Performance Appraisal of Transport
Sector in India during Globalization - A case study of Road Transport Sector.
Subroto Kumar Ghosh
Research Scholar
University Department of Commerce & Business
Management
Ranchi University, Ranchi
Dr. Dilip Kumar Sahu
Assistant Professor
Department of Commerce, J. N. College, Dhurwa,
Ranchi
Abstract
Transport is the backbone of economic, cultural, social
and industrial development of any country besides its two dimensional role of
creating time and space utilities. This sector has not received due
consideration either of universities or academic institutions. The transport
industry which undertakes nothing more than the mere movement of persons and
things from one place to another, have constituted one of the most important
activities of men in every stage of advanced civilization. However
recent Research and
Development facilities provided by the Indian Universities in the
Departments of social sciences, especially Economics, Commerce and Management
Sciences and other Transport related research
institutes have shed light on problems and prospects
of transport sector.
Keywords
globalization, transport network, economic
liberalization, economic development.
INTRODUCTION :
Transport sector plays a vital
role in the development of economic of a nation. In fact, the progress of a
nation and progress of its transport sector is complementary to each other. The
Road Transport sector has a lion’s share in India’s economic development. Due
to easy accessibility, flexibility of operations, door to door service and
reliability, Road Transport
in India showed an increase in share of both passenger and freight traffic
vis-à-vis other modes of transport.
With the economic development of infrastructure in India,
the country has progressed at a rapid pace and today there is an availability
of wide variety of modes of transport by land, water and air. But, overall Road
Transport is the primary and preferred mode of transport for most of the
population and India’s Road Transport system is among the most heavily utilized
system in the world. It plays a pivotal role in the economic development of a
nation by increasing the productivity and competitiveness. The Indian Central Government and the State
Governments after realizing the importance of the road networks in economic
development have taken numerous initiatives to improve the national road
network, both in terms of upgrading the quality and augmenting the magnitude to
keep pace with the demands dictated by the economic liberalization. The
benefits and importance of Road Transportation infrastructure to economic
growth have been recognized for a long time.1 A well oiled
transportation infrastructure expands the productive capacity of a nation, both
by increasing the mobilization of available resources and by enhancing the
productivity of those resources. The support for this statement is
straightforward and there are many ways through which we can justify it.
Firstly, Road Transportation infrastructure can enter the production process as
direct input and in many cases as an unpaid factor of production. Secondly, it
may make other existing, inputs more productive. For instance, a well designed
road al- lows the transportation of goods to market in less time and hence,
reducing the transportation cost in the production process. Thirdly, Road Transportation
increases regional economic growth by attracting resources from other regions.
In this vein one would recall that throughout the growth of civilization, most
centers of economic activities flourished along riverbanks and coast lines
where water ways the convenient prime carrier of raw materials goods and
labour. With the initiation of the economic reforms in 1993 the transport
sector of the nation has shown good performance. Transport is basically a
derived demand depending upon the size and structure of the economy and the
demographic profile of the economy.
A
well-knit and coordinated system of Transport plays an important role in the
sustained development of country. Transport sector in India comprises of
various modes of transport such as roads, railways, air, shipping, inland
waterways and metro rail. One of the dominant segments in India’s
transportation sector is Road transport. Road transport is vital to the
economic development and social integration of the country. Easy accessibility,
flexibility of operations, door-to-door service and reliability have earned
road transport a greater significance in both passenger and freight traffic
vis-à-vis other transport modes. Road transport facilitates the movement of
goods and people. Road transport is the primary mode of transport which plays
an important role in the movement of goods and passengers. It is also a key
factor for promoting socio-economic development in terms of social, regional
and national integration.2
MATERIALS
AND METHODS :
For the purpose of in depth study the
contents have been taken from interview, relevant books and articles from
journals and websites. The method used is analytical and descriptive. Both
primary as well as secondary sources of information have been taken.
