Loksatta | Mumbai's Traffic Congestion Woes: Is Proof-of-Parking the Solution?

Mumbai, one of the most vehicle-dense cities in the country, is considering policy solutions to tackle growing traffic congestion. One of the solutions that the Maharashtra government is considering is to mandate a parking space to buy a car.  In this proposed policy, an individual must own or secure a private or public parking space to buy a car. The Maharashtra Government is considering deploying this policy in the next 100 days, taking inspiration from the Japanese-certified parking area policy, which banned free street parking to create a market for parking spaces and reduce car ownership in cities. However, it is unclear how this policy will address road congestion when it only applies when buying cars and not restricting where the vehicles are parked once bought. The policy comes with other challenges - its high state capacity requirements make it difficult to execute, and potential consequences, such as rent-seeking and false certifications, might follow. The policy's success will depend on whether it can create a market for parking spaces in the city.  

Vehicular congestion is increasingly becoming a problem in Indian cities. Although Mumbai reduced its average travel time by 20 seconds, it slipped from 39th in 2023 to 52nd in 2024 in its average travel time position worldwide as per the TomTom Traffic Index. Bengaluru ranked 1st and Mumbai 6th on congestion in megacities (population greater than 8 million) worldwide. It is well established in economic theory that one vehicle on the road causes a negative externality on every other vehicle. Pollution and the probability of accidents also increase as cars increase. An ITDP report states that congestion in Mumbai causes the city productivity and fuel losses of more than Rs 36000 crores and time losses of about 85 minutes a day. This is even though only 19 per cent of trips in Mumbai are made using taxis and private vehicles, compared to 51 per cent by walking and cycling and 30 per cent via public transport. These problems stem from Mumbai's 2300 cars/km car density, the highest among the Indian cities. Private cars occupy almost 50 per cent of Mumbai's road space. The parking shortage is a symptom of this density, hence the proposed policy. 

This policy was inspired by a similar one introduced in Japan in the 1950s, and to some extent, it was successful.  However, this will be tricky to execute in India. Firstly, it would require the individuals to showcase parking space availability before purchasing a car. This may lead to rent-seeking behaviour, providing false certificates, etc. 

Secondly, mandating space requirements doesn’t solve congestion due to street parking. Japan outlawed free street parking and leased those spaces to car owners to show as proof. People also might provide proof of a parking space in non-congested areas and use cars in congested ones. 

Thirdly, the demand for in-built parking space could increase the cost of urban real estate, making homes unaffordable for many. In India, it is already mandated that apartment buildings provide parking spaces. A policy like this could come with increased mandates, which have been shown to distort land markets. In Japan, such parking mandates excluded small buildings and were purposefully low (approximately one parking space per 3230 sq ft). Moreover, the parking space supply might not meet the vehicles already on the road in a land-scarce city. 

Finally, this proposed policy would require massive state capacity. It would require a comprehensive survey to identify available parking spaces, assigning them unique identifiers linked to specific vehicles via registration numbers. Additionally, vehicles registered outside the Mumbai Metropolitan Region (MMR) would incur a daily fee to operate in Mumbai under the proposed policy. This necessitates significant human and technological resources to execute the policy effectively.

A better and simpler alternative is congestion pricing, a toll on the most congested roads in the city. It has been shown to reduce congestion and car ownership. Studies have already been done to implement this in Mumbai, and large cities like Singapore, London, Tokyo, New York, etc., already implement such charges. India's FASTag toll collection system can be used for this purpose. The government isn't opposed to this and is trying to develop congestion pricing as a package deal with the proof-of-parking system. Surveys suggest that a significant majority of Mumbaikars, around 75%, support congestion pricing. The critical difference between a proof-of-parking policy and a congestion price is that the latter doesn’t disincentivise one from buying a car but just from using it on congested roads. Solutions to better control traffic management, including real-time traffic mapping, dynamic signals, and Tokyo-style visual mapping to inform traffic management, can also be considered.  

Ultimately, any policies that try to reduce the number of cars on the road must be accompanied by expansion in public transportation. Many cities in India have seen a fall in the share of public transport use, fuelled by a massive rise in private vehicles. India faces an acute shortage of buses in cities. Even though most attention is grabbed by metros, buses are essential to urban transportation. As Enrique Penalosa, Bogota's ex-mayor, once said, "An advanced city is not one where even the poor use cars, but rather one where even the rich use public transport".

