Mritiunjoy Mohanty, Assistant Professor at IIM Calcutta, writes in Rediff in an article entitled “Why criticising the Rs 1-lakh car is wrong“.
Whereas the author (selectively) makes a case for car from the economic and energy pespectives, he does not at all address the issue of India’s urban infrastructure, or the lack of it. Cars, as we all know, are owned by people who think they can afford them, and need fuel to operate. But they run on roads. And pray someone tell me which Indian city has the roads to withstand an explosion in four-wheeled vehicles.
As someone who has used Chennai’s roads for almost 7 years, years that coincided with Chennai’s IT boom, I can vouch that by 2005 the city’s roads were choking. Fat paychecks and friendly loans had loosened the purse strings of conservative Chennai, and the result was obvious on the roads. While I do not have the necessary data to back my assertion, anyone who has been in Chennai would know this to be true. The same can be said of Bangalore too; my friends from Bangalore would agree that their situation is worse.
Transport statistics for Chennai city on March 31, 2002 reveals that the city has about 2700 kilometres of road. Non-commercial motor cars on the same date in the city number 325000. One would not be wrong in assuming that the numbers today would reveal that the number of motor cars has gone up by a much higher percentage than the length of roads.
Throw in a 1-lakh rupee car into this equation. Welcome as it is for people who were unable to afford a car till now, it skews the balance even further. Not only does it mean cars for those who did not have one, it will also be ideal for families thinking about a second or a third car. Basically therefore, in the next few years, we will have twice as many cars on just the same length of roads. (To say nothing of the poor driving skills of these new car owners.)
In city after city whose roads are already at or beyond the limit, a more affordable car is not, as Mr. Mohanty thinks, a disruptive innovation. Whereas one cannot stop Tata Motors from selling a car, and one cannot stop people from buying it, one can only hope that it will at least bring about a retroactive thrust into urban infrastructure development projects. Not an elitist gag that labels all criticism as wrong.
Update: The car has been unveiled, and it is called the Tata Nano.
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Matty on 
January 8th, 2008 at 6:26 pm
VK,
You are right in saying that one cannot stop Tatas from selling the car. However, one should also not prevent people from buying it. Why do we not prevent people from buying the Maruti-800 as it too is affordable to the middle class Indian? (Last checked, the Maruti was retailing at an EMI of Rs. 3000 a month without a huge downpayment …. remember the Rs.2599 scheme?) The marutis too crowd the roads. Infact why not introduce a legislation that cars cannot be priced less than Rs. 5 lakh, or better still, Rs. 10 lakh. In that way, only the the ultra-rich wold be able to afford cars and our roads would be free once again.
The point I am trying to make is that the one lakh car will make life better for the customer who purchases it and he has every right to make his life better by purchasing the car. It is the government’s job to keep up with the infrastructure (because it collects taxes from the citizens). Instead of criticizing the govt. and castigating it for not being able to develop this infrastructure, most of the “one-lakh-car-is-bad” proponents are shooting the company who actually tries to bring comfort to the consumer for a lower cost. And if petrol is to become expensive due to scarce supply, the sales of such cars and other cars will automatically reduce. Companies may conme up with smarter options like hybrids or electric vehicles.
Sunita Narain, the director of CSE wants the govt. to tax the one lakh car like crazy. This tax is highly unfair because it penalizes a company for being efficient! And why is the tax being introduced only now? Can we retrospectively levy this “crazy tax” on every car plying the road? It will be terribly unfair to Tatas as most of the other firms have made their money by selling cars without that “crazy tax”.
Why not tax all vehicles? or atleast tax all private vehicles like crazy? How about taxing scooters, motorbikes, and all other private vehicles because they too use petrol which is an expensive resource? How about taxing bicycles like crazy? Afterall, they too use the road and our infrastructure is crumbling. How about taxing pedestrians using our scarce infrastructure? You get the drift?