RESULTS
AND DISCUSSIONS :
Definition
of Transport
The word ‘transport’ is derived from the
Latin word ‘transportare’ which comprises of two expressions, viz., ‘trans’
which means ‘across’ (or the other side’) and ‘portare’ means ‘to carry’. In
short transport means carrying from one place to another.
Oxford
English Dictionary defines transport as “a system or means
of conveying people or goods from place to place.”
Merriam-Webster's
Dictionary defines transportation as “means of conveyance or
travel from one place to another and a public conveyance of passengers or goods
especially as a commercial enterprise.”
Considering these definitions, the term
'transportation' refers to any means of carrying people or products for
multiple purposes.
The
Road Transport Corporation Act 1950 section 2(e), “Road
Transport Service” means a service carrying passengers or goods or both by road
in vehicles for hire or reward.
Functions of Transport 3
i.
Transport contributes in Growth of industries whose product requires
quick marketing. Perishable articles like fish and green vegetables are
carried to various consumers quickly even in distant markets through transport.
ii.
Transport helps in increase in the demand for goods. Through transport newer
customers in newer places can be easily contacted and products can be
introduced to them. Today markets have become national or international only
because of transport.
iii.
Transport creates place utility. Geographical and climatic factors force
industries to be located in particular places far away from the markets and
places where there may not be any demand for the products. Transport bridges
the gap between production and consumption centers.
iv.
Transport creates time utility. Of late transport has started creating the
time utility also. It has been made possible by virtue of the improvements in
the speed of transport. It helps the
product to be distributed in the minimum possible time.
v.
Transport helps in stabilization of price. Transport exerts considerable influence
upon the stabilization of the prices of several commodities by moving
commodities from surplus to deficit areas.
This equalizes the supply and demand factor sand makes the price of
commodities stable as well as equal.
vi.
Transport ensures even flow of commodities into the hands of the consumers
throughout the period of consumption.
vii.
Transport enables the consumers to enjoy the benefits of goods not produced locally. This increases the standard of living, an
essential factor for further development of marketing and economy.
viii.
Transport identifies competition, which in turn, reduces pries. Prices are
also reduced because of the facilities offered by transport for large-scale
production. An advantage of large-scale production is possible only due to
transport.
ix.
Transport increases mobility of labor and capital. It makes people of one
place migrate to other places in search of jobs. Even capital, machineries and
equipments are imported from foreign countries through transport alone.
Historical
background of Transportation
The History of Transportation covers the entire history of man. Early Paleolithic and Neolithic man walked
through his world on his own legs, and couldn't transport more than he was able
to carry on his back. In the late Neolithic, Beasts of Burden began to be used
after animal’s domestication, but even then they could only carry what could be
loaded or tied to animal's backs. After
sometimes early man wanted to move large stones or other heavy objects and
invented the log roller for this task. There is evidence that many cultures in
many geographic areas used simple log roller technology, but dating this is
difficult and extensively used log rollers eventually inspired the development
of the wheel. A lot of the early information is theoretical and un documentable
for History as such, and is really more in the domain of Archeology or
Anthropology, but is the preface to the History of Transportation.4
The history of
road transport started
with the development
of tracks by humans and their beasts of burden.
Animal-drawn wheeled vehicles probably developed in the time of Sumer. The
chronological development of transport can be classified in the following
manner:
From the beginning
of human history
people have dragged
any load too heavy
to be carried.
But large objects
are often of
awkward shape and texture,
hence difficult to drag on rough ground.
The natural solution is to move them on a platform with smooth runners
known as a sledge.
Wooden
sledges are first known by at least 7000 BC, among communities living by
hunting and fishing in northern Europe, on the fringes of the Arctic. The
domestication of cattle and more particularly the ox makes it possible that
humans can transport heavier loads than before.
This is done at first on sledges, which slither adequately over the dry
grassland of southern Russia and on the dry earth of Mesopotamia. In both
regions ox-drawn sledges are in use by the 4th millennium BC.
A wagon is used more than 5000 years ago, near what is
now Zurich. It has two pairs of solid wooden wheels, each attached to an axle,
which turns with them. The wagon is extremely heavy and if once it stuck in
mud, it stays where it is. It is now one of the earliest known examples of
wheeled transport.
