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Transportation transports economy


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Executive Summary: Since the inception of civilization and formation of kingdom in different parts of world, transportation system played a critical role within and between economies of the world. The first trade routes established a rudimentary system of distribution and transactions that would eventually be expanded by long distance maritime. Global trade and economy has benefited in last century due to advancement in technology which introduced different forms of transportation to bring connectivity within and between continents. . Since, the 18th century international migration that occurred were linked with the expansion of international and continental transport systems that completely changed the shape economies such as in North America and Australia. Transport has played a catalytic role in these migrations, transforming the economic and social geography of many nations. World has witnessed surge in global economy and trade among countries in last 60 years after the end of World War II, the emergences of emerging economies like India, China, Brazil, Russia, South Africa, Mexico, etc. in last 20 years has fueled the global economy, but this transformation also brought new challenges and opportunities for both developed and developing economy. Being a world’s largest democracy, which combined with China represents 36% of global population, has a great potential in their growing economy. Transportation sector as a part of Economy has to play a critical role in shaping India’s Economy in 21st century, which eventually added immense value to global economy.

Importance of Transportation in Economy The transportation is an important component of the economy impacting the development and the welfare of the population. It has been empirically proved, when transport system are efficient, they provide economic and social opportunities and benefits that result in positive multiplier effect such as better accessibility to markets, employment, and additional investments. Transport also carries a social an important social and environmental load, which cannot be neglected. Thus, from general standpoint the economic impacts of Indian transportation sector can be direct and indirect; Direct Impacts related to accessibility change where transport enables larger markets and enables to save time and cost. Indirect Impacts related to the economic multiplier effects where the price of commodities, goods and services drop or their variety increases. One of the most fundamental and important characteristics of any economic activity is “Mobility”, which plays a critical role in satisfying basic need of going from one location to another location. By considering “Mobility” as a central point for economic and social development, India’s transportation sector in 21st century has to assess the market from Microeconomic and Macroeconomic perspective.

Key Challenges in India’s Transport Sector: India’s transport sector is large and diverse; it caters to the needs of 1.2 billion people. As per 2007 estimate transport sector contributed about 5.5% to the nation’s GDP, with road transportation contributing the largest share. India’s roads are congested and of poor quality- Lane capacity is low- majority of national highways are two lanes or less; Rural areas have poor access; Railways are facing a severe capacity challenges; Urban centers are severely congested; Ports are congested and Inefficient; Airport Infrastructure is strained. Possible Policy Strategy: Transportation plays a key component in linking factors of production in an economy. Considering the present rate of economic growth and surging urban population, in next 30 years more than 40% of India’s population will reside in urban settings. Our National Transport Vision should be; An Integrated national transportation system that can economically move anyone and anything, anywhere, on-time. A transportation system without any injuries. A transportation system that should be not dependent on foreign energy supply. Sustainable energy should be harnessed to fuel the National, regional and local Transport system.( with respect to GHG emission concern, and noise)

Improvement in Urban Transport System: Urban transport systems have been linked to growing economic opportunities has been recognized since the beginning of Industrial revolution. Considering the significance of Transportation in building economic networks within cities. Public transport systems should be strengthened by bringing big ticket investments in Tier1 and Tier 2 cities. • Metro Rail Network has to be encouraged in mega (Tier1) cities, with greater connectivity to commuter’s destination. • Transportation companies needs to be encouraged to invest in Green Fuel Buses. Bus manufacturing companies and Transport services provider needs to be encouraged to develop dual-use buses, City Bus Corporation should setup their captive Solar Power Plant to supply electricity to Buses services, which can be swapped with natural gas in unfriendly climate. • Electric and advanced cycle rickshaw will bridge the gap between nearest bus and metro station and commuter’s destination points. Transport Corporation should encourage this system in saving fuel consumption in cities. A separate arm of Transport Corporation develops it as viable business model for city transportation. • Dedicated lane for three wheelers (Cycle Rickshaw, Cycle, Auto Rickshaw) and separate lane for Bus (in the form of BRTS) needs to be encouraged in mega and major cities. • Considering the problem of congestion in city road network, Double Decker buses needs to be encouraged in all major cities. This will also help in reducing fuel consumption level of Transport corporations. • Linear relation between Metro Rail, City Bus and local Auto and Cycle Rickshaw by clubbing them through single ticket system. • SEZ(Special Economic Zones) and NMIZ(National Manufacturing Industrial Zone) should be a possible special purpose vehicle (SPV) for attracting investment for economic activities, Industrial unities are encouraged to reduce their transportation cost by operation in a dedicated business estate, which possibly be called as sustainable Manufacturing. Dedicated Freight Corridor: Transport network plays a role of artery in Economic and Business development of any nation. Fast and smooth connectivity between Business districts across India boost productivity and economic efficiency. • High speed inter-city rail system that connects its primary population centers. By providing a high-speed alternative to highways, dependency on automobiles is reduced, and less energy consumed. • Dedicated Fight corridor in Eastern sector and western sector is key for better transportation of goods between business districts on two fronts and also reduce the dependency on energy consumption, which has tripled and transport sector as a whole increased its consumption level by 28% is at alarming level. • Indian Railway has to encourage private players who will give new boost to freight terminals through public-private terminals. • Government should incentivize National Railway and metro corporations in setting-up captive solar plant, and the dedicated plants will supply green fuel to High speed inter-city rail system which connects prime Business districts and major cities plus also intra-city metro rail corporation. • Multilateral agencies should set up dedicated fund for developing countries in encouraging research in universities and research centers on Sustainable Energy.

