India can save Rs 1.8 trillion annually from reduced fuel costs: study

New Delhi: India can save a whopping Rs 1.8 trillion annually from reduced fuel costs, travel time savings as well as health benefits from reduced air pollution levels and increased physical activity if cycles replace use of two and four wheelers for short distance trips, a new study has concluded. This figure accounts for 1.6 per cent of India’s GDP for 2015-16.

The study ‘Economic Benefits of Cycling in India: An Economic, Environmental and Social Assessment has been conducted by TERI (The Energy & Resource Institute) backed by All India Cycle Manufacturers’ Association. The study for the first time tries to find empirical evidence of the economic benefits that can accrue if Indians start using bicycles for short distance trips instead of motorized vehicles.

The study estimates that 50 per cent substitution of two wheeler and four-wheeler trips by bicycle under the average distance of 8 km will lead to a personal fuel savings of Rs 27 billion. Also, 50 per cent substitution of two wheeler and four-wheeler trips under the average distance of 5 km will result in annual health benefits equivalent to Rs 1435 billion on account of increased physical activity. Similarly, 50 per cent substitution of two-wheeler and four-wheeler trips under the average distance of 8 km can result in savings worth Rs 241 billion due to reduced air pollution.

For marginal unskilled workers who walk to work every day, a 50 per cent substitution of walking trips above the average distance of 3.5 km can result in travel time savings worth Rs 112 billion. Also, substituting half of short-distance motorized trips by cycling can save India more than 0.35 million tonnes in fuel annually while resulting in CO2 emission reduction of around 1 million tonnes.

“Rs 1.8 trillion in direct benefit savings is a huge figure -- greater than India’s entire public expenditure on healthcare. This is the first time in India that an elaborate study has tried to derive empirical evidence of the economic benefits of increasing usage of cycling. Despite its many benefits, India is witnessing a very slow growth in bicycle ownership. Specifically in cities short-distance trips which can be undertaken by bicycles are now being made by cars and two-wheelers instead. We need dedicated measures to promote widespread use of bicycles including micro-financing options, reducing GST rates on cycles to 5 per cent from the current 12 per cent as well as construction of adequate and safe cycling infrastructure,” says Mr. Pankaj M Munjal, president of All India Cycle Manufacturers' Association and Chairman & MD of Hero Cycles.

Bicycles in India are increasingly being used by only captive users, who do not have access to any other form of mobility. In the period between 2001 and 2011, the share of bicycle-owning households has only increased by 1 per cent in India. The corresponding share in rural areas has increased by 3.4 per cent, whereas in urban areas it has declined by 4.1 per cent. Rising income levels, absence of safe cycling infrastructure, and increased affordability of motorized vehicles (especially two-wheelers) are major factors that have led to a decline in the share of bicycles.

“Cycling provides inherent, incredible, and indefinite benefits in the form of zero dependence on energy sources, zero pollution, and improved health. Additionally, bicycles can provide critical support to urban and rural poor for seeking livelihood, education, and so on. While all this is common knowledge, our study has tried to quantify these benefits. Apart from better and safe cycling infrastructure, we also need to dispel the notion that bicycle is a poor man’s mode of transport. Measures to reduce the use of private vehicles such as congestion and parking pricing and awareness campaigns will also help turn people away from motorized transport,” Source TERI report.

It is observed that more than 50 per cent of the people in India use non-motorized forms of transport, such as walking and cycling, to travel to work followed by two-wheelers (18 per cent) and buses (16 per cent). In urban and rural India, on-foot trips account for the highest share of work trips with the share being 12 per cent higher in rural areas. In rural areas, for meeting the daily travel requirements, workers are most dependent on cycling after walking. However, in urban areas, after walking workers are most dependent on two-wheelers. Increasing motorization in urban areas has given rise to many negative externalities such as dependence on fossil fuels, GHG emissions, congestion, pollution and the associated health impacts.

In many developed countries such studies have been conducted for judicious appraisal and informed decision-making and have even resulted in the creation of national cycling plans/strategies/laws and separate funds. This study in the Indian context is a step forward in that direction.