Simon Harding, 18/11/11

On Friday, Supreme Court judges K. S Radhakrishnan and C. K Prasad gave the go-ahead for 0.45 lakh new auto rickshaw permits to be issued in Delhi.

The move has the potential to drastically improve the city’s auto-rickshaw service for passengers and drivers alike, but many unanswered questions about distribution, implementation and numbers remain.

There are currently around 55000 auto-rickshaws in the capital. The number of autos has not grown since the Supreme Court stopped the issuing of new auto permits in 1997 due to concern about the pollution emitted from the old dirty two-stroke petrol engines (now replaced with CNG).

The number has not remained frozen. Evidence suggests that it has actually fallen since 1997 because around 20000 autos were lost during the CNG switchover as many drivers had their permits cancelled as they were too slow to convert their autos to the new fuel or simply could not afford the conversion. The fall in numbers contrasts with the growing demand for autos from Delhi’s population, which grew 21.6% from 2001-2011.

With no new permits available, aspiring owner-drivers must currently buy a permit from a financier on the black market for anything up to Rs.6.5 lakhs. In the absence of bank credit, most have to take high interest loans from the financier. Faced with huge monthly repayments these drivers then overcharge in order to repay the financier, buy CNG, handle the police and feed their families.

Renter drivers are in a similar predicament. They overcharge due to high rents which are pushed up by the limited number of autos available for rent and the large number of willing drivers. Increases in the meter rate simply result in higher rents and higher permit costs on the black market.

The permit cap has created a sector in which financiers and contractors make big money at the expense of drivers and, ultimately, the public who are overcharged as a consequence.

Issuing new permits has the potential to change all this. The black market permit price dropped from Rs.6.5 lakhs to Rs.2.5 lakhs upon the Supreme Court’s announcement. A drop that worried the financiers. If a large number of permits are freely available from the Transport Department, then the aspiring owner-driver will simply have to pay around Rs.1.4 lakh for a new Bajaj auto (less for a second hand model) and a few hundred in administration fees for a new permit. Freed from huge monthly repayments, the need to overcharge passengers will lessen, although access to credit is a persistent problem for drivers.

With more autos on the roads, the number available for rent will rise, bringing down the daily rental cost and with it the pressure on renter-drivers to overcharge.

However, there are questions: Who will get the permits? How will they be introduced? What documentation will the Transport Department demand? Why 0.45 lakh?

In 2002, 5000 new permits were issued by the Transport Department on the orders of the Supreme Court. The idea was to grant them to poor drivers on a one-man one-permit basis. SC, OBC and open reservations were made. These permits were non-sellable. However, several years later, the Transport Department’s own records revealed that several wealthy individuals owned up to six of these new permits meant for the poor. Poor slum dwellers obtained the permits and handed them over to financiers for a small fee. The change of ownership was then happily registered by the Transport Department. Will this sort of thing be allowed to happen again?

The Transport Department is considering introducing the new permits in tranches. Their motivations for this are unclear. Is it to give the city’s CNG infrastructure time to expand to cope with thousands of new autos? Indeed, many new CNG stations must be built. Or is it so that the new permits can more easily be channelled to wealthy financiers and contractors as happened in 2002?

The Transport Department requires that drivers submit a long and exhausting list of documents in order to get the permissions necessary to ply an auto. Many drivers are migrants who do not have their old school certificates, a Delhi driving licence and a Delhi proof of address. This means the process is long, difficult, bribe-ridden and often arbitrary, changing upon the whims of officials. Very little is in writing and virtually nothing is publicly available. Will the Transport Department demand an unreasonable number of documents in order to deny new permits to poor migrant drivers? Will they demand bribes?

Finally, how have the judges come to the figure of 0.45 lakh? Why not just allow permits to be issued freely to whoever wants one? That would totally eliminate any black market for permits and ensure that whoever wants to ply an auto can do so without unreasonable expense. This way public demand could determine how many auto Delhi needs, rather than two Supreme Court judges.

Judges Radhakrishnan and Prasad have made a sound decision, which has the potential to improve life in Delhi for millions of people. They recognise that the auto is an important part of Delhi’s public transport infrastructure – a welcome admission given the CM’s comments last year.

In a city which is adding 1000 private cars per day and very little new road space, small, comparatively green vehicles like the auto are crucial. Poor regulation and vested interests have for too long held back the auto’s contribution. However, the thrust of the ruling – better transport for the public and an improved livelihood for auto drivers – must not be de-railed by vested interests and their allies in the Transport Department.

This article first appeared on 20/11/11 on Kafila.