The Transport Bottleneck

By A. D. Shroff

Summary

In this Forum of Free Enterprise booklet, reprinted from The Times of India of 24th and 25th September 1956, A. D. Shroff warns that India’s transport bottleneck is a tragic and under-appreciated threat to the Second Five-Year Plan. Drawing on figures from the early 1950s — wagon indents of more than 150,000 against daily loadings under 22,000, traffic sometimes waiting up to three months for wagons — he argues that unless the prevailing shortages are remedied and capacity expanded faster than industrial and agricultural output, the whole Plan, particularly its private sector, may be wrecked for lack of transport.

Shroff works through the Planning Commission’s own assessment that railway capacity must rise sharply to be self-sufficient, that even the proposed Rs. 1,125-1,480 crore railway provision (nearly a quarter of the entire public-sector outlay) cannot close the gap, and that coastal shipping and inland water transport can offer only limited relief. His central remedy is motor transport: the one form capable of converting India’s transport deficit into a surplus. He recounts how road transport was deliberately suppressed from 1939 onward — the Indian Motor Vehicles Act confined operators to small regions, blocked inter-State services, made permits hard to obtain, and heaped taxes on motor vehicles, fuel and accessories until their tax incidence was nearly twice the freight burden carried by rail.

He calls for the Government to remove these handicaps: cut the tax incidence (he argues that halving the tax while trebling the number of vehicles would still yield 50 per cent more revenue), permit vehicles to carry optimum loads and use trailers, dispose of permit applications promptly, free the issue of permits, and withdraw restrictions on inter-State operation. Above all, he urges removal of the lingering threat of nationalisation — postponed but not abandoned — so that private enterprise will invest in trucks. Quoting Finance Minister T. T. Krishnamachari’s invitation to be told where the Government is going wrong, Shroff concludes that bodies like the Indian Road Transport Development Association and the Forum of Free Enterprise must educate public opinion with the facts so that the necessary policy changes are made before the transport problem solves itself by wrecking the Plan.

Key points

• Reprinted from The Times of India (24-25 September 1956); warns the transport bottleneck threatens the Second Five-Year Plan.

• Cites wagon indents over 150,000 against daily loadings under 22,000, with waits up to three months for wagons.

• Argues railway capacity cannot keep pace even with a Rs. 1,125-1,480 crore provision (nearly 25% of public-sector outlay).

• Holds coastal shipping, inland water transport and bullock carts can give only limited relief.

• Identifies motor transport as the one mode able to turn the transport deficit into a surplus.

• Recounts deliberate suppression of road transport since 1939 via the Motor Vehicles Act, permit limits and heavy taxes.

• Proposes cutting taxes, allowing optimum loads and trailers, freeing permits, and removing inter-State restrictions.

• Urges removal of the threat of nationalisation so private enterprise will invest in trucks.

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