By Miheer Karandikar & Anisree Suresh

Read the Marathi version of this article here.

Moneycontrol | Supreme Court’s push to fix medical rates is unjustified and counterproductive

In the Indian blockbuster series of judicial interventions in policymaking, the latest episode on fixing the rates of medical services charged by hospitals in the country dropped last week. The Supreme Court of India, overcome by the pressing concerns of rising healthcare costs and disparities in costs of treatments availed at public and private hospitals, heard a public interest litigation (PIL) filed by the NGO ‘Veterans Forum for Transparency in Public Life’. In the characteristic style of PILs, the Court directed the Union Government to find a way to fix the price bands for all medical procedures and treatments offered by hospitals in the country and report back in 6 weeks. Or else, the Court threatened to impose the medical rates charged under the Central Government Health Scheme (CGHS) on all hospitals as an interim measure. Hospital stocks responded promptly by shedding more than a few points. Read the full article here.

Moneycontrol | Bangalore Water Crisis: Marginal pricing of water, subsidies to poor may curb water woes

Barely a few days into summer and there are already reports of Bangalore facing a severe water crisis. Groundwater is depleting and borewells are running dry. The price charged by private tankers have doubled. Some apartment complexes and RWAs are already rationing water and cutting off water supply to households for a few hours in the daytime. Meanwhile, the state government has decided to nationalise all private water tankers in the city. This is a complex problem with multiple causal factors – geography (Bangalore is situated far away from any naturally occurring water body), weather (weak southwest monsoons), and mismanagement. Mismanagement takes the shape of encroachment and building property on lake beds, failure to enforce rainwater harvesting systems, not providing piped water supply to peripheral areas, and unabated exploitation of ground water. Read the full article here.

Times of India | Un-fare policy

Why it may take a Bangalorean 37 tries to book a cab

Traffic rules are seen as mere suggestions for drivers and riders in Bangalore. In the same vein, principles of economics are considered as an optional extra while formulating policies. Both are more honoured in the breach than observance.

A recent doozy is the Karnataka govt decision to fix the prices for taxis in Bangalore based on the cost of the vehicle. What is idiotic about this? For one thing, we have centuries of literature on govts trying to meddle with prices and fix them. And for centuries, govts have failed in doing so. Read the full article here.

Moneycontrol | Karnataka’s plan to fix prices for Uber-Ola cabs is going to boomerang badly

There’s ridiculous and then, there’s this! In a long list of antagonist policy decisions taken against cab-aggregators by Indian state governments, the latest one by the Karnataka government takes the cake. In a policy that plans to emulate the pricing structure of the city’s autos, the Karnataka government plans to fix prices for all taxis in the state. In the new fare structure, all taxis will be categorised into three segments based on the purchase value of the vehicle and the prices will be fixed for each segment. Read the full article here.

We need more trade, not a trade war

The decision by the Trump administration to withdraw preferential treatment to Indian goods should serve as a strong warning to the New Delhi that prioritising narrow domestic politics over good economic policy can have dangerous consequences.Trump’s decision to levy import duties on erstwhile exempted goods did not, as commonly understood, come out of the blue, nor was it the first strike in an emerging trade dispute. The US Trade Representative has appealed to New Delhi multiple times in the past to remove the trade barriers that it has imposed on US goods and investments. This move by the US is largely due to three distortions introduced by the government that hurts not only US business interests but also Indian consumers. These are the price caps on cardiac stents and knee caps, the new FDI in e-commerce industry rules that prohibit foreign e-commerce firms to run inventory based retail, and the ban on American dairy products.It is not in India’s national interest to get into a trade war with the US. We have more to lose than them by doing so. India should drop the threat of escalating the trade war. Relative size of an economy and dependence on trade with the other partner are crucial in determining whether trade barriers can achieve the necessary outcomes. The US is a lot more important trading partner for India than India is to the US.Geopolitical realism instructs us that India cannot afford to indulge in such a trade war and that the damage we can inflict upon the US is not big enough to force it to change its trade regime. If India escalates the matter, it could very well lead to a full-blown trade war that could potentially witness bigger retaliation from the US in the form of higher tariffs on pharmaceutical products or non-trade barriers on Indian software products, which can truly hurt the Indian economy. We could also suffer due to decreased investment by US firms in India and, at a time of decreasing domestic investment, this can be damaging.Read more at: https://www.deccanherald.com/opinion/panorama/we-need-more-trade-not-a-trade-war-with-us-722934.html