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Slide 1: Crisis of mobility What the Union budget should do Centre for Science and Environment January 16, 2008 1

Slide 2: In the beginning of this winter we said Delhi has taken major steps to clean up its air………. …..and yet its air is getting dirty again 2

Slide 3: 2000-04: Delhi made the first quantum leap but it is still struggling… On fuel quality Introduced low sulphur fuels and petrol with 1 per cent benzene Mandated pre-mix petrol to two- and three-wheelers On vehicle technology Enforced Bharat staae II emissions standards in 2000, five years ahead of schedule (BS III in 2005) On alternative fuels Implemented largest ever CNG programme Largest ever public transport bus fleet on natural gas Other cross cutting policy measures Capped the number of three-wheelers Phased out 15 year old commercial vehicles Strengthened vehicle inspection programme (PUC) Efforts made to bypass transit traffic 3 Set up independent fuel testing laboratories to check fuel adulteration

Slide 4: Winter of 2007. Its smog. Still air, dust, smoke, low visibility…lungs are choked again… Daily average levels Monitoring at ITO, Delhi (Aug to October 2007) 338.1 PM2.5 NO2 SO2 340 310 280 250 240.5 microgram/cubic metre 220 190 160 130 100 70 40 10 Aug 07 - Oct 07 4 Source: CSEi

Slide 5: Deadly particles: After a short respite the curve turns upward RSPM 180 microgram/ cubic metre 2002 120 2003 2004 2005 60 2006 0 Res. Areas Ind. Areas 5 Source:CSE

Slide 6: NOx levels: rising steadily NOx NAAQS (R) 60 microgram per cubicmetre 50 1998 microgram/ cubic metre 1999 40 2000 30 2001 2002 20 2003 10 2004 2005 0 2006 Res. Areas Ind. Areas 6 Source:CSE

Slide 7: Air pollution is now a national crisis 100% 4 90% 30 80% Number of cities in per cent 57 70% 60% 50% 96 40% 70 23 30% 20% 19 10% 1 0% SO2 NO2 PM10 Critical Pollution Level* (More than 90 microgramme per cubic metre) Air Quality Classification: High Pollution Level* (60 to 90 microgramme per cubic metre) Moderate Pollution Level* (30 to 60 microgramme per cubic metre) 7 Low Pollution Level* (0 to 29 microgramme per cubic metre)

Slide 8: It is time… …we understood the crisis of numbers…… 8

Slide 9: Our tax proposal for sustainable mobility…….. Our proposal to the Finance Minister……… 1) Remove central excise duty on buses and provide guidance to the state governments to correct the current distortions which tax the bus more than the cars… 2) Do not reduce the current excise duty on cars and SUVs and also maintain the differential between small and big vehicles 3) Increase the excise duty on diesel cars to provide the needed disincentive for the growth of personal vehicles on cheap diesel 4) Revise the central excise duties to link to fuel efficiency and advanced clean emissions norms once the fuel economy standards for vehicles are in place 9

Slide 10: 1) Why zero excise on buses? 10

Slide 11: Explosive numbers Vehicle registration in India: India’s urban population has grown 4.6 times, vehicle 70.0 numbers have increased 158 times 61.4 60.0 Two wheelers, car, jeeps and taxis Other vehicles It took 30 years to reach the first million 50.0 45.6 mark for personal vehicles in 1971. Another 20 years to add two more million 40.0 in millions Then in 10 years (1981-91) increased by 14 million 27.5 30.0 Another 10 years (1991-2001) – jumped by 28 million 17.2 20.0 This decade just in four years (2001 to 11.3 2004) we have added 16 million 9.4 8.0 10.0 6.3 4.2 3.8 2.6 1.8 1.6 1.3 0.9 0.6 0.7 0.4 0.4 0.3 0.1 0.2 0.2 0.2 0.0 1951, 1956, 1961, 1966, 1971, 1976, 1981, 1986, 1991, 1996, 2001, 2004, 11 Source: Computed on the basis of MOSRTH motor vehicle registration data

Slide 12: In 1951, buses were 11 per cent of total registration. By 2004 roughly 1 per cent and dropping each day… Share of Tw o - w heelers, Cars and jeeps (1991-2004) Tw o w heelers Cars and Jeeps Buses 80.00 1.80 71.40 70.92 70.57 70.11 69.81 69.83 69.24 68.82 68.92 70.00 66.44 1.55 1.60 1.40 60.00 1.33 1.30 1.30 values in percentage values in percentage 1.20 1.20 1.15 1.15 50.00 1.08 1.08 1.06 1.00 40.00 0.80 30.00 0.60 20.00 13.82 12.83 12.92 12.83 13.00 0.40 12.44 12.51 12.42 12.38 12.57 10.00 0.20 0.00 0.00 1991 1996 1997 1998 1999 2000 2001 2002 2003 2004 12

