Congestion tax on vehicles to be levied soon in Indian cities

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In an effort to curb heavy traffic on city roads, the government plans to implement congestion charges on vehicles. The first city to start imposing the congestion tax on its vehicles would be the capital of India, New Delhi with the cities of Pune, Bangalore and Mumbai to follow soon. About 11 lakh vehicles enter New Delhi from other states on a daily basis adding to the existing traffic of the 70 lakhs vehicles owned by the city. The net result is traffic crawling at an average speed of 12 kms per hour, increased pollution and a high cost of travel in terms of both time and money. 

The congestion charge is aimed to discourage people from using private means of travel and encourage them to use public transport to commute. Based on the congestion pricing concept which postulates that people should be penalised for the problems they contribute to, the new charges hope to curb the number of vehicles on the roads thereby reducing the emission of greenhouse gases and the impact on the environment.

New Delhi would not be the first city to levy congestion charges on vehicles. Such a system of taxation has been implemented in many cities around the world. Singapore was one of the first to impose congestion charges on vehicles as far back as 1975. Since then it has developed and implemented several effective systems to control the traffic. As a result, less than 30% of households own cars despite being able to afford one. London implemented congestion charges on vehicles in 2003. Stockholm has completely unmanned systems with automatic number plate recognition installed to monitor traffic going in and out of areas marked as congestion zones since 2007. Bangkok and Beijing are other cities where congestion charges have been levied effectively.

The plans for levying congestion fees on vehicles are still in the conceptual stage and it remains to be seen how the congestion charges would be implemented in New Delhi. One option would be to levy a charge on every vehicle from other states entering the city. Parking charges for the business districts such as Connaught Place and high density shopping areas such as Lajpat Nagar should be increased in addition to an entry fee to these and other identified districts. Already, the Delhi government increased registration and taxation of personal vehicles to put a plug on the number of new cars on its streets every year.

The levy of congestion charges on vehicles may or may not reduce the number of vehicles on the roads. People may feel the monetary burden but still continue to use private cars instead of public transport system. Some believe that the city lacks the technical expertise to implement an automatic system to charge and collect the congestion fees efficiently. Others believe public transport, even with the metro rail, is not equipped enough to cater for all the commuters. Women feel unsafe when travelling and prefer to have their own means of transport. While some others believe peripheral expressways need to be built to divert the traffic that passes through New Delhi in order to reach its destination.

While the concept of congestion fees on vehicles has been effective in cities around the world, public support is needed to make it a success in India.