The Praful Bidwai Column
The unaffordable Rs 1 lakh car
"RS 1 lakh car drives 1 billion dreams," "Tata reinvents the wheel," screamed the headlines as the media rapturously welcomed Tata Motors' Nano amidst rousing music. The car has been called "revolutionary" and a "historic breakthrough" which makes "every Indian inches taller," and will trigger innovation in manufacturing technology the world over!
The Nano is expected to do to India what Ford's Model-T did a century ago to the United States by "democratising" car ownership. It's being depicted as an achievement not of one business group or industry, but as the triumph of the nation, with its consumer-citizens.
However, the Nano is marked by inadequate safety and emission standards. Thanks to its low price, it will greatly expand India's market for cars. Their proliferation will cause unbearable traffic congestion, enormous pollution and health damage, and set back the all-important fight against global warming
Automobile proliferation won't "democratise" society. In a poor and frugal society, cars polarise; they don't unite.
The Nano's most attractive, iconic feature -- the Rs 1-lakh price -- is probably an illusion. It hides big subsidies.
The Tata Motors plant coming up in West Bengal, which will produce the Nano, is subsidised by at least Rs 850 crores by the state government, according to economist and former finance minister Ashok Mitra. This works out to one-fourth of the project's capital cost.
To further sweeten the deal, the government has gifted to the Tatas 50 acres of prime land just outside Kolkata and another 200 acres close by to build IT and residential townships. The total subsidy may, thus, be huge.
Besides, the super-attractive price is only applicable to the bare-bones model as an introductory offer. Mr. Ratan Tata said: "We may not be able to hold the price emotionally. We have to understand that steel and tyre prices … are rising."
The Nano's cost has been ruthlessly pared down. The upside is unconventional thinking focused on minimalism, which may trigger industry-wide cost-cutting.
The downside is the cutting of corners to produce a car with low longevity and high maintenance, which fails the current Western emission and safety standards, and will soon fail Indian norms too.
For instance, the Nano's designers used a hollow shaft instead of a solid beam to connect the steering-wheel to the axle, and plastics and adhesives instead of many bolts. The car's wheel bearings will wear out rapidly beyond 70 kmph.
It has only one windshield-wiper instead of two. It uses obsolete continuous variable transmission. To save just Rs 400, devices called actuators, which adjust the angle of the car's lights to its load, were eliminated.
This is likely to affect the car's safety, sturdiness and durability/longevity. Some impacts will only become apparent once it has been used for a few years. Till then, safety and reliability questions will remain.
The Nano doesn't remotely meet the current Western emission standards like Euro-IV, and will soon fail Indian standards too. Tata's claim that the Nano meets prevalent national standards Bharat-II and -III isn't verified independently.
Euro-IV norms will come into force in India's major cities in April 2010, and are much stricter than Bharat-II or III. Under them, sulphur emissions must be reduced 35-fold over Bharat-II.
Similarly, long-overdue safety standards are on their way. These include full-body crash tests -- which determine how cars crumple in collisions -- airbags and anti-lock brake systems. Implementing them will raise costs by 40 to 50 per cent.
According to pollution experts, ultra-cheap, bare-bones cars like the Nano lack the complex technology needed to maintain its initial level of emissions, which could grow four- to five-fold.
Under the Nano trend, industry will rush to produce ultra-cheap cars by exploiting India's poor emission standards. Bajaj Auto, Volkswagen, Nissan and GM are already in this race.
The addition of stripped-down cars will further slow down urban traffic -- whose speed has almost halved recently. This will greatly increase pollution, which has reached critical levels in three-fifths of India's cities.
Yet, India is following a policy under which a car can legally occupy the same space as a slum-dwelling family considered fit for eviction.
This must radically change so that public transport is given top priority and people can be moved in safe, efficient and environmentally sound ways and have equitable and affordable access to public transport.
Automobilisation of transport spells high social costs, resource waste, air pollution, global warming, and iniquitous use of road-space. In most Indian cities, cars and two-wheelers hog 60 to 80 per cent of space, but deliver 15 to 20 per cent of passenger trips.
By contrast, buses occupy under 20 per cent of road-space, and account for up to 60 per cent of trips. Cars demand high levels of maintenance, repairs and parking space. They usually occupy prime space -- even when unused.
Studies show that if car-owners were made to pay the economic rent for parking, many would stop using them. In the central districts of many Indian cities, for instance, the true annual market price of parking-space per car would exceed its nominal cost 5 to 10-fold!
Cars are an extremely inefficient form of transportation. They slow down public transport, causing further congestion and an enormous waste of social time.
Above all, cars pollute. Automobile emissions of particulate matter, and oxides of nitrogen and sulphur account for 60 percent-plus of the air pollution load in our cities, itself fraught with grievous health damage. Fine particulates contain some 40 known carcinogens.
If present trends are allowed to continue, India's car market will annually grow at 14.5 per cent by 2013. By 2020, more than 150 million Indians and 140 million Chinese will have cars.
If this happens, it will become near-impossible to achieve major reductions in global greenhouse gas emissions. China and India account for as much as 70 per cent of the recent global increase in energy demand.
The Nano should provoke us all to rethink transportation policies in keeping with the requirements of equity and reversing climate change.
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