Saturday, March 23, 2019

Why Have a Bullet Train When We Have So Much Poverty In India

The common refrain from most critics of Modi these days is to ding the Bullet Train being constructed between Mumbai and Ahmedabad by saying – When India is so poor, and the Indian Railway system is so bad, why go for the Bullet Train.  Implying indirectly – that India and Indians are not worthy of a train system that is fast, convenient and world class, BECAUSE (1) we are poor and (2) we have a British legacy train system that is huge, unmanageable and inefficient.

Rich Economies do not create Infrastructure, Great Infrastructure creates Rich economies #Bullet Train Click To Tweet

Poverty and Bullet Train

One needs to remember that as a result of this Bullet Train project 20,000 construction workers will find jobs for the next 5 years.  After that 4,000 permanent jobs will be created for operating the system!

The Mumbai-Ahmedabad high speed rail project that was launched in Ahmedabad on Thursday by prime minster Narendra Modi and Japanese prime minister Shinzo Abe, has the potential of creating 20,000 direct and indirect employment opportunities, according to a report by State Bank of India’s research team.  After the commissioning of the project, direct employment of 4,000 employees will be created for the operation and maintenance. Further the project is likely to generate about 16,000  indirect employment opportunities

This charge of Poverty Vs High Tech has been the rant of every decade when India tried to do something.  Let us go in the past and look at the record of these Poverty Rudaalis.

1960s and ISRO:  The Indian Space Research Organization was launched.  On Aug 15, 1969 to be exact.  The same rant was repeated then.  “When a country is poor, why spend crores on satellites which will benefit no poor person”.  Remember that launch of 104 satellites in one shot this year?  Forget the pride aspect of the whole feat.  Do you know how much money India – the country – made from this launch?  A cool USD 300 million!  In 2015, India had launched 45 satellites until July 2015 – and made $100 mn from them!  Earning millions of dollars of revenue from the launches is a regular occurrence for the Indian space agency now.  Who benefits from increasing Indian GDP?  If the Government if honest – and does not fill its own pockets – the moneys logically should and do go to the public goods creation!


1980s and the Maruti Suzuki: India had a car revolution with the coming of Maruti Suzuki.  Yes, the roads were bad.  Yes, the infrastructure was terrible.  The poverty was damning.  But with the coming of Maruti Suzuki, a revolution in cars started!  TN Ninan shared his frustration during that time of one of the stories with the same socialist sentiment.

Even in the mid-1980s, India was in a funny socialist mindset. If you did an upbeat story on the rise of India’s middle class, most pundits simply rejected the good news, as though it was nothing more than boosterism. But there was an overwhelming response to a detailed report on government waste – except that nothing has changed in the 15 years since. Another memorable cover story was on the mess that was India’s telephone system.

One of the editors had a brainwave for the cover visual: a battered phone instrument (it was banged on the floor till it broke!) bandaged clumsily and knotted up with wires. Today, we finally have a decent phone system, though it’s still not world class.

Today, thanks to the world-class Auto OEM industry that came up due to the ecosystem created by Maruti Suzuki, India’s automotive industry contributes $93 billion – 7.1% of the national GDP!

For every vehicle produced, direct and indirect employment opportunities are created with employment of 13 persons for each truck, 6 persons for each car and 4 for each three- wheeler and one person for two-wheelers.  The $ 93 billion automotive industry contributes 7.1% to India’s GDP and almost 49% to the nation’s manufacturing GDP (FY 2015-16).

The employment created for each vehicle produced in India is huge!

Why Have a #BulletTrain When We Have So Much Poverty In India @narendramodi Click To Tweet

2000s and the Delhi Metro: The introduction of Delhi Metro.  For someone who grew up in Delhi, I could have never believed that as congested as Delhi was, the city could ever have a sophisticated train system such as the Metro.  And given how people were – with bad civil behavior – one was always skeptical of how long such a system could remain even relatively clean.  But boy, was I wrong!  In all my travels, I have not seen anyone eat or drink on the train.  And the stations are always clean.  This is despite that the stations do NOT have a garbage can!   The investment in the Metro system has been huge.  And its critics equally high!  But ask the local Delhi-ite on the impact of Metro in his / her life and they will explain it eloquently.  Here is however, a detailed discussion of how Metro has helped the city and its environment – basically how the liveability aspect has improved – its circa 2007 study though!  Imagine the benefits now that the train network has expanded.

Conducted by the Central Road Research Institute (CRRI), the study reveals that the Metro railway has helped save 33,000 tonnes of fuel and prevented creation of over 2,275 tonnes of poisonous gases. Also, it has helped commuters in the city save 66 minutes every day on an average and reduced the daily vehicle demand.

The report adds: “The Delhi Metro’s Phase-I environmental and social benefits will help recover the full cost of this phase by 2013. The completion of Phase-I of the Delhi Metro Project covering 65 km has resulted in reduction in road accidents, improvement in road traffic conditions as also the environment.”

“If the social and economic benefits are quantified then the Delhi Metro Rail Corporation has helped the city of Delhi in saving Rs. 1,167 crore already, which will increase to Rs. 2,072 crore by the end of 2007.”

So, we can keep crying hoarse about how technical advancements will hurt the country’s fight against poverty – but think about it – what is the best way to fight poverty?  Improve Economic Returns.  Increase the GDP.  And, make its increase and impact equitable.  The large companies and the rich will find a way to buy a house or an office in Mumbai anyways.  What about the small-time guy living in Anand, who wants to do business with clients in Mumbai?  Either he has to fly or go via train spending hours.  If he could get access to that market sitting at home, isn’t that a distribution of earning opportunities?

If the country had to create a network of transportation which will bring about distribution of opportunities, then there was no better city to use as the base other than Mumbai!  And the more cities its connected to on a daily basis, the better it is for the economy.  Right?!

Now let us look at how and if the use of High Speed Railways has impacted the economies of the countries it has been brought to.

Impact of High Speed R