The automobile industry in India has exploded over the past couple of years. The latest buzz doing the rounds is with regard to rolling out the “much awaited” 1 Lakh Car to serve the needs of the thirsty Indian middle class. The Tata group has promised to deliver on this project within the next year or two. Other major groups like Bajaj are collaborating with Renault to try taking a byte into this rapidly expanding segment. But where is the space for so many cars????
Most of the major cities in the country do not have the road infrastructure to cope with this sudden burgeoning of traffic. Jams are commonplace wherever you go. No city is spared. Statistically it has been found that it takes a person more than two hours to traverse the 20km stretch in the heart of Mumbai!
Economics tells us about the production possibility frontier which represents the manner in which resources are allocated towards production of various goods in an economy given the constraints of technology. Currently, with the present scenario of traffic in our megacities, the government is forced to spend on improving road infrastructure. This lopsided spending is hurting not only the cause of public transport development but also other vital infrastructure projects . Mumbai’s much awaited metro system whose foundation stone was laid by the prime minister a year back, is yet to kick off due to pending settlements which have to be made.
A society allocates its resources in a manner to maximize social benefit. But is it actually happening? Congestion on roads is definitely not desirable by anybody. Maybe a car is. The Car in an Indian context is a status symbol in society. People fresh into jobs purchase cars on loans lasting for 15-20 years. The city of Mumbai alone adds 500 cars to its roads daily. They can’t be blamed, since the public transport in most of our cities is so overburdened, that using it is a struggle most people are not willing to go through. Even in Mumbai, a city whose suburban train system is its lifeline, can’t claim to have a world class standard system. It is designed to handle 1700 commuters at any point of time, but it handles 5000 people!
On their part, the companies are also working on the principle of making profits based on low margins but high volumes. Somewhere, all this overemphasis on making the four- wheeler affordable is going hit a roadblock.
So what is the road ahead if it all there is one?
I am certain it is not the coming of the 1 lakh car!