Slide 13: Take Delhi: adds 1000 vehicles each day on its roads..Builds new roads; then expands old; then flyovers, now planning flyovers over flyovers….. 2000-01 2005-06 1200 No of registered vehicles per day 994 963 1000 800 654 580 564 600 333 308 400 231 200 0 Cars Tw o w heelers Total private Total vehicles vehicles (private +commercial) 13 Source: Teri

Slide 14: Where is the space for more cars? Between 1996 and 2006 total road length in Delhi has increased by about 20 per cent. But cars increased by 132 per cent Delhi has 21 per cent of its area under roads; only quarter of its population own cars; cars and two-wheelers together drive less than 20 per cent of its people -- and yet roads are choked Availability of Road Length in Delhi 9 2150 8.45 2103 2103 8 7.9 7.88 2087 2100 2070 7.44 7 6.98 6.46 2050 6 in kilometers in kilometers 2000 5 4 1950 1922 1922 3 1900 2 1850 1 0 1800 2000-01 2001-02 2002-03 2003-04 2004 - 2005 2005 - 2006 14 Average length of road per 100 square kilometers Road length per thousand vehicles ( in kilometers)

Slide 15: Peak volume traffic has increased phenomenally Nearly 123 per cent growth on many roads (in PCU/hour) 1990 2004 AIIMS to Dhola Kuan B.S.Gurudwara to AIIMS I.S.B.T. to B.S.Gurudwara Azadpur to I.S.B.T. Raja Garden to Azadpur Dhola Kuan to Raja Garden 0 2000 4000 6000 8000 10000 12000 14000 16000 PCU per hour 15 Source: Based on City Development Plan of Delhi, 2006, Eco Smart

Slide 16: Choked….. Traffic volume exceeds the designed capacity of most of the capital’s key arterial roads. NH8 (Delhi-Gurgaon) is designed for a peak traffic volume of 160,000 vehicles by 2015. There are already 130,000 vehicles fighting for space! Crawling traffic in Delhi: Average vehicular speed drops from 20-27 km/hr in 1997 to only 15 km/hr in 2002. Other road Peak Actual Peak segments designed volume (PCU capacity (PCU per hour) in per hour) 2002 Dhaula Kuan to 8004 10726 Raja Garden B. S Gurudwara 10959 12493 to AIIMS AIIMS to Dhaula 10981 13617 Source: IL&FS 2004 as quoted in CDP Delhi Kuan

Slide 17: Result congestion…. Peak hour traffic speed plummets…It can be as low as 10 hours per hour in Delhi, or 7 km per hour in Kolkata… Congestion costs can be as high as Rs 3000 to 4000 per year. ASSOCHAM study: the commuting population could be losing Rs 420 million human hours in congestion. Each day 2.5 hours are lost in commuting to destinations. ………But Budget does not reflect these costs 17

Slide 18: Vehicles caught in congestion emit several times more Vehicle Emissions vis-à-vis Speed 18

Slide 19: Why this crisis? Public transport marginalised……. Over the years share of public transport buses in the total vehicle fleet dwindles drastically from 11 per cent to 1.1 per cent. But buses meet 60 per cent of the travel demand while they use up less than 5 per cent of the road space Cars occupy 75 percent of the road space but meet less than 20 per cent of the commuting demand. Half of our population are too poor, young, disabled, and old to use cars. It hurts poorer households that spend greater share of their income on transport. Also overall, greater share of household income is being spent on transport… 19

Slide 20: Volume of bus and bicycle traffic is significant and growing MODAL SHARE BY VOLUME AND PASSENGERS CARRIED AT AMBEDKAR NAGAR 100% Non motorised 17 19 90% vehicles 80% 20 Motorised 70% vehicles 60% NMV 50% MV Bus 75 40% BUS 61 30% 20% 10% 8 20 0% % PCU % of Passengers carried

Slide 21: Public transport marginalised……. Impact of motorisation can be severe in smaller cities where public transport is inadequate Share of public transport in different cities 10 0 % 80% 60% 40% 20% 0% Lucknow Delhi Pune Chenna i Hyderaba d hmedaba d Kolka ta A B us C a r, Ta xi, two -wheelers 21

Slide 22: Wrong policies discourage buses 5.6 9 3 50 0 0 0 6 300000 5 2 ,9 0 ,4 3 1 2 50 0 0 0 4 Total tax burden per vehicle 200000 3 kilometer is 2.6 times higher for 2 .3 9 150 0 0 0 Ta x p er buses than cars in India, says vehic le-km 2 10 0 0 0 0 the World Bank. A nnua l 1 0 .4 4 50 0 0 0 ta x 3 0 ,5 2 1 0 0 2 ,7 2 5 Two wheeler C a rs B us To ta l a nnua l ta x p er vehic le To ta l ta x p er vehic le-km Tax correction can encourage buses 22