Whether first developed
as ‘an invention'
in one place,
or re-invented in several wheels seem to have evolved as a
natural solution to the problem of transport
in areas where both oxen
and wood are available. By 2000 BC heavy wheeled transport is in use
in a region stretching from northern Europe to western Persia and
Mesopotamia. For even greater glamour,
and far greater speed, two new elements are needed - the horse and a spoke
wheel.5
The horse is available in Mesopotamia by about 2000 BC.
Not much later a two-wheeled chariot is developed. Its superstructure is made
of a lightwood, and its wheels are not solid; their rims are of bent wood, held
in place by spokes. A horse can pull a chariot at a trot at up to 8 miles an
hour - and at a gallop twice as fast.
In subsequent centuries, up to relatively recent times,
travel improvements are mainly limited to transport on the sea. They are the
result of larger ships and of better methods of navigation.
On land one large new beast of burden is domesticated -
the camel. But the main improvement in classical times derives from the
construction of roads, first in the Persian and then in the Roman Empire.
The cutting of canals for irrigation has been an
essential part of the civilization of Mesopotamia, controlling the water of the
Euphrates and the Tigris. Several canals link the two rivers, and small boats
use these waterways. But the world's
first canal created purely for water transport is an incomparably more
ambitious affair.
Between about 520 and 510 BC the Persian emperor, Darius
I, invests heavily in the economy of his newly conquered province of Egypt. He
builds a canal linking the Nile and the Red Sea. Its access to the sea is close
to modern Ismailia, which much later becomes the terminus of another great
waterway, the Suez Canal.6
The great network of Roman roads was the arterial system
of the then empire. It is
constructed largely by
the soldiers of
the legions, often
with the assistance of prisoners
of war or slave labor. As the amount of labor involved is vast, these highways
are elaborate technological undertakings.
One of the important purposes of the Roman roads was
speedy communication; there were post houses with fresh horses every 10 miles
along the route and lodgings for travelers every 25 miles. By the 2nd century
AD the network spreads all round the Mediterranean and throughout Europe up to
the Danube, the Rhine and northern England, amounting in all too some 50,000
miles. However, even though the very impressive achievement of the Persian roads,
travelers on foot
or horseback have
rarely been so
well provided for.
Transport in the 20th Century
Although the first cars appeared at the end of the 19th
century, after the First World War they became cheaper and more common. However
in 1940 only about one in 10 families owned a car. They increased in number
after World War II. By 1959 32% of households owned a car. Yet cars only became
really common in the 1960s. By the 1970s the majority of families owned one.
In 1903 a speed limit of 20 MPH was introduced. It was
abolished in 1930. However in 1934 a speed limit of 30 MPH in built-up areas
was introduced. Meanwhile in 1926 the first traffic lights were installed in
London. A driving test was introduced in 1934. Also in 1934 Percy Shaw invented
the cat's eye. The parking meter was invented by Carlton Magee. The first one
was installed in the USA in 1935. In 1983 wearing a seat belt was made
compulsory.
Meanwhile in 1936 Belisha Beacons were introduced to make
road crossing safer. The first zebra crossing was introduced in 1951. In 1931
an American called Rolla N. Herger invented the first breathalyzer. It was
first used in Indianapolis USA in 1939. A Swede named Nils Bohlin developed the
three-point seat belt in 1959.
Meanwhile in the late 19th century horse drawn
trams ran in many towns. At the beginning of the 20th century they
were electrified. However in most towns
trams were phased out in the 1930s. They gave way to buses, either motorbuses
or trolley buses, which ran on overhead wires. The trolleybuses, in turn were
phased out in the 1950s. Ironically at the end of the 20th century
some cities re-introduced light railways.
In the mid-20th century there was a large
network of branch railways. However in 1963 a minister called Dr. Beeching
closed many of them. 7
The first hovercraft was launched in 1959. The first hovercraft passenger service began
in 1962. In 1919 aero planes began carrying passengers between London and
Paris. Jet passenger aircraft were introduced in 1949.
