ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Road Rationing and Economic Gains

Assessing Delhi’s Odd–Even Formula

The Delhi government's move to allow only alternate use of cars with odd and even registration numbers from 1 January 2016 is a step in the right direction. However, even as such command and control measures will be difficult to sustain, the gains made from these measures will only wane over time. Long-term measures with strong economic incentives to ensure favourable outcomes are imperative for better quality of air and environment. This involves strengthening public transportation systems.

The recent decision of the Delhi government to permit private vehicles with odd or even registration numbers to run on alternate days has created a stir. The policy envisages reducing the number of vehicles on Delhi roads by about 50%, which is expected to reduce the level of air pollution in the city. The policy attracted appreciation from quite a few quarters on grounds of improvement in environmental quality. However, many looked at it with dismay as they did not have an inkling of how to manage commuting when the new policy comes into effect. The magnitude of the problem can be imagined if we visualise a scenario where about 42.4 lakh private vehicles will be banned from plying on road1 on any given day. People commuting in these vehicles needed to be accommodated in existing alternative modes of transport such as buses and the metro. The alternative to private vehicles, that is, the public transport system in Delhi, is inadequate, irregular, and overcrowded as usual.

Against this backdrop, this article examines the economic gains of the new policy decision and explores the possibility of attaining the policy objective through alternative means.

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