public transport systems in our cities?

The prices of petrol and diesel are up once again. At the turn of the century, the fuels that keep our economy on the road dispensed by IOC in the national capital cost Rs. 25.94 a litre (petrol) and Rs. 14.04 (diesel) according to data maintained by Reuters. Today’s price in Delhi is stated to be Rs. 69.05 and Rs. 48.16 respectively. The fuels are normally more expensive in other metros, particularly in the South.

One of the ironies of today is the blame laid at the door of the Indian consumer as a major driver of higher global prices of fuel. Since demand is building in India, the global price of petroleum is mostly up, we are told often. It is no secret that the rising consumption of automotive fuels in India is the result of a conscious policy followed by the Centre and the states, to starve public transport and impose automobile dependence to grow that sector (the bus industry has never enjoyed such growth, though). Hence, we have shrinking access to buses in real terms (cities are growing with static systems), new rail networks will take years to complete, and the middle class is either too disorganised or complacent to make accessible and comfortable transport options a political issue.

The story is too familiar to be recounted in detail, but the reality in short is that most non-motorised forms of transport have been driven off the road, and walking as a form of mobility is made impossible in most cities – footpaths and people-oriented facilities are either absent or crumbling. The government, of course, misses the point that poor mobility actually dampens economic growth, but it is too besotted with the automotive manufacturers to be able to see this.

Chennai's predicament

If you took Chennai as a sample, it has multiple problems with fuel price rise: the present increase in diesel price could lead to a reduction in service of an already static fleet of city buses which have tried to wriggle out of bulk consumer pricing by tanking up at retail outlets. Alternatives such as autorickshaws and mini-vans (locally popular as ‘Tata Magic’ services) would charge arbitrarily in the wake of the increase, and the taxi services, also unregulated in fare tariff terms, would also be free to charge on their own terms.

Given the massive demand for inter-city travel, an across the board rise in diesel price would mean higher fares are inevitable. The Bangalore – Chennai sector, for instance, is heavily served by buses, since the railways is unable to meet the demand. Tamil Nadu also has an extensive network of inter-city connections within the state.

One would argue that a fuel price increase in India should be accompanied by sequestration of some of the funds, to boost investment in bus, rail and tram systems, and to cross-subsidise inter-city bus travel. If many car users can pay Rs. 70 plus for a litre of petrol without blinking, can there not be a small cess of five per cent to fund public transport? Owning a car might therefore appear to be easy, but using it would involve paying the correct social price. Even though it would create a little pain in the short term for car users who are forced to use it, the long-term results would be beneficial.

It is also time to introduce laws that will encourage transparent investment in the taxi market. A big fleet of taxis that are run on proper fares would eliminate the need to own cars, for those who want one merely for family outings or for occasional use. The day’s commute could be handled by air-conditioned buses – thousands of them of different sizes plying to the most congested areas - operating on subsidised fares, and the Metro when it is ready.

But most of this is still part of a wish list. Why are our politicians so cynical towards the middle classes that they refuse to intervene as the price of fuels keeps going north?