However
in the early 20th century flight was a luxury few people could
afford. Furthermore only a small minority could afford foreign travel. Foreign
holidays only became common in the 1960s. The Boeing 747, the first 'Jumbo jet'
was introduced in 1970. The Channel Tunnel opened in 1994.
Significance of Transport 8
Transport plays a significant role
in the overall economic development. Transportation results into growth of
infrastructure, industrialization and massive production.
Advancement in the transport sector
has resulted into comfort and convenience. Well-functioning transportation
systems form the basis for economic prosperity and social well being of
societies.
1. Industrial Growth
Transportation and the Industrial
development are interrelated. Without improved modes of transportation it would
have been harder for the industrial producers to produce and then sell their
goods to the wider markets.
Transportation facilitates movement
of raw material and other requirement from the place of supply to the place of
production. Efficient transport is indispensable to the economic development of
the nation.
2. Creates Employment
Transport also contributes to
economic development through job creation. It creates both direct and indirect
employment opportunities. In India, a sizeable portion of the country’s working
population is directly or indirectly employed in the transport sector.
It also facilitates movement of
labors and thereby encourages employment resulting into industrial development
and thereby economic development.
3. Creates Place Utility
Transportation enables movement of
commodities from the producer to the final consumer whenever and wherever they
are demanded. It creates place utility. Transportation plays an essential role
in the agricultural sector.
Agricultural requirements are made
available to the farmer at a short span of time. It is an integral part t of
commerce. It gives place and time utility to goods by removing them from the
place of production to the places where they are to be consumed.
4. Bring Countries Closer
No country in the world is
self-sufficient. They have to depend on one another to fulfil their
requirements. Transportation has brought the countries closer. It not only
caters to the need of mobility but also provides comfort and convenience.
Travelling is a part of our daily
lives. People travel for business purpose, education purpose I and vacation
purpose etc. The transport system is doing a great job by easing the pain of
covering vast distance of land thereby bringing the countries closer.
5. Serve Several Purposes
Transportation provides access to
natural resources and promotes trade, allowing a nation to accumulate wealth
and power. Transportation also allows the movement of soldiers, equipment, and
supplies during war.
Hence transportation is vital to a
nation’s economy as it serve several purposes. It includes the manufacture and
distribution of vehicles, the production and distribution of fuel, and the
provision of transportation services.
6. Stability in Prices
Goods can be transported to places
where there is scarcity and the prices are high from places where there is
surplus and the prices are low. Such transfer of goods from the place of
surplus to the place of scarcity enables to stabilize the prices of the
commodity. Thus stability of prices restricts the local producers to charge
prices at their own will. This discourages monopoly and encourages competition.
7. Specialization and Division
of Labour
Transport increases the mobility of
labour and capital, widens the market that leads to specialization and division
of labour, which helps in stabilizing prices. Specialization provides
employment to a very large number of persons.
It is only due to transport that
modern industrial system and large-scale industries are in a position to
develop. Without efficient transport it would not have been possible to procure
raw material, gather large number of workers and distribute the finished goods.
8. Use of Economic Resources
Transportation enables society to
enjoy advantages of specializations of resources, and the benefits of labour by
making it possible for products to be brought great distance, thus avoiding the
necessity for local production for all conceivable commodities of need.
Each economic region can thus
concentrate upon the goods and services for which it is best adapted either
through natural resources endowment or through historical development. It,
thus, leads to a better economic use of available resources.
9. Standard of Living
Transportation raises the standard
of living, making possible improved housing, clothing, food and recreation.
The Concept of Globalization
Globalization
refers to the increasingly global relationships of culture, people and economic
activity. Most often, it refers to economics: the global distribution of the production
of goods and services, through reduction of barriers to international trade such as tariffs, export fees and import
quotas. Globalization
accompanied and allegedly contributed to economic growth in developed and
developing countries through increased specialization and the principle of comparative advantage. The term can also refer to the
transnational circulation of ideas, languages and popular
culture. Opponents
alleged that globalization's benefits have been overstated and its costs
underestimated. Among other points, they argued that it decreased
inter-cultural contact while increasing the possibility of international and
intra-national conflict.
