Opinion

Auto sales: Govt took the bold step of charging the proper price of car driving

Auto sales: Govt took the bold step of charging the proper price of car driving

Whatever you do, do not try to make people virtuous in a democracy.

This reflection is provoked by the sad state of the motor vehicles industry in the country. It is the victim of the choice of consumers not to own cars any more but to just hire them for each trip as and when necessary. Perfectly sensible and economically rational. The government also took the immensely bold step of charging the proper price of car driving. This is environmentally sound and economically efficient.

This has obviously raised the cost of driving. Not the price of buying a car but the cost of ownership and driving. The car industry thus faces a crisis. The immediate panic is about how to stem the crisis. Yet the question has to be asked what about the majority of the country who use the road and the pavement (if no cars have invaded the pavement), whose lungs need some respite from the pollution caused by cars? Do they not have a vote?

Yet much worse is happening with the Motor Vehicles Act, a fine piece of legislation to make car drivers behave in a responsible fashion. Indeed, it is the first time the government has taken a grown-up view of cars and stopped indulging the car-owner rather than the pedestrian. But what do we see? A virtual revolt, with state after state not implementing the Act or diluting the fines. It is as if every state wants to become autonomous from the Indian Union. Even Gujarat, the BJP’s mascot and Prime Minister Narendra Modi’s home turf, has modified the fines. GST next? That much for One Nation.

The car industry’s slump raises larger issues. The GDP growth rates for the last two quarters have been below 6 per cent. Is this a cycle or a trend? The answer is in two parts: trend for the car industry, cycle for the economy. These are early days yet but the dominant theme around the world is climate change. The movement to do something about it is being led by the young across the world. They do not just talk about what governments should do but change their own lifestyle. In Western countries there is a rise in the number of vegans who avoid meat, eggs and dairy products as environmentally harmful, being animal products. They ride bikes or hire taxis rather than use cars.

As a mode for personal transport, the car is a luxury. It may be an aspirational must have, to show off that you have arrived, but that is your self-delusion. Even so, there is a difference between securing a car ride when you need and owning it round the clock. Automobile transport is unbeatable for mass movement of people (buses and ambulance ) and goods (trucks). Buses which are comfortable and plentiful enough to provide seating for every passenger would improve our cities.

In the short run, the car industry will get what it demands. Money speaks louder than pedestrians. But we ought to prepare for transition to electric cars and to the hiring rather than owning mode for passenger cars. India should lower its dependence on consumer expenditure for sustainable growth. The car manufacturing industry is shrinking globally, look at General Motors. India has to steer it to reduce its size.

This article first appeared in the September 15 print edition under the title ‘Out of my Mind: Chalti ka naam gaadi’.