Possible Sustainable Business Strategy: Transportation cost is constrained in Balance sheet of corporations across globe. Transportation cost needs to be addressed in Business sustainability strategy. Market intervention is a possible way to encourage corporation to reduce transportation cost, Sector wise Transportation Index could be possible instrument to reduce their transportation cost. Trade and Business bodies should encourage corporations in reducing transportation costs by awarding Certificate, and providing possible concessions.

References 1. http://people.hofstra.edu/geotrans/eng/ch7en/conc7en/ch7c1en.html 2. http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/INDIAEXTN/0,,contentMDK:22354859~pagePK:141137~piPK:141127~theSitePK:295584,00.html 3. http://www.indianground.com/upcoming-cities.aspx 4. http://www.alibaba.com/showroom/electric-cycle-rickshaw.html

Summary


Category of the action

Reducing emissions from transportation


What actions do you propose?

Executive Summary: Since the inception of civilization and formation of kingdom in different parts of world, transportation system played a critical role within and between economies of the world. The first trade routes established a rudimentary system of distribution and transactions that would eventually be expanded by long distance maritime. Global trade and economy has benefited in last century due to advancement in technology which introduced different forms of transportation to bring connectivity within and between continents. . Since, the 18th century international migration that occurred were linked with the expansion of international and continental transport systems that completely changed the shape economies such as in North America and Australia. Transport has played a catalytic role in these migrations, transforming the economic and social geography of many nations. World has witnessed surge in global economy and trade among countries in last 60 years after the end of World War II, the emergences of emerging economies like India, China, Brazil, Russia, South Africa, Mexico, etc. in last 20 years has fueled the global economy, but this transformation also brought new challenges and opportunities for both developed and developing economy. Being a world’s largest democracy, which combined with China represents 36% of global population, has a great potential in their growing economy. Transportation sector as a part of Economy has to play a critical role in shaping India’s Economy in 21st century, which eventually added immense value to global economy. Importance of Transportation in Economy The transportation is an important component of the economy impacting the development and the welfare of the population. It has been empirically proved, when transport system are efficient, they provide economic and social opportunities and benefits that result in positive multiplier effect such as better accessibility to markets, employment, and additional investments. Transport also carries a social an important social and environmental load, which cannot be neglected. Thus, from general standpoint the economic impacts of Indian transportation sector can be direct and indirect; Direct Impacts related to accessibility change where transport enables larger markets and enables to save time and cost. Indirect Impacts related to the economic multiplier effects where the price of commodities, goods and services drop or their variety increases. One of the most fundamental and important characteristics of any economic activity is “Mobility”, which plays a critical role in satisfying basic need of going from one location to another location. By considering “Mobility” as a central point for economic and social development, India’s transportation sector in 21st century has to assess the market from Microeconomic and Macroeconomic perspective. Key Challenges in India’s Transport Sector: India’s transport sector is large and diverse; it caters to the needs of 1.2 billion people. As per 2007 estimate transport sector contributed about 5.5% to the nation’s GDP, with road transportation contributing the largest share. India’s roads are congested and of poor quality- Lane capacity is low- majority of national highways are two lanes or less; Rural areas have poor access; Railways are facing a severe capacity challenges; Urban centers are severely congested; Ports are congested and Inefficient; Airport Infrastructure is strained. Possible Policy Strategy: Transportation plays a key component in linking factors of production in an economy. Considering the present rate of economic growth and surging urban population, in next 30 years more than 40% of India’s population will reside in urban settings. Our National Transport Vision should be; An Integrated national transportation system that can economically move anyone and anything, anywhere, on-time. A transportation system without any injuries. A transportation system that should be not dependent on foreign energy supply. Sustainable energy should be harnessed to fuel the National, regional and local Transport system.