Third Way for India

Nitin Rao — Sat, 24 Nov 2007 23:38:43 -0500

Agree completely on the need for a third way for India. Whether this will happen, however, is really anybody's guess. My guess is that we will see the initial spurt of sales, enthusiasm and congestion - rather than something more proactive.

Is There a Third Way to Think About Low-Cost Cars?

Rob Katz — Tue, 06 Nov 2007 13:33:57 -0500

By Ethan Arpi and Rob Katz

While discussions of Ratan Tata's 1 lakh car - and other entrants to the ultra-cheap car market - are nothing new to NextBillion.net and many other blogs, the concept received another burst of publicity over the weekend when New York Times columnist Thomas Friedman featured it in a piece entitled No, No, No, Don't Follow Us. Friedman - whose column is syndicated in newspapers throughout the world - argues that while Americans don't occupy the moral high ground when it comes to driving, following the American model of motorization would be catastrophic for India's economy and its environment.

Friedman's point is well taken: if India doesn’t leapfrog the American model, it risks choking its economy on smog and traffic. (See China; Beijing for a sobering look at the potential future.) Not convinced? The statistics speak for themselves: There are 11 personal vehicles for every 1000 eligible drivers in India. China, another country inundated by the tide of urbanization, has nine personal vehicles per thousand eligible drivers. How many does the United States have? The answer is staggering: 1,148! Anyone who has sat in traffic in Mumbai knows this is no joke - at 11 cars per 1,000 eligible drivers, India is already maxing out its city’s streets.

One possible solution - the American model - is to simply build more roads to accommodate more cars. India's already trying that - with little success. Friedman notes that a recently-opened highway in Hyderabad has already reached capacity, suffering from the very bottlenecks it was built to prevent. The perverse incentive of road construction is that it encourages private car ownership, which, in turn, encourages more road construction. It’s a vicious cycle that ends by destroying cities that were originally meant to be saved.

We argue that there is a third way for India: It should neither replicate America's car-centric model, nor should it try to build its cities without sufficient mobility. Rather, based on smart planning and good policy, Indian cities can be shining examples for other cities around the world, accommodating unprecedented growth while improving the economic, environmental and day-to-day lives of their residents.

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Third Way for India

Is There a Third Way to Think About Low-Cost Cars?