Nov 7, 2008

India - Buses & Barack

Sunita Narain

We need to change our policies to get more buses on the roads — in Obamaspeak, we need change we can believe in.

What does the election of Barack Obama as the president of the US have to do with buses in India? A lot, if you think about it. The fact is that Obama has stood for something that he calls ‘change’ — in the way we think and the way we do business. But this is great rhetoric unless we can translate this into practical changes in our everyday lives. And to do this we must understand that change will require changes in our business models and most important changes in the priorities we set for what is essential and what needs to be invested into and how.

Anyone who lives in Indian cities and is crushed under the weight of traffic and pollution will accept that we need a massive transition to public transport. But the fact is that even as we say, we need public transport in our cities the number of buses in each of our towns has gone down and not up. In 1951, one of every 10 vehicles sold in India was a bus, today out of every 100 vehicles sold, one bus makes it on our roads.

But this is only the beginning of our problems. The fact is that even if we want buses we cannot have them. Why? Simply because our great automobile companies, who are busy churning out cars for our congested cities, do not have capacity the manufacture buses. There are only two real players in the market — Tata Motors and Ashok Leyland. These companies do not make buses. They manufacture a truck chassis, on which various body builders assemble the vehicles we see on our roads. As a result, when the city of Delhi or Ahmedabad places an order for an urban bus, with better components and designs for comfort, it does not get many companies to participate in the tender.

And when the city finally does place an order, the manufacturer cannot deliver buses in the quantity and speed required. Delhi placed its first for some 500 low-floor urban buses over a year ago. It is still waiting for all the buses to be delivered by Tata Motors. The company says it can manufacture roughly 100 units a month in its newly developed facility in Lucknow. Now, Delhi has placed another order for over 2,500 buses, this time dividing it between Tata and Leyland. Leyland says, that it will begin delivery sometime next year and will also be able to manufacture 100 units each month. Delhi is a city, which adds 1,000 vehicles each day. It will have to order another 6,000-odd buses for its roads. But who will make them?

For believers in the market economy, this question is a no-brainer. They say if there is a demand for buses, manufacturers will crowd it. But this is where we need to heed that the call for change is more than words. In this case, we need to recognise that the market needs a product, which is outside the reach of its consumers. Therefore, the challenge is to manufacture high comfort but affordable buses — a Nano-type solution.

The problem is that the bus market is different from the car market, which has been so carefully developed by manufacturers and credit agencies. So, even as the automobile manufacturers stand behind their cars and push and peddle their wares, they do little to push the vehicle that could drive millions in the country. The bus is the poor person’s vehicle and nobody it seems wants to do business with it. The reason lies in the fact that buses will have to be driven by agencies, which will do business in transporting people in cities. Currently, all our bus companies operate in the red. It is easy to dismiss this problem saying that this is the curse of the inefficient public sector utilities. But this would be missing the point.

The ministry of surface transport has itself calculated that the combined losses of Rs 2,000 crore in 2004-05 of the state-run public utilities would go down to less than Rs 900 crore, if the various Central and state taxes charged on the bus companies were removed. In current policy, we will willingly subsidise air travel and car travel by reducing taxes and underwriting costs. But we will not extend the same benefit to the bus.

The question is that why does this happen in a country where the majority still takes a bus? Why is the voice of the majority neutered in our democracy? May be this is why we need most of all to understand Barack Obama’s victory where the people spoke for change. Maybe there will be real change in the air after all.

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