9
The term was first employed in a publication
entitled Towards New Education
in 1930, to denote a holistic view of human experience in education. In the
1960s the term began to be used by economists and other social scientists. The
term reached the mainstream press in the latter half of the 1980s. Since its
inception, the concept of globalization has inspired competing definitions and
interpretations, with antecedents dating back to the great movements of trade
and empire across Asia and the Indian Ocean from the 15th century onwards. Charles Taze Russell coined the related
term 'corporate giants' in 1897, to describe the largely national trusts and
other large enterprises of the time. 10
The United Nations Economic
and Social Commission for Western Asia (ESCWA)
say globalization is: “a widely-used term that can be defined in a number of
different ways. When used in an economic context, it refers to the reduction
and removal of barriers between national borders in order to facilitate the
flow of goods, capital, services and labour, although considerable barriers
remain to the flow of labour. Globalization is not a new phenomenon. It began
towards the end of the nineteenth century, but it slowed down during the period
from the start of the First World War until the third quarter of the twentieth
century. This slowdown can be attributed to the inward-looking policies pursued
by a number of countries in order to protect their respective industries
however, the pace of globalization picked up rapidly during the fourth quarter
of the twentieth century.
India had the
distinction of being the world's largest economy in the beginning of Christian
era, as it accounted for about 32.9% share of world GDP and about 17% of the
world population. The goods
produced in India had long been exported to far off destinations across the
world. Therefore, the concept of globalization
is hardly new to India.
11
India
currently accounts for 2.7% of World Trade (as of 2015), up from 1.2% in 2006,
according to the World
Trade Organization (WTO). Until the liberalization of 1991,
India was largely and intentionally isolated from the world markets, to protect
its fledgling economy and to achieve self-reliance. Foreign trade was subject
to import tariffs, export taxes and quantitative restrictions, while foreign
direct investment was restricted by upper-limit equity
participation, restrictions on technology transfer, export obligations and
government approvals; these approvals were needed for nearly 60% of new FDI in
the industrial sector. The
restrictions ensured that FDI averaged only around $200M annually between 1985
and 1991; a large percentage of the capital flows consisted of foreign aid,
commercial borrowing and deposits of non-resident Indians.
India's
exports were stagnant for the first 15 years after independence, due to the
predominance of tea, jute and cotton manufactures, demand for which was
generally inelastic. Imports in the same period consisted
predominantly of machinery, equipment and raw materials, due to nascent industrialization.
Since liberalization, the value of India's international trade has become more
broad-based and has risen to
63, 0801 billion in 2003–04 from 12.50 billion in 1950–51. India's trading partners are China,
the US, the UAE, the UK, Japan and the EU. The
exports during April 2007 were $12.31 billion up by 16% and import were $17.68
billion with an increase of 18.06% over the previous year. 12
India is a
founding-member of General
Agreement on Tariffs and Trade (GATT) since 1947 and its successor,
the World
Trade Organization.
While participating actively in its general council meetings, India has been
crucial in voicing the concerns of the developing
world. For instance,
India has continued its opposition to the inclusion of such matters as labour
and environment issues and other non-tariff barriers into the WTO policies.
Performance
of Transport Sector in India
Good transport infrastructure is essential for
socio-economic development of a country. India’s transport network is vast and
diverse comprising an extensive road network of 3,329,105 kilometers and 65,808
route kilometers of rail network geographically connecting the country along
its length as well as breadth. India also has an established aviation industry
with international and domestic airline services currently being provided
through 11 international airports and 89 domestic airports. India’s huge
coastline of 7,517 km also provides significant opportunities for water based
transportation services through a total of 12 major and 200 non major ports1 and
14,500 km of navigable inland waterways set up along the coastline. 13
The transport sector in India has grown extensively,
especially post-independence, both in terms
of physical spread
as well as
capacity to meet
the mobility demands
for both passengers as well as
freight. Despite its impressive growth, it is seen that the existing transport
infrastructure in India is far from meeting the growing mobility needs in terms
of coverage, capacity as well as service quality. In fact, the current
transport growth trajectory has brought along several negative externalities in
terms of increasing congestion, increasing emissions and depleting air quality,
rising health related risks, increase in deaths due to road accidents,
increasing dependency on fossil fuels and an overall depleting quality of life.
