Dr. Susmit Kumar, Ph.D.

I find Mr. Nitin Gadkiri’s plan for public transport infrastructure very troublesome because his plan would create massive privatization of transportation all over India. The prime motive of private firm is profit and job creation is the least priority.

 

As discussed in this article. Mr. Gadkari needs to again go back to drawing board to come up with a transportation infrastructure policy for India otherwise there would be massive unemployment in India.

 

As per recent newsreport (India's public transport infra to be developed on London model: Gadkari, The Tribune, January 31, 2019) – “[Mr. Gadkari] … said that World Bank can come out with a total public transport vision for India and added that public sector Wapcos which has inked a joint venture with Austria's Doppelmayr has prepared two project reports for skybuses in India.”

 

Here is the question – at how many places in the world, skybus is being used for mass transportation?? Answer is less than 20. Skybus technology is more than 50 years old. Skybus is a jewelry for India which it does not need. Also China is not using it for mass transportation and hence India should never go for it because China, having similar population, is far ahead of India in infrastructure.

 

Also who is Austria's Doppelmayr??? As per Wikipedia (Doppelmayr Garaventa Group):

 

The Doppelmayr Garaventa Group is an Austrian company that manufactures chairlifts, cable cars, gondolas, surface tows for ski and amusement parks, as well as urban people movers and material handling systems.

 

[….. please read the its entire wikipedia page and you will find that it has very limited expertise in mass transportation…]

 

Doppelmayr Transport Technology: develops and sells material-handling ropeway systems. Initially, these systems were similar to cable cars and chairlifts designed for people, but fitted with specially designed carriers. In the early 2000s, Doppelmayr developed a cable-driven material-handling ropeway called RopeCon®. RopeCon® is a conveyor system that can transport materials over long distances with little ground disturbance. RopeCon® system installations can be found in Papua New Guinea, Jamaica, Sudan, Switzerland, and Austria.

 

India does not need to use Doppelmayr Garaventa Group whose primary expertise is in ski, amusement parks and material-handling ropeway and has very limited expertise in mass transportation.

 

Also World Bank is famous for giving importance to privatization of services - please read the books by Professor Joseph Stiglitz, an American economist, a professor at Columbia University and a recipient of the Nobel Memorial Prize in Economic Sciences (2001). He is a former senior vice president and chief economist of the World Bank and is a former member and chairman of the (US president's) Council of Economic Advisers. He is highly critical of the management of globalization, of laissez-faire economists and of international institutions such as the International Monetary Fund and the World Bank. He described the first hand account of the IMF actions, conducted in collusion by the Wall Street vultures, in the aftermath of the 1997 East Asian Economic Crisis (please read my article: IMF (I'M Finished) - Run by Wall Street "Vultures")

 

Hence India should take the low interest World Bank fund, but should never take the help of World Bank in policy decision.

 

Let us take an example of coal production to see how privatization is a job killer. As per the Niti Aayog’s policy paper, created under Dr. Arvind Panagariya, the Modi administration has decided to open up the coal sector to commercial mining by private entities. In the beginning of 2016, the Coal India Limited employed 333 thousands (333,000) people and produced only 452 million tonnes coal (Coal India, Wikipedia) whereas in the same year, the US coal industry, which is entirely in private hands, employed only 50,000 people and produced 670 million tonnes coal which is nearly 1.5 times the Coal India Limited coal production (Coal mining in the United States, Wikipedia). Hence in near future, we will see layoff of nearly 300,000 (3 lakh) employees in the coal industry. For a private firm, profit is the number one priority and the job creation and safety of employees are the lowest priorities. If we consider the indirect and induced jobs (houses/apartments, schools for children, doctors, grocery stores, etc. associated with 3 lakh families) due to loss of 3 lakh coal employees, India may lose anywhere from 6 lakh to 10 lakh middle class jobs.

 

The rate of rich becoming richer has increased during 1st two years of Mr. Modi government and it is following the footsteps of the US wealth distribution (please see the Charts below). The US economy had golden age during 1946 and 1970s when all the income groups have similar growth rate, but after the massive privatization under Reaganomics, which is termed as “voodoo economics” by its opponents, there has been massive transfer of wealth to ultra-rich from all others (please see the charts below).

