Metro dream coming true

It is a matter for satisfaction, the commencement of work on the Chennai Metro Rail. The solution to tackle the humungous increase in commuter traffic lies in massive, rapid rail transportation. Such systems were constructed in London and New York over a hundred years ago. These have evolved in tandem with those sprawling metropolises and form an important part in the lives of those city dwellers. These offer efficient, fast and economical commuting and millions use these round the year. Importantly, these have helped reduce substantially the use of personal transport that contributes to so much of traffic jams and pollution.

Chennai started of well with the elevated mass rapid transit system (MRTS) almost three decades ago. But the lack of involvement of the state government during the first two decades contributed to delays and cost escalation. Just think of taking over 20 years to construct around 27km of elevated track the technology for which is simple and known! If the link of the terminal Velachery with the existing old line of Tambaram-Beach, of less than 5 km, is completed, demand will surge. A commuter from Tambaram can use the rail facility to reach Adayar or Triplicane in quick time.

Sadly, the state administration has not been involved in the quick completion of such projects meant to benefit the citizens of the metro. I remember the resistance of the AIADMK government in the 1980s to contribute even a third of the cost of the first phase of Madras Beach-Mylapore (a stretch of 8.97 km) that took over 10 years for construction.

The era of coalition governments, with regional parties forming an important part of these at Delhi, has helped expand the horizons of the state leaders. There is the willingness to fund these jointly and with liberal access to international funding.
As a consultant to CMDA - TRF, this writer recommended for the Madras 2011 Vision, a focus on surface rail line of a hundred km and underground track of another 100 km. Such a system can provide a mass rail transit facility to different parts of the metro.

Delhi Metro is making this concept a reality in quick time, thanks to the dynamic state administration and the head of DMRC, E Sreedharan.

There is hope of the first phase of such a system in Chennai becoming operational over the next five years. TN's deputy chief minister M K Stalin has the reputation for delivering several flyovers in time and within budgets. This facility is bound to receive great welcome in the background of the congestion in the city roads even at the current rate of infusion of automobiles. Just wait for the Nano and similar models from other manufacturers: even the present narrow road space will be rendered narrower with the demand for parking space by a few lakh more cars and other vehicles.

Maruti will compete fiercely with Tata Motors' Nano

The deluxe version of the Nano with AC, power steering, central locking… is priced, on-the-road, Rs.2.03 lakh. I do expect Maruti Suzuki to offer stiff competition through a small car from its stable with similar facilities at a price of around Rs.2 lakh. For one thing, Maruti Suzuki has established efficient mass production at 2000 cars per day at Gurgaon and another 1000 cars per day at Manesar. Investments on the Gurgaon facility, set up in the early 1980s, have been constantly upgraded and substantially amortized. Thanks to the vision of V Krishnamurthi, productivity levels at Maruti Suzuki have been high right from the start and have been improving continuously. From the initial level of around 25 cars per factory employee, it has increased to over 200 cars per factory worker per year, thanks to better manufacturing practices, resort to automation and systems. Remember about a decade ago, Maruti offered its 800 cc Omni at around Rs.160,000 for running as taxis? I, therefore, believe on the feasibility of Maruti Suzuki offering stiff competition to Tata's Nano. This successful manufacturer, which accounts for the lion's share of the car market, is bound to work to protect its market share.

I also anticipate few other European manufacturers, General Motors and Toyota offering small cars in the 600 cc plus category. Only the comfort expectations of the consumer have been increasing in the form of AC, power steering… But I am confident technology will offer the right solutions at lower prices as has been happening in the IT hardware sector. Also remember how much of power was packed by the Japanese manufactures of motorcycles in the 100 cc mobikes in the 1980s that rendered the 250 cc Java and 350 cc Enfield museum pieces?

Parallel with such reduction in costs, I wish for quantum jumps in innovating hybrid cars and alternative fuels. The Toyota Prius is a great advance made nearly a decade ago. This hybrid car draws power from re-chargeable batteries upto speeds of 80kmph and from the petrol tank only at higher speeds. This makes it ideal for city runs. The lifetime warranty on batteries and its modest pricing ($ 25,000) has made it so popular in the US. The Indian auto industry, in collaboration with academic and other research institutions, should focus on such technologies. This would insulate the industry from vast fluctuations in
demand caused by volatile pricing of petrol.

Negative inflation? My foot!

I am puzzled over reports on inflation turning negative at -1.61 per cent happening after a lapse of 30 years. The slowdown of the economy, the threat of loss of jobs that have induced caution over consumer spending are possible reasons.

But looking at the level of price increases that have crept-in in recent months, I am sceptical over the fall in prices.

I provide samples of familiar middle class experiences:

• Agriculture commodities have been registering steep and continuous increases: the price of fine varieties of rice has more than doubled - from around Rs. 17 a kg to around Rs. 40 per kg in less than two years. The price of widely used toor dal, likewise, has more than doubled to around Rs. 70 a kg; that of gingelly oil has also more than doubled to Rs. 160 per kg. Sugar at around Rs.30/kg and gur (jaggery) at Rs. 40 are at record levels.

• The price of vegetables that used to rule between Rs.5 and Rs. 10 per kg, have registered a more than three' fold increase. In consequence, the price of food in medium-sized hotels has more than doubled. Unlike Bengaluru and Hyderabad, Chennai has traditionally been higher priced: a meal costs Rs.40 to Rs.50 in modest vegetarian restaurants.

• Film addicted Tamils also shell out much higher prices for tickets in cinema theatres.

There are more bizarre increases in the costs of other social needs. A modest-sized marriage hall, which charged Rs.25,000 per day in 2006, today demands Rs.85,000! The reasoning includes the element of service tax, which has compelled marriage hall owners to conduct their transactions in white. The familiar syndrome, of each cost element contributing to loading extra margins, is seen in full glare. The practice is also seen in banqueting charges of hotels: what cost around Rs. 400 per head even in a star hotel a couple of years ago, has today shot up to over Rs. 1000 per head!

Modern hospitals are a law unto themselves. Several hospitals in the city used to collect payments in cash, much of this in black. The advent of corporate hospitals has helped in a more healthy accounting practice by corporate hospitals. Medical insurance, though a help in expanding business, has also resulted in sizable increases in the cost of healthcare. There are a couple of other unsavoury practices: even large corporate hospitals do not recognise the diagnostic results of other specialist hospitals and insist on the patient going through tests again all over. There are also no set pro-cedures and treat- ments that are uniform among different hospitals. Cardiologist Dr. S Thanikachalam points to these differing violently from practices in developed countries.

The cover story in this issue deals in detail with the steep increase in the cost of higher education. Of course school education at the primary and secondary levels is even costlier compared to collegiate education for arts and science courses!
The new UPA government and finance minister Pranab Mukherjee should look into such steep, creeping inflation with the attention it deserved.