The capacity for carrying freight traffic also falls short in view of rising
demand and has resulted in increased logistics costs. In a developing country like India, these
risks are further exacerbated in light of other development challenges such as
rapid population growth, inequality and poverty, high unemployment rate, lack
of basic infrastructure facilities, poor access to services, etc. 14
The transport sector in India today faces an onerous task
of meeting the mobility demands of a population of more than 1.2 billion people
spread over an area of 3.3 million square kilometers (Census 2011).
The transport sector can be divided into four major sub
sectors-
·
Railways
·
Roadways
·
Airways
or civil aviation
·
Waterways
The trajectory in the
transport sector suggests the increasing dominance of the road sector in
meeting the growing mobility demand with a gradual decline in the railway
shares over the years.
Roadways
Road
Transport is one of the most important modes of transport. The history of
Road Transport started from ancient civilizations. Gradually it becomes more and more popular
means of transport.
Roads
are the dominant mode of transportation in India today. It influences the pace,
structure and pattern of development. India is having one of the largest road networks
of over 52.32 lakh km. 15
Road
Transport plays an important role in conveyance of goods and passengers and
linking the centers of production, consumption and distribution. It also plays
a significant role in influencing the pattern of distribution of economic
activity and improving productivity. It is also a key factor for promoting
socio-economic development in terms of social, regional and national
integration. Sustained economic
growth has brought about expansion of the transport sector.
However,
the contribution of road transport sector in GDP has increased from 4.6% in
2003-04 to 4.8 % in 2011-12. The road network of the country consists of
National Highways (NH), State Highways (SH), Other Public Works Departments
(OPWD) Roads, Rural Roads, Urban Roads and Project Roads.
Road Network by categories (in
Kilometers) -1980-1981 to 2012-2013
|
Road Category |
1980-81 |
1990-91 |
2000-01 |
2010-11 |
2012-13 |
|
National Highways |
31,671 |
33,650 |
57,737 |
70,934 |
79,116 |
|
State Highways |
94,359 |
1,27,311 |
1,32,100 |
1,63,898 |
1,69,227 |
|
OPWD Roads |
4,21,895 |
5,09,435 |
7,36,001 |
9,98,895 |
10,66,747 |
|
Rural Roads |
6,28,865 |
12,60,430 |
19,72,016 |
27,49,804 |
31,59,639 |
|
Urban Roads |
123,120 |
1,86,799 |
2,52,001 |
4,11,679 |
4,46,238 |
|
Project Roads |
1,85,511 |
2,09,737 |
2,23,665 |
2,81,628 |
3,10,955 |
|
Total |
14,85,421 |
23,27,362 |
46,90,342 |
46,76,838 |
52,31,922 |
Source: Basic Road Statistics of India 2012-2013
Transport Research Wing Ministry of Road Transport and highways,
Government of India, New Delhi
The
total road length of the country increased significantly from 3.99 lakh kms as
on 31st March, 1980 to 52.32 lakh kms as on 31st March
2013, growing at a Compound Annual Growth Rate (CAGR) of 4.2%. While in 1981,
the network of roads was comprised of NHs, SHs, OPWD roads and rural roads,
urban and project roads were added later on to the network of roads. During the
period 1981 to 2013, rural roads recorded the highest CAGR of 4.5% amongst the
various categories of roads. 16
National Highways in India
NHs
is the arterial roads of the country for movement of passengers and goods. They
traverse the length and width of the country, connecting State capitals, major
ports and rail junctions and link up with border roads and foreign highways.
