Automobiles Can Banish Unemployment and Poverty

Re: # 22
Interesting point. Replacing old with new efficient one is definitely a worth consideration. But the real solution to the environmental problem is only in a total paradigm shift.
The other solutions at best are ad hoc, though not to say that they should not be adopted. But we cannot ignore the big picture.
But it is not easy for man to learn (collectively) and I fear that we are in for a sudden and big shock if we don't hear the wake up calls.

The impact on environment is a very serious concern. Modern cars and commercial vehicles are 90% less polluting than cars were 10 years ago and those are even more polluting today with wear and tear, bad maintenance and over loading. So there needs to be a war on the old vehicles (except for a few classics)that should be withdrawn and replaced with clean engined new cars and other vehicles. There also needs to be a war on overloading that causes huge pollution. The world today has about 700 million cars, 200 million commercial vehicles and 100 million 2-wheelers.

We are forgetting the impact on environment. In the present circumstances the growth in automobile industry will play havoc with environment. Following the Western model of progress is shortsightedness. India has to show leadership to the world by coming with innovative solutions. Of course, it is easier said, hard to do. It is very complex problem but Eastern countries have to come up with new solutions if we have to save ourselves from extinction. Ghandian spirit must be revived. I think Matma's work is in the right direction though I have not read much about Indian political scene.

#18 Dost_mittar
a quick question. When the kids grow taller and their shoes do not fit their feet, would you advise cutting their feet to fit the shoe or go buy a new pair of shoes?

India is growing, its economy is growing, the hard working people of India have earned the right to buy a car. it is not a luxury anymore. Solution is to develop a planned soliution to increase public transport system for those who can not yet afford the cars & develop a roadsystem & a highway system all over India. people like you are going to just waiste valuable time with your anti-growth arguments & will make it even harder for any progress to be made in a few years.
We need to develop a new environmental friendly solution to spread the highway system & cars & the industrial revolution & its fruits to indian people.
We have now learnt the environmental issues from the industrial nations & we can avoid those mistake. however the TIME is NOW to expand the erach of Indian people or it will be too late.

I am quite impressed with the Nano project.

Baig Saheb:

You have provided some interesting contours of how the multiplier effect works in the auto sector. It was this multiplier effect which made the GM manager once famously say that what was good for General Motors was good for America. Most studies in the US suggest a multiplier effect of seven, i.e., for every direct job created in the auto industry, seven are created in other sectors; however, I believe that, for US at least, large amount of outsourcing may have reduced this multiplier to some extent.

I think that you have overestimated somewhat the tax on automobiles in India, the Tatas estimate that their ex-factory cost of one lakh would mean a consumer price of around Rs. 1.25 lakhs; as you know the way mod-vat works is that you get taxed only on value added at the stage of production and not on the entire component. And I, for one, am a full supporter of taxing what is still a non-essential item for more than 80% of the population. After all, a large number of these car owners manage to not pay any income tax at all.

I think that some cities, definitely Delhi, have now reached a saturation point. In many streets, people park on both sides of the road (perpendicular to the curb) in such a way that it becomes difficult for cars to pass each other. In localities where a few years ago, there were only a few cars, now each household has two or more cars; and where there was once one house, there are now eight flats, meaning 15 or more cars.

It may surprise some of you that in Canada and the US, scooters are becoming popular for the first time (someone better tell Bajajs, one sees only vespas here!). The current upsurge in oil prices has caused a paradigm shift in people's thinking and ridership in public transit has increased by 10-15% in each major city.

Finally, I hope that India does not make the same mistake that North America made and construct a whole economy on the auto sector, so much so that the economy becomes a hostage to the auto sector. Make sure that you own the car and not the other way round.

Murad Sahib:

A intereting current topic with great transformational effect on the future.

1. The taxes you mention are applicable to all manufactured goods that are traded in inter-state commerce in India. This irrational tax structure creates more corruption and inefficiencies in movement of goods than it generates revenue for the government.

2. You missed the employment that construction of highways will bring jobs to the villages they will pass through. Both commerce (including taxation) and transportation infrastructures are archaic. Someone needs to research it out.

