[Reader-list] The world’s cheapest car?

[Sanjay Kak]

While our corporate media goes blue in the face extolling the virtues
of the Nano—including something called the people-centered world-view
behind it—here is a salutary note from Sunita Narain of the Center for
Science & Environment, and Editor of Down to Earth magazine.

Sanjay Kak

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Down to Earth - Editorial:

The right right

by Sunita Narain

The world’s cheapest car, the Nano, rolls out in India this week.
Manufacturer Tata Motors says it will change the way Indians drive,
for the inauguration places the personal car within the reach of
people who once could only dream of owning one. Indeed, the Nano has
been marketed as an ‘aspiration’- the right of every Indian to a car.
No quibble here. There is no question an affordable car is better than
an expensive one; or that a small car, being more fuel efficient, is
better than a big one. No question, too, that every citizen of India
has as much right to a car as every citizen of America, where vehicle
numbers are obscene: some 800 vehicles for 1,000 people (old and
young) against our measly 7 per 1,000 people (urban and rural).

Let me roll out my concerns. The issue is not the Nano. The issue is
all cars and whether cars still are the future of the world economy.
Over years, in different continents, vehicle manufacturers invented
and re-invented this appliance for self-mobility, for different market
segments. In India, two-wheeler manufacturers can rightly claim that
over the 1980s they, too, provided technology innovation and
affordable mobility for vast numbers. They can also claim they were
the first to break the class barrier. Then, in the early 1990s, when
Sanjay Gandhi’s people’s car, the Maruti 800, hit the roads, gender
barriers also fell - this was a car women could drive and it gave new
freedoms. No question, therefore, of what Nano will bring to new
owners.

But this launch comes at a time when the production of personal
vehicles itself is becoming old - economy. It is not surprising the
car industry has become the first big dinosaur of the 21st century.
Every country today is working to bail out its automobile industry.
The big four companies are still on the brink of closure. There is
huge over -capacity in the world of cars - sales are down and the
industry is bleeding. You might think it is a temporary phase: cars
will zoom again, as recession blues turn pink. But this is far from
the reality.

The fact is cars could only make it big in the old economy because
they were highly subsidized, or incentivized through cheap bank loans.
If people could not afford the next car, the bank worked overtime to
make sure the loans kept rolling, even if that eventually broke the
bank’s back. But that is the past. The future, too, will not be too
different. The bank might recover, but the cost of the fuel to drive
the dream vehicle will not. Oil experts will tell you black gold
prices will rise again, when the world economy re-boots.

Add to this what can only be called the mother of all subsidies - the
free-ride personal vehicles have got, in the world, to emit large
amounts of greenhouse gases and pump them into a common atmospheric
space. As the rights over this ecological commons will be determined,
as they must, carbon dioxide emissions from the cars of the rich will
have to be limited and taxed. This will cost. It will make driving
more expensive.

The global automobile industry knows it is not our future. It is our
past. Unfortunately, this message has not yet come home. Unlike the
car-saturated West, we still have a large number of people who are
potential buyers. But the fact is in India, because of the even
greater price-sensitivity, personal vehicles are viable only if they
are subsidized to the brim.

Take the Nano. My colleague Chandra Bhushan has calculated the
incentives rolled out by Narendra Modi’s Gujarat government amount to
a fat write-off - as much as Rs 50,000-60,000 per this Rs 1 lakh car.
In other words, its cost is so low only because the state has doled
out a largesse. Every past and present automobile has got this benefit
(more or less). We can afford a car because our government pays for
it. We can also afford it because we are not asked to pay the price of
its running - the tax on cars is lower than what buses pay in our
socialist country. We do not pay for its parking, a cost, which, if
added, would make us think twice before we bought or drove our new
dream vehicle, whatever the variant.

As the Nano rolls out, think of how we subsidize the car and tax the
bus. Public buses pay taxes as commercial passenger vehicles, each
year and based on the number they carry. In many states, they pay over
12 times more tax than cars. Think of the public transport bus service
in your city and ask how much of its revenues go in taxes: half, in
most cases. Think also that the same Tata company, that has managed to
roll out the car of our dreams in record time, does not possess the
capacity to build the buses cities need.

Such an old-economy approach becomes completely perverse when one
considers that already today, and definitely tomorrow, the greater
proportion of people who are or will commute are using and will
continue to use public transport - a bus or a train. Today, as much as
half of rich Delhi takes a bus, and another one-third walk or cycle
because it is too poor to even take the bus.

Think again about the car inequity in India - 7 per 1000 people. Can
the government write off the costs - Nano style - so that all can buy
the car? Can the government pay for our parking, our roads and our
fuel, so that all can drive the car? If not, then is this the right
right at all?

The issue, then, is not the right to own a Nano. The issue is the
right to a slice of the public subsidy so that everybody has the right
to mobility. There is no other right.

Read this editorial online: http://www.downtoearth.org.in/cover_nl.asp?mode=1
To comment, write to cse at equitywatch.org
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Also
Watch video to find out who wins in the race to emit more
http://www.youtube.com/watch?v=F7aHCCI45pA
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