Ministry of Road Transport & Highways, Government of India, is responsible
for the development and maintenance of NHs in India.
All
NHs are surfaced. As on 31st March 2013, two-lane NHs constituted
the largest share of NHs, i.e. 51.39% of the total length of NHs, followed by
single/intermediate lane NHs (24.43%) and four lanes and above (24.18%).
Compared to 2011-12, there was a marginal decrease both in terms of length and
proportion in two categories of NHs, viz. two-lane and four lanes and above
NHs. 17
Lane wise break-up of National
Highways-2012-2013
|
Number
of Lanes |
As on 31st
March |
|
|
2012 |
2013 |
|
|
Single/Intermediate
Lane |
16,998 |
19,330 |
|
Two
Lane |
40,720 |
40,658 |
|
Four
Lane & Above |
19,100 |
19,128 |
Source: Basic Road Statistics of India 2012-2013
Transport Research Wing Ministry of Road Transport and highways,
Government of India, New Delhi.
Advantages
of Road Transport
Road
Transport has the following advantages-
i.
It is a relatively cheaper mode of transport
as compared to other modes.
ii.
Perishable goods can be transported at a
faster speed by road carriers over a short distance.
iii.
It is a flexible mode of transport as loading
and unloading is possible at any destination.
iv.
It provides door-to-door service.
It helps people to travel
and carry goods from one place to another, in places which are not connected by
other means of transport like hilly areas.
Role of Transport Sector in Indian
Economy
A
well-knit and coordinated system of transport plays an important role in the
sustained economic growth of a country. Transport routes are the basic economic
arteries of the country. Transport system is regarded as the controller of the
national economy and provides a very important link between production and
consumption. The amount of traffic moving in a country is a measure of its
progress.
In
a country like India, the importance of transport is more because of its
vastness as well as varied nature of geographical conditions. In India, it is
also a source of national integration. The present Indian transport system
comprises several modes including rail, road, coastal shipping, air transport,
etc. Transport has recorded a substantial growth over the years both in terms
of length and output of the system.
Transport is
an important part of India's economy. Since the economic
liberalization of the 1990s, infrastructure
development has progressed rapidly; today there are a variety of modes of
transport by land, water and air. However, India's relatively low GDP per
capita has meant that access to transport has not been uniform.
Public
transport remains the primary mode of transport for most of the population, and
India's public transport systems are among the most heavily used in the world. India's
rail network is the 4th longest and the
most heavily used system in the world, transporting
8,224 million passengers and over 969 million tonnes of freight annually, as of 2012.
Motor vehicle
penetration is low by international standards, with only 10.3 million cars on
the nation's roads. In
addition, only around 10% of Indian households own a motorcycle. Despite this, world and is still increasing. The automobile
industry in India is currently rapidly growing with an
annual production of over 4.6 million vehicles, and vehicle volume is expected to rise
greatly in the future.
Despite
ongoing improvements in the sector, several aspects of the transport sector are
still riddled with problems due to outdated infrastructure and lack of
investment in less economically active parts of the country. The demand for
transport infrastructure and services has been rising by around 10% a year with the current infrastructure being unable
to meet these growing demands. According to Goldman Sachs, India will need to spend US$1.7 trillion on infrastructure
projects over the next decade to boost economic growth, of which US$500 billion is budgeted to be spent
during the Eleventh
Five-Year Plan.
Share of Different Modes of Transport in GDP
|
Sector |
2011-12 |
2012-13 |
2013-14 |
|
Transport
of which |
4.7 |
4.9 |
4.8 |
|
Railways |
0.8 |
0.8 |
0.9 |
|
Road
Transport |
3.1 |
3.3 |
3.1 |
|
Water Transport |
0.1 |
0.1 |
0.1 |
|
Air Transport |
0.1 |
0.1 |
0.1 |
Sustained economic growth has brought about expansion of
the transport sector. The share of transport sector in Gross Domestic Product
(GDP) of India has increased from 4.7 % in 2011-12 to 4.9 % in 2012-13 and
reduced to 4.8 in 2013-14. The contribution of road transport sector in GDP has
also increased from 3.1% in 2011-12 to 3.2 % in
2012-13 and then reduced to 3.1% in 2013-14. 18
CONCLUSION
:
Significance
of the study
Demand
for transportation is increasing in India at a very great pace. There has been
unprecedented growth in the number of motor vehicles over the past few years.