 

(A)  between 2010 and 2014 (in 4 years),

       wealth of top 10% increased by 5.2%,   (from 68.8% to 74%) at the rate of 1.3% a year

                   of top 1% increased by 8.7%  - at the rate of 2.175% a year, and

                  of bottom 90% reduced by 5.2% (from 31.2% to 26%)

 

(B)  During 1st two years of the Mr. Modi (2015-16),

      wealth of top 10% increased by 6.7%,   (from 74% to 80.7%) at the rate of 3.35% a year

                  of top 1% increased by 9.4%                                      at the rate of 4.7% a year

                  of bottom 90% reduced by 6.7% (from 26% to 19.3%)

 

Now the question is why would middle class vote for Mr. Modi and BJP?? Yes in 2019, middle class may vote for him but not in 2024 unless Mr. Modi reverses this trend by reining in the massive privatization and also the share market which has become a tool to transfer massive amount of money from middle class to ultra-rich

 

Dump the London Model of Public Transport Infrastructure:

 

The Modi administration choice for London model for India’s public transport infrastructure is a wrong choice. As per Nitin Gadkari, Union minister for  Road Transport & Highways, Shipping and Water Resources, River Development & Ganga Rejuvenation, the London model of transportation system, in which 17 private operators have joined hands to offer services, does not require investment and is a professional one and can offer solutions for frequent traffic jams, pollution and accidents in India (India's public transport infra to be developed on London model: Gadkari, The Tribune, January 31, 2019).

 

The question is – Have they done comparative study of public transport systems world-wide? In majority of metropolis, world-wide, they have government-run transport system and they get substantial subsidies from the government to keep the fares low, especially for buses. In nearly all major cities in the US, the local government runs the public transport and they provide substantial subsidies (for an example read San Francisco Municipal Transportation Agency, Wikipedia). Beijing (China) has public buses - in 2015, the entire network consisted of 876 routes with a fleet of 24,347 buses and trolleybuses carried 3.98 billion passengers annually (Beijing Bus, Wikipedia). RAPT Group is a Government of France owned public transport agency which not only runs significant number of buses in Paris, but also they  operate bus, tram, rapid transit and inter-city rail services in Europe, Asia, Africa and the Americas. RATP Group is currently the world's fifth largest operator in the public transport sector (RATP Group, Wikipedia). RATP operates 63 bus lines within the city of Paris proper, and 214 bus lines in Paris suburbs. In 2014, 983 million journeys were made on RATP bus lines, including 330.7 million journeys on Paris lines and 652.3 million journeys on suburbs lines (Bus (RATP), Wikipedia).

 

For the information of the Union Minister Mr. Gadkari, significant number of 17 private bus operators in London are public-owned overseas operators; three out of the 17 bus operators in London are owned by the French government-owned RATP Group.

 

People need to shed the mentality of running the government as a company for profit. Buses are used mainly by poor and lower income people. England’s lowest income people make 75 per cent of their public transport trips by bus. If we divide the population up into five groups – from the lowest income, to the highest income – then the lowest income group makes three times as many bus trips as the highest income group. By comparison, the highest income group make 20 per cent fewer public transport trips and 75 per cent more private transport trips (Why are Britain’s buses in crisis?, August 24, 2018).

 

The Indian administration needs to stop large-scale privatization otherwise the country is going to witness massive unemployment. Privatization is a job-killer and creates millionaires and billionaires by getting rid of middle class jobs. Large scale privatization in US has resulted in massive loss of middle class jobs. The US economy is surviving mainly because its currency is over-valued; once China replaces the US dollar with its own currency Yuan as the global currency, the US would witness decades of great economic depression which Russia witnessed in 1990s (please read my article: India Needs An “Indian” Economic Policy).

 

Both Capitalism and Communism have serious defects. The then super-power Soviet Union, despite being a military super-power, with significant number of aircraft carriers, submarines, military aircrafts and tanks, second only to the US, suddenly collapsed in 1991 due to a severe CAD (Current Account Deficit) problem (please read my article Communism Collapsed Due to Collapse in Oil Price in Late 1980’s and German Banks – Not Due to Reagan). It is worth noting that even the CIA had no inkling that the Soviet Union would collapse in 1991. Hence India needs to come up with an “Indian Economic Policy” if it wants to survive.

 

Under the London model, the bus fares, all over India, would sky-rocket.

 

The Modi administration needs to make efforts to make public-sector organizations efficient and accountable rather than going for large scale privatization.

 

[Note: The above data is from yearly Credit Suisse Global Wealth Databook from 2010 to 2016. In their 2017 Databook, the numbers are below the 2016 values which show a revision of the method of their calculation and not the trend. Not only in India but world-wide, the rich are becoming richer at the expense of all others.]