April 22, 2024


Can a congestion tax help alleviate India’s traffic problems?

If you live in a large Indian metropolitan city, there’s a high probability that you’ve been stuck in a traffic jam. It’s gotten exponentially worse over the years since more people have private vehicles. Then there are the large buses, autos, and two-wheelers. Add to that mix people not following traffic rules properly. It all makes for a nightmare scenario on Indian roads.

So, what can be done about it? It’s a type of problem that doesn’t have a consensus solution. A lot of money is invested in transport infrastructure, but that hasn’t helped much. What about a congestion tax? It’s one proposal that’s gotten some people interested. You pay more to the government if you use your vehicle during peak hours at specific locations. Is this a good idea?


In a recent report by Amsterdam-based location technology specialist TomTom, Bengaluru and Pune were among the top 10 worst traffic-hit cities in the world. The Tom Tom Traffic Index assessed over 380 cities across 55 countries to highlight the impact of traffic on travel time, fuel costs, and emissions.

Bengaluru, at number 6, had an average travel time of 28 minutes and 10 seconds. Pune, 7th place, had an average travel time of 17 minutes and 50 seconds. Delhi and Mumbai also appeared on the list at 44th and 52nd, respectively.

There was more bad news for Bengaluru as it was deemed the second most congested city after Dublin in 2023. The report specifically pinpointed September 27 as the worst day to travel in the IT capital when it took an average of 32 minutes to cover 10 km.

The cause is quite simple – more people now live in cities than ever before. That’s only likely to increase in the years ahead since people see cities as better places to live and make a living. In Bengaluru, the population has increased by over two-fold in the past couple of decades.

As people attain higher standards of living, they buy cars. The existing roads and infrastructure aren’t equipped to handle the load. It’s unsustainable.

All this comes at a cost. Apart from frustrated commuters and wasted time, traffic congestion affects the environment with increased emissions, reduced productivity, and increased business costs. A Boston Consulting Group study from 2019 showed that the total cost of congestion in India was $22 billion. That could rise to $37 billion by 2030.

Last year, a study showed Bengaluru lost an estimated ₹20,000 crore due to years of traffic congestion. You can imagine something similar for other Indian cities. Add it all up, and you get a staggering amount of money lost due to traffic congestion.

One solution is a congestion tax. It was even proposed in Bengaluru. The Karnataka government proposed a tax on vehicles entering specific roads during peak hours. The money would be collected through the FASTag system, and toll booths with cameras would monitor vehicles. Could this be something that helps ease traffic congestion? Or are we looking at this all wrong?

VIEW: An idea worth trying

Let’s face it, traffic congestion isn’t going away anytime soon in India. In all likelihood, it’s going to get worse. Something needs to be done about it because dissuading people from buying cars isn’t going to happen. Especially when the country’s public transport infrastructure isn’t what it should be. What a congestion tax can do is at least persuade a certain portion of people to choose public transport.

What cities need is a balance between private and public infrastructure. The government obviously can’t force people to not buy cars. What they can do is make it just a little more expensive to use it as often as they would like to. From the government’s point of view, it’s good news. They earn revenue from two sources – public transport and the congestion tax.

Other states and cities in India, like Tamil Nadu, Odisha, and New Delhi, have all mulled over some form of congestion pricing. Outside India, Stockholm, Singapore, and London have congestion charges. In London, which marked 20 years of congestion charging last year, the results have been remarkable. Bus travel has increased in central London with an overall 30% reduction in congestion. While it might take a couple of years to get the technology and infrastructure up and running, it could definitely have a positive effect.

COUNTERVIEW: It’s the wrong approach

It’s well and good that other big cities around the world have successfully implemented congestion taxes. One thing to note here. Hundreds of cities globally have traffic congestion, but only a handful have been able to implement congestion pricing. So, it’s difficult to implement for political, technical, and economic reasons.

One issue officials are bound to run into in India is the decentralised nature of local civic governance. Take Mumbai, for example. There are several metros located within the Mumbai Metropolitan Region – Mumbai, Thane, Navi Mumbai, etc. Metro and urban authorities have conflicting sectoral, physical, and administrative boundaries. Each municipal zone has a different political party leading it. It’s not like Singapore, where there’s a fixed central administration.

When a congestion tax was proposed for Bengaluru, the response was immediate – no! The immediate retort was to “fix the city’s public transport and infrastructure before anything else”. Bengaluru also has a complicated relationship with cab and bike-taxi aggregators. What about them? Also, depending on how the congestion tax map is drawn, people might just opt for arterial roads to avoid paying the tax. There are just too many variables to consider to make a congestion tax work in India.

Reference Links:

  • Forget Mumbai, this city tops the list for worst traffic congestion in India – The Economic Times
  • The impact of public transport on traffic congestion in cities – ORF
  • Congestion pricing economics – ORF
  • Will a congestion tax make our roads better? – Deccan Herald
  • Bengaluru residents slam ‘auto mafia’, carpool ban as city mulls congestion tax – Moneycontrol
  • ‘If you wait till everybody owns a car, everybody will vote against road-pricing policy’ – The Hindustan Times
  • Congestion pricing to solve traffic jams? Not so fast! – Ideas for India

What is your opinion on this?
(Only subscribers can participate in polls)

a) A congestion tax can help alleviate India’s traffic problems.

b) A congestion tax won’t help alleviate India’s traffic problems.


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