The Union Budget And Alternative Transport Policies

BEFORE the budget, there is the recurring refrain that the only way forward lies in lowering taxes and stimulating” growth. If the neo-liberal economists are to be believed, the Left, in asking for higher taxation is not only anti-rich
but also anti-development and therefore anti-poor. In other words, we are back to the hackneyed theory that if the State takes care of the rich, it will trickle down to the bottom through increased growth and automatically take care
of the poor.


I  am not going to get into the hollowness of these arguments here, which has been exposed time and again in the People’s  Democracy. Instead, I will address just one issue – that the only “virtuous” course is in lowering taxes on all commodities. I will take up the case of the transport sector and address whether there are other reasons for
increasing taxes on some sections of the transport sector and whether this can be used to drive a set of transport policies that are not only in the national interest but also in the larger societal interest.



It is becoming increasingly clear that the use of fossil fuels is leading to the accumulation of greenhouse gases in the atmosphere and resulting in global warming. Though the US government is unwilling to accept this, and recently a
Michael Crichton book echoes the US government’s views, the facts are quite obstinate. The recent announcement of scientists that the oceans are warming up at all depths is another confirmation of what should have been commonsensical: if we release increasing amounts of greenhouse gases than what the existing environmental sinks can absorb, the global temperatures are bound to rise.


There have been two responses to the imminent crisis of global warming. One is to deny it altogether, the classic US response and add that American lifestyles are not for negotiations. If the facts demand a change of lifestyle, the facts of course must be wrong. The second is to accept that drastic changes are required but to argue that, as the course of western development has already been set, the developing countries should not follow this “destructive” western model. However, both of these see that any solution that is advanced should not address the western lifestyles.


The dominant mode of dealing with the environmental concerns has been to co-opt the environment concerns within the agenda of global corporate capital. Environmental action henceforth should be built around private-public
partnership, the new buzzword being touted to solve all the problems of the world –– from global warming to poverty. This Clean Development Mechanisms (CDMs), in which poor countries can trade their savings of greenhouse gases for the west to continue its business as usual, is the panacea being offered to global warming. Much of the Kyoto protocols are about trading carbon emissions, business as usual for the rich countries and subsistence economy for the others with the rich paying the bribe of this avoided development in the name of carbon trading. Not that there are no other provisions. Capping emissions is an important provision in the Kyoto protocols, much of which however will be lost through carbon trading.


The fundamental premise of any exploration of environmental rights must be from the standpoint that every human being has equal rights to “environmental space.” If any section of people or any country appropriates much larger share of either global resources or global commons, including environmental sinks, this is not neither just nor sustainable.









The question here is how do we look at global commons. Obviously, there are two views here: one is the squatters’ rights view which attempts to freeze current use of global commons as per their current use. This is best exemplified by the US, which produces 25 per cent of global greenhouse gases with only 5 per cent of the world’s population. The other view is that we need to find an equitable basis as to how global commons can be used and they cannot be based on squatter’s rights. Otherwise, it means freezing permanently the current global inequalities.


Obviously, energy today is the key issue both from the resource, as well as from the considerations of environmental sinks. If we have a clearly finite source of energy, the fossil fuels, we also have a situation where the greenhouse gases
produced, most notably carbon dioxide, exceeds the capacity of the sinks.


If we take the energy question without reference to either global inequities or lifestyles, then purely technically, is it possible to meet the requirements of energy of both developing and the developed world without running out of fossil fuel or overwhelming the environmental sinks? However, the finite resource argument has one problem; the amount of fossil fuel depends on the cost of fuel. If fuel costs rise to about $80-90 a barrel, oil shale deposits also come in to the fossil reserve. So also coals that we do not use today, as it is uneconomical. We also have oil-bearing nodules on ocean floor that may become economically viable at some base price of fuel. However, even if we in the short term solve the fuel problem by adding newer fossil resources, these are also finite and therefore cannot sustain an ever-expanding usage.


The much more serious immediate constraint on indefinite use of fossil fuels is from the environmental sink point of view. There is no doubt today that global warming is real and urgent measures are required if we want to preserve our future. Even if we do not increase greenhouse gas generation, we will still see disastrous global warming, quite possibly in the lifetime of many of the people living today.





However, this article is not about either CDMs or Kyoto Protocols, so we will go into one aspect of the current environmental concerns, which never gets debated. Why is the private and public transport not ever discussed in the context of greenhouse gases? Why is it that even the more forward looking northern groups are afraid to raise the issue of public transport and its far greater efficiency in comparison to private transport? If the need to cut down on fuel usage is so obvious, why is it that the transport policies across the globe do not reflect this?








Comparative Efficiencies of Buses, Trains and Cars








in Percentage





Passenger KM





of car/other modes





































































Let us look at the comparative costs per passenger kilometre between cars – private transport – and other forms of public transport. Buses are about 8-10 times and the trains – including metros – are about 50-60 times more
efficient (in terms of passenger kilometre). In other words, in a globe possibly dying of heat death, there should be an overwhelming move towards public transport. And this would not even affect the lifestyles of any section. Anybody
knows that a good public transport system reaches you quicker to your destination than cars in clogged roads. Even the wealthy use the underground in London, Paris and New York. They may lose their special space and may have to
rub shoulders with the rest of the population. But it is still preferable than navigating the traffic jams of any modern city.


If public transport is so overwhelmingly more efficient than private transport, why is it being killed in the world? Even in UK, the railways are dying while the government builds motorways. A part of the answer lies in that public transport is state owned and the state-ownership is a bad word in the dictionary of the liberalisers. The liberalisers would prefer for the globe to die a heat death than accept the benefits of state ownership.



Let s look at the India scenario. We systematically are starving railways of funds while building expressways. While expressways and flyovers are built from public funds, any talk of funding railway expansion is looked upon as providing subsidies. Trains run on tracks while motor vehicles run on roads. While the road being built by the state is not considered a subsidy, building of tracks is. Even if the resulting mode of transport is at least 6-8 times more efficient for freight (railways versus trucks) and 50-60 times more efficient than passenger cars. And for this rare privilege of becoming like the US and UK, where the railways are dying, we are willing to incur a huge oil import bill, 70 per cent of which goes to the transport sector.


Coming back to the budget. All the finance minister needs to do is to consider introducing a tax on vehicles proportionate to their energy efficiencies. If it is a passenger car, then there should be a higher tax on it for its use of publicly funded roads and for the country to import oil. And ratchet up this tax as we go up the passenger car market; the tax should be in proportion to the passenger kilometre efficiencies of the vehicle. This will have three major benefits. It will immediately reduce the long-term congestion we are seeing in all urban centres. It will reduce the oil bill. And it will lead to lower greenhouse gas emission, for which we may even be able to claim for some
benefits under the Kyoto protocol. With this money, the FM can then earmark a hefty increase for investments in public transport.








This is just one instance of what the finance ministry can do. It is how taxation policy should be used; use it to encourage a redistribution that is in the larger interest of society. It is this that the liberalisers miss. For them,
there are no other policies but fiscal policies. For them, taxes are not an instrument for social good but an unwelcome cess on the rich. Unfortunately, global warming is quite class neutral. When it comes, the quality of life, here or elsewhere, it is going to be equally affected. Even if Bush believes US lifestyles are not negotiable. Nature may think otherwise.