Slide 23: Subsidy for the rich car owners… State taxes are even harsher….. In Delhi if lifetime tax is amortised for the life of the vehicles then the owner pays roughly Rs 300 as taxes per year. But buses pay for more for carrying passengers. They pay about Rs 13000 per year – 43 times more than cars. . In Mumbai bus occupies one tenth of the road space per passenger compared to personal cars. Cars pay one time registration fee which is only 3.5 per cent of the value. Buses pay hefty annual passenger tax. Cars pay Rs 9000 for life and bus pays Rs 41000 every year. 23

Slide 24: Bus-car policies in states: taxing the poor to subsidise the rich? Number of times the tax paid by Estimated tax paid Estimated tax paid Estimated taxes buses Name of the annually by two - annually by cars paid annually by exceeds state wheelers (only petrol cars) buses a car Haryana 33 100 27,000 270 Punjab 67 267 Delhi 53 533 13,765 26 Himachal Pradesh 80 533 27,000 50 Uttar Pradesh 107 667 1,970 30 Rajasthan 133 800 12,000 15 West Bengal 260 1980 Goa 187 933 12,420 13 Maharashtra 187 1067 Gujarat 100 1333 Chattisgarh 107 1333 97,200 73 Karnataka 187 2400 1,08,000* 45 24 Andhra Pradesh 240 2400

Slide 25: Make it zero excise on buses…… A complete waiver on central excise duty will stimulate investment and growth in the bus sector This should go with the guidance to the state governments that they should also make similar moves to waive off the state taxes State governments should be encouraged to raise funds through dedicated cess for public transport Public transport can enable significant fuel savings. ADB study projects – Bangalore can save 21 per cent of the fuel consumption public share is increased from 62 per cent to 80 per 25 cent.

Slide 26: 2) Do not reduce the current excise duty on cars and SUVs Maintain the differential between small and big vehicles…. 26

Slide 27: No further sops…. Already car owners are enjoying enormous hidden subsidies… Paying pittance for road space and parking… If parking charges begin to reflect true cost of investments, parking fee could be as high as Rs 30 to 40 per hour. But actually pay Rs 10 at most. Most cities do not even charge for parking. Do not reduce the current excise duties on cars and SUVs – 16 per cent on the small cars and 24 per cent on big cars and SUVs. This differential in taxes for small and big cars must continue. Higher tax on big; lower on small cars. 27

Slide 28: 3) Increase the excise duty on diesel cars as disincentive for the growth of personal vehicles on cheap and toxic diesel 28

Slide 29: Dieselised Diesel cars, jeep and vans in Delhi 140000 120000 100000 Numbers 80000 60000 40000 20000 0 Agency Red alert on diesel 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 exhaust US EPA (2002) Likely human carcinogen Diesel car Diesel Jeep Diesel Van CARB (1998) Toxic air contaminant 1999: Diesel cars only 2% of the new car HEI (1995) Potential to cause cancer sales in Delhi. NIOSH (1988) Potential occupational carcinogen 2007: Diesel cars are 30% of new car IARC (1989) Probable human sales carcinogen 2010: It is projected to be 50% of the WHO IPCS Probable human29 sales (1996) carcinogen

Slide 30: Diesel cars: More losses One diesel car emits as much NOx as 3 to 5 petrol cars; PM as much as 7 petrol cars --- But Central government earns Rs 15.18/litre from every litre of petrol and Rs 5.20 per every litre of diesel. -- Due to crude oil price hike oil companies lose Rs 3.64 per litre of diesel and Rs 1.72 on petrol 30 --- Lower excise concession on small diesel cars further adds to the subsidy

Slide 31: Take away economic incentive for diesel…… Ideally price of diesel and petrol should be equalised…but unrealistic given the constraints of different economic groups… …….But this is a loophole Increase excise taxes on diesel cars to 32 per cent. 31

Slide 32: 4) Link taxes to fuel efficiency and advanced clean emissions norms once the fuel economy standards for vehicles are in place 32

Slide 33: Use taxes to build markets for cleaner and efficient technologies Government is working on mandatory fuel efficiency standards for vehicles. Bureau of Energy Efficiency has the mandate to finalise standards. In the future vehicle taxes should be revised so that they are linked to efficiency. Grant tax concession to advanced and efficient technologies like hybrids, battery operated, alternative technologies which meet emissions standards before due date of implementation 33