Wednesday, February 16 2005 18:36 Hrs (IST) - World Time -

Part I

Some of us own one, few of us own several and a majority of us aspire to have one; and the Car is fast becoming an important part of our every day life. The machine that changed the world over last century or so is now impacting the Indian society from a variety of angles.

For a majority of the years of independent India we just saw two cars running in the country and the third, custom made Rolls Royce used by the highest dignitaries of the Country. We admired different designs and models rest of the world produced and used by watching them in photographs and motion pictures.

With the adventure of Sanjay Gandhi and the economic liberalisation later, made a market in India for cars of all sizes. Started with a small, owner driven car we now have graduated into the market where SUVs are becoming a fashion. India experienced phenomenal growth in car sales, though the increase in debt in the hands of public was almost proportional to acquire those magnificent machines.

Last winter, I actually saw the annual motor expo in the United States. The industry pundits declared 2003 as the year of SUVs and on my return to India after a brief stay, I have noticed people opting to buy utility vehicles to luxury cars.

As the year 2004 came to the end I saw many models of UVs launched in India and the sale has picked up instantaneously. If the trend continues, 2005 will become the year of UVs and SUVs in India with all top car-makers introducing at least one utility vehicle.

In urban areas there is a discussion about second car becoming a necessity in some of the high-income groups and the car becoming a necessity in middle class households.

All these trends as per the conventional economic analysis shows India shining and the middle class is now with much more disposable income that it ever had in the history of independent India.

The car sales are soaring like cancer in all directions. People are not hesitating to borrow to buy cars and not hesitating to burn petrol like water. Surely, a section of Indians are representing new economic liberalism - a situation admired by majority for a long time in Independent India.

While the auto industry is happy about finding a new market, share prices of Maruti, Tata or any other auto-maker in India grow with the announcements of results. These companies are receiving exciting growth in addition to international car-makers.

But, equally alarming situations are to be observed emerging as side effects of this sudden change of income levels, spending habits and lifestyles.

The increase in disruptions, accidents and death on road is a direct result of this trend. We are noticing a very high incidence of road accidents and we have witnessed death of some of the upcoming political leaders as well. Traffic disruptions have become a feature of city life across the country.

The main reason we can see are; the investments flowing into the auto industry, investments flowing into the individual lives as debt to pay back the growing investments in the auto industry were not compensated by investments in infrastructure.

We are now in such a position where we do not even know if we grow our vehicles at this rate, what should be the size of roads we require, what kind of alternative roads we require etc and the town planning administrators are giving permissions to new housing projects blissfully without really measuring the possible increase of vehicles in that area.

This is resulting into multiple problems. Apart from the time loss because of traffic disruption and human loss in accidents, there has been great depletion in public health because of anxiety neurosis they are suffering.

Increasing pollution levels are impacting our young and old citizens. In addition, the increased running behind acquiring the new is taking away the satisfaction from the lives of public leading to more and more depression and anxiety.

Who should help this situation? Should the auto makers withdraw themselves because they appear to be the source of the problem or should the Government of India stop them from selling in India; going back to the protection regime or should the banks stop financing the car buying? Or should the individuals abstain from buying cars and thus feel that they are enjoying the best lifestyle?

None of the above questions are valid because we should not stop development just because we cannot handle it skilfully. The source of the issue is the attitude of elected Governments and regulators but a whole lot of players in our society need to play a role to make sure that our world does not become place to hate.