3. In early 90s I had set up India's largest electronic manufacturing operation, that was exporting 50% of India's export of computer hardware. It received numerous awards from the government. I never made any money, despite it being at par in efficiency, productivity and quality with Singapore, and Hong Kong (China was not even on the scene of electronic manufacturing at that time).

The problems I found later in the business model were that (a) physical movement of goods in and out of point A to point B in India has digustingly inefficient and added almost 11 days to the pipeline; (b) financial infrastructure was so inefficient, that the exchange rate spread (in buying and selling of dollars) ate almost 4% of the sale, where margins at best are 10 - 15% of sale.

For high volume manufacture of low cost autombibles (or computer parts), there is a need not for just-in-time, but on-demand manufacturing. Just-in-time, allows vendors to hold OEM manufacturers to purchase what is ordered, whereas in on-demand manufacturing there is no such requirement. The manufacturer gets it on-demand. This forces a burden of efficient supply chain down the pipeline.

On-demand manufacturing was a dramatic shift in the U.S. in 80s for relentless cost cutting to keep manufacturing jobs in the U.S. Now the same is achieved from the plants in China.

This is a cultural shift in doing manufacturing business in India, yet to happen in India.

Non-polluting, fuel efficient autos is the needed product to trigger the kind of economic transformation you have talked. There is no doubt that auto industry is an economic growth pole and very good in creating jobs and distributing jobs everwhere in the society. Including the villages these cars are driven, and highways pass through them.

Tatas can certainly do it. It is as fundamental as agricultural revolution. It touches everyone.

MAB sahib,

Cattle not only fart but also give gobar and urine (the famous Hindoo gaomutra), which are good fertilisers and helps plants fix CO2. Cattle are sustainable CO2 generators, cars are not.

Regards

Murad Saab,

Are we in a farting competition against cattle...hahaha

By the way cattle are as polluting as automobiles contributing to 27% of world environmeent pollution. The methane in the flatulence is 30 times worse that CO2 for depleting ozone. To control this England and New Zealand had proposed a `fart tax'. But with nearly 300 million cattle India has over 25% 0f the world's cattle

Mujumdar you reflect most people's conventional thinking. No one can claim that the auto is a magic wand but just see what it has done for Malaysia for example. Cars are taxed heavily but there is almost no tax on petrol so everyone is mobile and the economy is in pretty good shape. Their toll express ways are only for fast motorised movement between towns and by law every citizen has to have access to a good network of toll free secondary roads. City roads are for access to other homes and offices and highways are for fast inter city movement. When India's highways go through a town it soon becomes a slow main street with slow mixed traffic. It takes ages to get out of any Indian city.

People are not prisioners of their own areas and can easily buy, sell or seek employment in a wide radius. Big towns are not allowed to grow and nearby satellite towns grow fast to pick up migrants from rural areas.

Nkg moshai,

I agree that agriculture, agro-based industries as well as other labour intensive industries like textiles, consumer goods, toys etc would have to grow fast if inclusive growth and employment have to be targetted (like China).

But auto industry has got its own multipliers and there is no reason why its growth should be discouraged.

Regards

Vengat...
I don't believe something called "Hinduism". Each region and ethnic group has its own set of cultures. I do go to temples, but I don't feel every one has to go.So, there is no point bringing Hinduism in the matter.

Re: # 5
Majumder...
Automobile industry is not going to fuel India's growth. Though it is very labour intensive and has some short cycle of life, it needs very high quality infrastructure and maintenance, which takes toll on environment. The best industry suited for India should be Agri based. There are lot of scope for improvement in this ares. The amount of employment Garment sector generates, is much higher than that of automobile.

Murarilal G,

Gadi for every family will cause environmental disaster. Mass transportation is good for environment, community building and stress free lives. Just as gadi your other writing and paid G-giri pollutes and destroys society.

Where is your progressive identity Murarilal Lakhanpurkar?

How is the research going on Gomati Mutt and HanumanBadi? Have you heard about Begam Rubia and Begam Aliya?

MAB sahib,

Especially in Delhi where people love driving and flaunting their cars, people will keep driving irrespective of how much public transport is there.

Automobile industry has also created a huge auto components sector and some of these like the Kalyani-Bharat Forge group is already on the road to becoming a big international supplier.

Regards