Vehicles of all shapes and sizes such as Tata Nano, SUVs, etc. are competing
for road space on our limited road system. In this context, serious thought
ought to be given immediately to the need for having sustainable growth in the
transport sector by taking into account safety, environmental and competition
issues. The regulatory and legal frameworks governing the sector need to be
comprehensive enough with regard to infusing competition in the sector and
efficiently allocate resources so that both prices (to the consumer) and costs
(to the producer) are kept low. However, to keep up with rising demand and with
international best practices, policies need to be identified which facilitates
competition. As a part of its agenda to develop a strategy for competition
advocacy with the government and the private sector, the Committee on National
Competition Policy (C-NCP), constituted by the Ministry of Corporate Affairs,
seeks to have specific inputs and undertake evidence-based advocacy. To carry
out evidence-based advocacy, a review of distortive provisions in policies,
laws, regulations, practices etc. is required. The sector research study on
road transport will provide illustrative examples of those laws, regulations
and policies which either exert or have the potential to exert anticompetitive
effects, and thus influence the outcomes of the law/regulation/policy
concerned. The need to assess competition distortions in the legal framework
and its working become crucial to enable the sector to play its rightful role
in the Indian economy. It is also imperative to bring road sector regulations
in conformity with the competition regime in the country as it results in other
related issues, such as illegal transportation, cartelization, corruption etc.
Multiple laws and agencies governing inter-state movement of freight and
passengers is also one of the major impediments in the desirable growth of this
sector. Thus, the objective of the study is to bring out specific instances of
law induced competition distortions. It will also recommend changes in the
regulations and their implementation procedures to address the competition
related issues. The study aims to highlight performance of Transport Sector in
India during globalization.
REFERENCES
:
1. Ramanathan R., Indian Transport
Towards the New Millennium: Performance, Analysis, and Policy, Concept
Publishing Company, New Delhi, 2004, p 43
2. ibid
p 48
3. ibid
p 48
4. Munnel A.H., Infrastructure investment and economic growth, Journal of economic perspective, December 2014, pp 189-198
5. Ramanathan
R., Indian
Transport Towards the New Millennium: Performance, Analysis, and Policy,
Concept Publishing Company, New Delhi, 2004, p 47
6. ibid
7. Ramanathan R., Indian Transport Towards the New Millennium:
Performance, Analysis, and Policy, Concept Publishing Company, New Delhi, 2004,
p 63
8. Jain J.K., Transport Economics, Chaitanya Publishing House, Allahabad, 2014, p 34
9. Summary of the Annual
Review of Development in Globalisation
and Regional Integration in the Countries of the ESCWA Region
10. Globalization: Introduction to a Special Issue on
Small and Medium-Sized Enterprises
in the Global Economy, Small Business Economics, 9, pp. 1–6
11. Summary of the Annual Review of Development in Globalisation and Regional
Integration in the Countries of the ESCWA Region
12. Joshi, Rakesh Mohan,
International Business, Oxford University Press, New Delhi, 2015
13. Jain J.K., Transport Economics, Chaitanya
Publishing House,
Allahabad, 2014, p 43
14. Jain J.K., Transport Economics, Chaitanya
Publishing House,
Allahabad, 2014, p 45
15. Basic Road
Statistics of India 2012-2013 Transport Research Wing Ministry of Road
Transport and highways, Government of India, New Delhi
16. Road Transport Year Book 2012-2013 Transport Research Wing Ministry of Road
Transport and highways, Government of India, New Delhi, p 23
17. Road Transport Year Book 2012-2013 Transport Research Wing Ministry of Road
Transport and highways, Government of India, New Delhi p 34
18. Central Statistical Organization.
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