Draft Discussion Paper on Integrated Transport Policy

2.1 The transport sector has expanded manifold in the first fifty years of planned development both in terms of spread and capacity as indicated in the Annexure. Along with this increase in quantity, there are several welcome developments of qualitative nature, such as emergence of a multi-modal system in the form of container transport, marked reduction in arrears of obsolete assets, improvement in the self financing capacity of the sector and the establishment of new centres of excellence for manpower development.

2.2 Impressive as this progress is, the country’s transport system is far from adequate both in terms of spread and capacity and suffers from a large number of deficiencies.The quality and productivity of transport network and resources also needs to be improved.

The net ton kilometres per route kilometre for the railways is 4.21 million in India whereas for China this figure is 23.4 million.
The Indian road network is seemingly very large. However only 46% of the roads are paved and only 20% of the paved roads are estimated to be in good condition.
The transport system of the country is currently saturated on both the main rail and road links and capacity shortages are a serious constraint on overall growth.
The high density corridors of rail and road linking metro cities and ports are completely choked. Out of the total route kms. identified for four laning, around 50% is carrying traffic which is more than twice its capacity.
About 14000 kms of National Highway require four laning, while 5500 kms require widening from single lane to two lane to facilitate normal flow of existing road traffic.
The average productivity of a truck is 200 kms. a day as against 350-400 kms. that could be possible through reduction of congestion..
The ports are also facing severe congestion . The utilisation rate is over 100% as compared to international norms of 60 to 65% and this leads to long waiting time which actually discourages established shipping lines from coming to Indian ports.

2.3 The road network though extensive remain inadequate in terms of spread. Out of nearly 6 lakh villages, only 60% are known to be connected by all-weather roads at the beginning of the Ninth Plan, although connectivity for the large sized villages (more than 1000 population) is much better.

2.4 The demand for transport is obviously affected by structural changes taking place in the economy, some of which push in opposite directions. For example, a decline in the share of agriculture and an increase in the share of manufacturing may increase the growth in demand for transport. However, slower growth in population may reduce the growth in demand for transport but this may be offset by the fact that the share of the mobile population (ages 15-60) is likely to increase. Taking all factors into account, it is expected that traffic elasticity with respect to GNP will continue to decline in line with the past trends but it will still be around 1.25. A growth rate of 7.5 % in GDP would therefore mean an increase in freight traffic demand exceeding 9 %. This growth in transport demand has to be met by expanding domestic supply as transport infrastructure is non tradeable. Investment in transport must reflect the need to make up for existing capacity shortages and also to allow for growth in demand.

2.5 With the diversification of the economy, the share of high value low volume traffic is also likely to increase which calls for more flexible modes of transport, namely roads or high quality and efficient rail container services. Urbanisation and growth of the economy may also fuel demand for passenger traffic.

2.6 Transport planning will have to give priority to creating a policy framework which ensures an adequate flow of resources to this sector. Budgetary resources are likely to be very scarce but transport infrastructure development will have to be treated as one of the high priority areas for continued budgetary resource allocation. However, even if this is done the total need for resources will greatly exceed the capacity of the budget to meet the costs of maintenance and expansion. Internal generation of resources through rational pricing and other user charges is therefore absolutely essential for successful development of transport infrastructure. In view of the severe resource constraint, it will also be necessary to give priority in public investments to those projects which sustain the agricultural and industrial growth of the country and support the country’s foreign trade. Freight transport, therefore, has to be accorded higher priority than passenger travel which has not happened in the past.