Traffic woes in Delhi might end soon!

Will traffic woes in Delhi come to an end soon? Well, as the Delhi Government Transport Department plan to impose ‘Congestion tax’, the situation will hopefully improve.

The Urban Development Ministry is considering the Italian city’s ‘Ecopass concept’ (which links the congestion pricing with the engine emission levels) combined with congestion taxation models of London, Singapore and Stockholm to replicate in New Delhi.

Before going further, let’s understand the concept of congestion tax. The procedure of congestion taxation is implemented in a city by identifying major traffic nodes in the city and creation of tax zones complying with these traffic nodes. There would be a hefty charge levied from the private vehicles passing through or entering these zones.

This will lead to increased fluctuation in the commercial property pricing at major commercial districts based on the impact on the retail footfall of these areas (which possess more possibility for imposition of these tax zones). Example, Connaught Place could see a positive inclination with increased public transport usage if the area is delineated as a congestion tax zone and will lead to rental value appreciation which further boosts the capital investments in the area in future.

Example to follow

So, has it been a success in any country? Well, one good example of a city with successful implementation of the concept is London, UK. Congestion charges in London is based on the ITS (Intelligent Transportation System) adopting automatic number plate recognition (ANPR). The charges are levied on private vehicular passage on specific timings synchronising with the peak hours of the traffic and excluded on weekends and holidays as an incentive.

Impacts in depth

Congestion taxation could possibly be a cure to the increasing traffic problems in the city. Introducing the concept of congestion taxation could definitely ease the vehicular movement in the capital city encouraging more ridership with public transport options like Metro rail, City Bus Services or intermediate private transportation through hired vehicles such as auto rickshaws or cabs.

Dividing the urban demography based on the income profiles and analysing the economic psychology, much part of the LIG segment would be diverted to public transport choices Metro or Bus services, MIG group is intended to hire auto rickshaws or cabs, while HIG group may shred their trips involving these tax zones to avoid penalties. But there would be a fourth segment comprising of HNIs who would be undeterred by the implementation of the congestion taxation and are targeted by these zone activities transforming the areas to adapt to the consumer demography.

Thus, the concept of congestion taxation is obvious to affect the zones which would be identified by the government authorities, which is most likely to contain the busiest commercial nodes in the city. Therefore, with greater portion of the population belonging to the LIG and MIG segments, there could possibly be diversion or decentralisation in the development of commercial or wholesale activities in these zones. This will give rise to competitive markets in other prime locations, while leaving these areas to be completely oriented towards the ultra luxurious HNI segment.