Public value as the new transport currency

The Union Budget 2021 sought to remedy the struggling Indian economy by increasing government spending. One such instrument is a Development Finance Institute (DFI). DFIs are not a new concept for India. Many commercial banks like IFCI, ICICI, IDBI and IDFC started as DFIs, with the vision of providing long-term finance to industries. However, the financial reforms of 1991 made DFIs raise financial resources at market-related rates, making their model untenable. Government-backed DFIs have made a comeback, promising new physical and social infrastructure. When it comes to infrastructure, DFIs fill a critical gap left by commercial banks.

Infrastructure Investments require significant capital and long gestation periods, which commercial banks can’t provide since commercial banks borrow short from depositors with a maximum tenure of ten years. Besides, DFIs don’t operate with the sole motive of profiting and have a public policy mandate to finance the socially desirable project. DFIs are fit for financing projects of public value, with long gestation periods.

One might wonder how public value is measured. In 1995, Mark Moore from Harvard Kennedy School identified these dimensions of public value: public satisfaction, economic activity generated, social capital generated, public participation involved, contribution to sustainability, choice, fairness, efficiency, revenue, expenditure, trust and legitimacy protecting citizen's right. It might be difficult for an infrastructure project to check all these boxes.

Social equity should be the government's currency in ensuring that public value is created. Social equity means that each person should have access to the number of opportunities that they specifically need. For example, to look over a fence that is 6 ft high, a 4 ft tall person might need a taller stepping stool than a 5 ft tall person. Similarly, all road users have different needs; some need more support than others.

In the transport sector, the government's best bet is to invest in diversity while keeping sustainability in the centre. Such solutions engender economic activity for all society sections, protecting their rights as citizens and offering them more choice. Little needs to be said about their contribution to a greener future. Creating complete streets, catalysing the cycling revolution, and promoting public transport are ways of achieving these goals.

Vehicular mode-share in India is not particularly bothersome. Sixty percent of India’s mobility needs are still served by public transport and non-motorised transport. However, it is pertinent to ask—of this 60 percent, what percentage comprises choice users and what percentage comprises captive users. Choice users are the people who can afford a private vehicle but still choose to take public transport; captive users are the people who take public transportation because they can't afford to buy a private vehicle.

American cities seem to be in a somewhat toxic love affair with cars. Indians, on the other hand, only have a crush on cars; our match is a humble two-wheeler. We still dream about owning cars and think of it as a better “emergency vehicle”. If roads were to be likened to a jungle, buses would be elephants; cars would be tigers, cyclists and pedestrians would be deer.

Individually, it’s natural to want to be on the top of the pyramid; but as policymakers, it’s unscrupulous to let the might be right; to offer deer as prey to the tigers! According to World Health Organization (WHO), more than half of road traffic deaths are among the vulnerable road users, such as pedestrians, cyclists, and motorcyclists. Complete Streets is the notion that places the same emphasis on pedestrians, cyclists, and public transport users.

Carrying forth the analogy, deer like to travel in herds for safety; similarly, getting more people on the streets is the first step to ensure that they are safe. Creating an active streetscape with a mix of interactive users like a commercial, retail, and foodservice helps achieve this. Pedestrian-scale lighting provides a safer environment both from a traffic safety perspective and crime angle. Planting shrubs, trees, and grasses also make the streets more walkable. Adding rain gardens and bioswales to the mix helps storm-water drainage, saving most Indian cities from their annual problem – water logging! People also tend to stay longer on the streets if street furniture is present. Finally, ensuring accessible design for persons with disabilities and legible signage for pedestrians and motorists goes a long way in reclaiming the motorists' streets.

In the past few years, services by on-demand mobility platforms like Uber and Ola have fueled the shift from owning the vehicle to owning the ride. This is good news! However, with the rise in the coronavirus pandemic, people are shying away from ride-sharing and vehicle-sharing services, especially those who can afford an alternative mode of transport. This is bad news, but it can be worked around! The time is ripe for building cycling infrastructure to encourage cycling as people’s go-to vehicle for solo mobility. With offices going to 2021 in work-from-home mode, the primary purpose (which used to be work or education before) has changed.

Many companies are considering work-from-home as their permanent way of working. Besides, a survey conducted by WRI India in 2020 found that 85 percent of its respondents had switched to accessing certain services like bill payment and shopping online. This shift impacts commuters' trip length since basic services can be accessed from nearby places, if not online, paving the way for a cycling revolution. The government needs to invest in cycling infrastructures, such as cycle tracks and cycle lanes, to leverage the cycle-conducive environment.

Finally, the government should look at investing in public transport. With the existing mode share, it is clear that a vast majority of the Indian population still depends on public transport for commuting. Interventions like fleet augmentation go a long way in ensuring that bus ridership reaches beyond the captive users by making sure that buses become reliable and less crowded.

Providing alternative financing, in the absence of adequate farebox revenue, such as directing on-street parking fees, other cross-subsidisation and land value capture, might also go a long way in financially supporting public transport. These interventions ensure that economic activity is generated for all sections of society. With a mandate to create public value, DFIs should most certainly look at financing infrastructure projects beyond just roads. It should finance projects that benefit everyone, ensuring social equality, but it should especially finance projects that benefit the most vulnerable, delivering social equity.