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Urban transportation needs all the help it can get

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Another area that calls for urgent attention is management of roads and the infrastructure around them all over the inner city too, particularly the fast shrinking parking spaces.

MR VENU SRINIVASAN
MR VENU SRINIVASAN

Venu Srinivasan

The Finance Minister receives much gratuitous advice on how to manage the economy around this time of the year. I must first compliment the Finance Minister for his vision and courageously driving through economic and tax law reforms which have contributed to the double-digit industrial growth for many quarters and an overall 9 per cent level of GDP - unthinkable a few years ago.

I do hope he would be able to maintain and accelerate the agreed direction. I believe the Budget is meant these days mainly to reaffirm and make minor adjustments as needed in the direction already laid down, and reiterated since the 1990s. I hope it will do this, as sudden and substantial reversals of policy positions are neither welcome nor healthy for any one.

URBAN INFRASTRUCTURE

I propose to limit myself to what I know something about, i.e. the transportation situation in the country more especially the urban and suburban regions.

This includes the infrastructure for the approach to the big metros and ports, which are growing industrial hinterlands. Of course, another area that calls for urgent attention is management of roads and the infrastructure around them all over the inner city too, particularly the fast shrinking parking spaces.

The attention is of different kinds - investments of course but also sending the right signals through legislation, tax incentives, enforcement and deterrents to further deterioration.

TRANSACTION COSTS

To say that all our city roads are choked and grossly over-extended and under-maintained is a no-brainer, really. You just have to look at any big town mornings and evenings. Today almost every hour looks like a rush hour. This has many implied and interlinked costs: general delays, lower industrial productivity, human fatigue, pollution and its impact on health and waste of scarce fossil fuels, of course safety issues, accidents and so on.

Another less understood impact is the huge increase in transaction costs in the export-import area, so crucial to our economic growth being sustained at these levels. Factories situated on the outskirts of major industrial cities are finding it increasingly expensive and cumbersome to transport their exportable goods - say cars - on schedule to the airport or seaport without unnecessary losses due to heavy traffic and waiting times.

Without an improvement in this increasing the investments into our manufacturing hubs is going to be ineffective, if not difficult to come by. If you cannot make the roads fast enough, dry ports at the suburban locations to hold and carry the cargo are essential.

CHOKED UP CITIES

City roads are sought to be made more convenient to the motor car by building a number of flyovers, but this sacrifices much needed parking spaces and pedestrian pavements. Both of these are going to further choke up the usable space. Buildings, including high-rise apartments that do not allow for some form of underground or multilevel parking facilities ought to be discouraged by law. Otherwise all our streets become two-lane, with a row of vehicles permanently occupying either side. This cannot go on.

MULTIMODAL TRANSPORT

Actually the more basic solution is aggressive follow through on all the pronouncements on multi-modal transportation. Everybody prefers his own transportation, not only because of the flexibility, despite the higher cost, but because the public or some form of shared commuting is simply not available.

Most of us would happily adopt a higher segment, luxury commuter system which is a perfectly feasible solution to commuting. If you can travel in air-conditioned comfort point to point at a price much above say the bus or auto fare, many would take it - to arrive fresh and on time for work. The societal and economic advantageous are too obvious to mention in detail.

MRTS A GREAT BOON

Companies in IT and other industries today have to provide this facility themselves anyway, in most cities. This has to be officially supported by policy and tax incentives. Next, we must encourage using the motorised two-wheeler as a feeder system, as the bicycle used to be in earlier days. A distinct possibility, as the population growth expands city boundaries, to provide good access roads to the stations and most important of all, secure, covered, paid parking lots for motorcycles.

It is impossible for millions to take on the long rides to work without suburban transport like the MRTS, an obvious solution that many would gladly welcome. This is nothing new in the older systems as in Mumbai but needs further adoption elsewhere. In Chennai, for example the new MRTS badly needs such parking.

One of the hurdles to road policy is that roads are a State subject. But I am sure sustained discussions and mutual give and take should help resolve this, as the States themselves are a beneficiary of smoother traffic and cargo flow. Pollution leads to degradation of the environment and the quality of life. Already there is an alarming rise in respiratory disorders among children in the large populated areas. Manufacturers that take a farther step, well ahead of the regulatory requirements, by adopting globally accepted anti-pollution and energy saving norms, ought to be rewarded and encouraged. This is well within the remit of the Finance Ministry.

INVERTED DUTY STRUCTURE

On the duty front, from an industry perspective, I cannot help saying that the inverted rate of import duties which makes it more attractive to import the sub-system rather than the material inputs clearly needs a re-look. I am told the Government is well seized of this.

Fringe Benefit tax

The Fringe Benefit tax is a vexed issue. Apart from anything else, it does not make for an easily administered tax system, nor a simplified structure, which everyone seems to agree, is long overdue. The money collected through many levies such as those on wealth and gifts is minuscule. The FM is well aware of this and I hope he will just sweep aside these low-yielding and ineffective taxes.

He has been amply rewarded by bumper collections on the few big ones anyway, with corporate tax collections touching all time highs and overall revenue well ahead of the Budget.

The economy is on song. This is the time for the FM to join the chorus in harmony, and make further and dramatic simplification (through waste elimination) his theme for the year.

(The author is Chairman and Managing Director, TVS Motor Company Ltd)

(This article was published in the Business Line print edition dated February 21, 2007)
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