( with respect to GHG emission concern, and noise) Improvement in Urban Transport System: Urban transport systems have been linked to growing economic opportunities has been recognized since the beginning of Industrial revolution. Considering the significance of Transportation in building economic networks within cities. Public transport systems should be strengthened by bringing big ticket investments in Tier1 and Tier 2 cities. • Metro Rail Network has to be encouraged in mega (Tier1) cities, with greater connectivity to commuter’s destination. • Transportation companies needs to be encouraged to invest in Green Fuel Buses. Bus manufacturing companies and Transport services provider needs to be encouraged to develop dual-use buses, City Bus Corporation should setup their captive Solar Power Plant to supply electricity to Buses services, which can be swapped with natural gas in unfriendly climate. • Electric and advanced cycle rickshaw will bridge the gap between nearest bus and metro station and commuter’s destination points. Transport Corporation should encourage this system in saving fuel consumption in cities. A separate arm of Transport Corporation develops it as viable business model for city transportation. • Dedicated lane for three wheelers (Cycle Rickshaw, Cycle, Auto Rickshaw) and separate lane for Bus (in the form of BRTS) needs to be encouraged in mega and major cities. • Considering the problem of congestion in city road network, Double Decker buses needs to be encouraged in all major cities. This will also help in reducing fuel consumption level of Transport corporations. • Linear relation between Metro Rail, City Bus and local Auto and Cycle Rickshaw by clubbing them through single ticket system. • SEZ(Special Economic Zones) and NMIZ(National Manufacturing Industrial Zone) should be a possible special purpose vehicle (SPV) for attracting investment for economic activities, Industrial unities are encouraged to reduce their transportation cost by operation in a dedicated business estate, which possibly be called as sustainable Manufacturing. Dedicated Freight Corridor: Transport network plays a role of artery in Economic and Business development of any nation. Fast and smooth connectivity between Business districts across India boost productivity and economic efficiency. • High speed inter-city rail system that connects its primary population centers. By providing a high-speed alternative to highways, dependency on automobiles is reduced, and less energy consumed. • Dedicated Fight corridor in Eastern sector and western sector is key for better transportation of goods between business districts on two fronts and also reduce the dependency on energy consumption, which has tripled and transport sector as a whole increased its consumption level by 28% is at alarming level. • Indian Railway has to encourage private players who will give new boost to freight terminals through public-private terminals. • Government should incentivize National Railway and metro corporations in setting-up captive solar plant, and the dedicated plants will supply green fuel to High speed inter-city rail system which connects prime Business districts and major cities plus also intra-city metro rail corporation. • Multilateral agencies should set up dedicated fund for developing countries in encouraging research in universities and research centers on Sustainable Energy. Possible Sustainable Business Strategy: Transportation cost is constrained in Balance sheet of corporations across globe. Transportation cost needs to be addressed in Business sustainability strategy. Market intervention is a possible way to encourage corporation to reduce transportation cost, Sector wise Transportation Index could be possible instrument to reduce their transportation cost. Trade and Business bodies should encourage corporations in reducing transportation costs by awarding Certificate, and providing possible concessions. References 1. http://people.hofstra.edu/geotrans/eng/ch7en/conc7en/ch7c1en.html 2. http://www.worldbank.org.in/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/INDIAEXTN/0,,contentMDK:22354859~pagePK:141137~piPK:141127~theSitePK:295584,00.html 3. http://www.indianground.com/upcoming-cities.aspx 4. http://www.alibaba.com/showroom/electric-cycle-rickshaw.html


Who will take these actions?


Where will these actions be taken?


How much will emissions be reduced or sequestered vs. business as usual levels?


What are other key benefits?


What are the proposal’s costs?


Time line


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References