Solution:- Let the Tatas introduce the one lakh car. Let the roads be overcrowded and choked. Let the citizens protest / demand with the government for better infrastructure. If the govt. fails to deliver, it is out of office in the next term !!!
January 9th, 2008 at 2:08 am
Taxing the small car ‘like hell’ violates a general cannon of equity, namely, that the choice of the poor ought to be taxed less than a choice of the wealthy. A tax on beedis, for example, is always lower than one on cigarettes. On the other hand, his point about taxing vehicles with capacity greater than 1500 cc. will have only a limited impact as those vehicles will continue to be fewer in number.
There is no good answer to the infrastructural question. We are headed for a period of greater pollution and choked roads. But if the traffic congestion reaches such intolerable levels, it may well manifest in a variety of ways as in the hastened development of more satellite towns, migration of investment to a second tier of cities, greater preference for public transport, proliferation of public transport services perhaps by private operators, etc.
At this point, there is no major environmental movement in India – much of the change has been driven by a few individuals with some help from the courts. As environmental pollution increases exponentially, its hazardous consequences on public health in urban areas will also increase. This may in turn provide a fillip to this nascent movement and force the state to move towards a greater commitment in this direction.
For the most part, I agree with the author. Criticism of the one lakh car will not alleviate the demand and attempts to ‘fix’ the problem risk raising larger concerns about the role of the state in the marketplace, its commitment to equity and fostering innovation. The car, after all, only brings the country’s day of reckoning when it will have to confront the infrastructural and environmental questions much nearer.
January 10th, 2008 at 7:03 am
I don’t think this is much of an issue to be worried about. People may buy these cars, there may be increase in traffic (otherwise also that’s going to happen if the infrastructure is not improved) for a shorter period, but if you look at present day scenario also places where public transport is good enough people are using it instead of using private vehicles(I’ve rarely used my car after Bangalore introduced the volvo city services). Bombay may be a good example. How many people will buy the 1L car and drive down from Boriveli to Andheri tomorrow onwards? They might buy the 1L car, but only to use it on weekends going to the temple or a picnic. Its at least safer than a family of 2 adults and 2 children traveling on a bike.
And with most of our cities realizing the need for mass rapid transport systems and working towards it, this will soon become a non-issue. Villages anyway, traffic is not a big issue even if every house is going to have a small car.
No matter whatever it is, arguing that Tatas should abstain from providing Indians a cheaper alternative for commuting is a no-brainer argument I feel, never a solution to the real problem of lack of infrastructure, good public transport systems etc. In fact I hope these will wake up our law makers to come up with better strategies. Sunita Narayan has such pointless propagandas from time to time because that’s her job(The municipal water I drink if tested will be 100 times more contaminated than colas that are made out of proper plants).
Will we say low-cost airlines should be banned because they choke our sky with more flights and more people? They also use large amounts of fuel and make a lot of noise too. So lets argue that Capt. Gopinath, please abandon your business and get lost because you are too cheap, so many poor will fly and pollute our country.
January 12th, 2008 at 4:58 am
My thought process was along the same lines vk, but who can stop the juggernaut from rolling?
I will be watching the social changes due to this car with interest. I hope the horrid autorikshaws are soon replaced with nanoxis..(nano taxis)
January 13th, 2008 at 12:52 am
Its a great idea. For millions of us dreaming of a car, that dream is here. For the world which worries about the environment let them find a solution. Because its a problem these new car owners will inherit rather than create. For the rest of the world which will own these cars it will be a safer, more comfortable drive home.For the Indian government its only going to accelerate and bring forth the issue of infrastructure already in dumps. For Tatas another feather in the cap and a huge export market.
January 15th, 2008 at 9:40 am
well its a 624 cc engine which produces 33 hp.its not automatic. i think the car looks sweet. but its onli 33 bhp i wonder if it can drive up a steep hill with 4 people. did you hear the words of RATAN TATA “A promise is a promise and that is what is delivered” I kinda admire him for that