DEMA2EcoTransport&Comm040213

SHIVAJI UNIVERSITY, KOLHAPUR

CENTRE FOR DISTANCE EDUCATION

Economics of Transport

and Communication(Group C-1 - Optional Paper-XXIV)

For

M. A. Part-II

H I

K J

Copyright © Registrar,

Shivaji University,

Kolhapur. (Maharashtra)

First Edition 2013

Prescribed for M. A. Part-II

All rights reserved. No part of this work may be reproduced in any form by mimeography

or any other means without permission in writing from the Shivaji University, Kolhapur

(MS)

Copies : 200

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Registrar,

Shivaji University,

Kolhapur-416 004.

Printed by :

Superintendent,

Shivaji University Press,

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ISBN-978-81-8486-471-7

H Further information about the Centre for Distance Education & Shivaji University may be

obtained from the University Office at Vidyanagar, Kolhapur-416 004, India.

H This material has been produced with the developmental grant from DEC-IGNOU, New

Delhi.

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n B. O. S. MEMBERS OF ECONOMICS n

Chairman- Dr. Dinkar Rangnath KhatakeShivraj College of Arts, Commerce & D. S. Kadam Science College, Gadhinglaj, Dist. Kolhapur.

l Dr. A. A. DangeProfessor & Head, Department of Economics,

Shivaji University, Kolhapur.

l Dr. Lalasaheb Narayan GhatageChh. Shivaji College, Satara

l Dr. M. N. GosaviNight College of Arts & Commerce,

Bindu Chowk, Kolhapur.

l Dr. Anand Dhanavant LodadeShahaji Raje Mahavidyalaya, Khatav,

Dist. Satara

l Dr. Arjun Subarao PatilS. B. Khade Mahavidyalaya, Koparde,

Tal. Karveer, Dist.-Kolhapur.(iii)

l Dr. Jagnnath Shamrao PatilArts & Commerce College, Kadepur,

Tal. Khanapur, Dist. Sangli.

l Dr. R. G. KorabuD. D. Shinde Sarkar College, Kolhapur.

l Dr. V. V. MahamuniAssociate Professor and Head, Dept. of

Economics, Veer Wajekar A. S. C. College,

Phunde (Uran), Navi Mumbai.

l Dr. P. S. KambleDept. of Economics, Shivaji University,

Kolhapur.

Centre for Distance Education

Shivaji University, Kolhapur

n ADVISORY COMMITTEE n

Prof. (Dr.) K. S. Rangappa

Hon. Vice-Chancellor, Karnataka State Open

University, Mansagangotri, Mysore

Prof. V. Venkaih

Director, Academic Dr. B. R. Ambedkar

Open University Rd. No. 46, Jubilee Hill,

Hyderabad-33 Andhrapradesh

Dr. J. S. Patil

Dean, Faculty of Social Sciences,

Shivaji University, Kolhapur

Dr. R. G. Phadatare

Dean, Faculty of Commerce,

Shivaji University, Kolhapur

Prof. (Dr.) D. V. Muley

Registrar,

Shivaji University, Kolhapur

Shri. B. S. Patil,

Finance and Accounts Officer,

Shivaji University, Kolhapur

Prof. (Dr.) Jayaprakash A. Shinde

(Member Secretary)

Director, Centre for Distance Education,

Shivaji University, Kolhapur.

Prof. (Dr.) N. J. Pawar

Vice-Chancellor,

Shivaji University, Kolhapur

Prof. (Dr.) R. Krishna Kumar

Hon. Vice-Chancellor, Yashwantrao Chavan

Maharashtra Open University, Dnyangangotri,

Near Gangapur Dam, Nasik

Dr. A. P. Gavali

Dean, Faculty of Arts,

Shivaji University, Kolhapur

Dr. C. J. Khilare

Dean, Faculty of Science,

Shivaji University, Kolhapur

Prof. (Dr.) A. B. Rajge

Director, B.C.U.D.,

Shivaji University, Kolhapur

Dr. B. M. Hirdekar

Controller of Examination

Shivaji University, Kolhapur

Prof. (Dr.) A. N. Joshi

Vaishnavi Appartments, Flat No. 8, Shrirang

nagar, Near Pumping Station,

Near Gangapur Dam, Nasik

Centre for Distance Education

Shivaji University,

Kolhapur.

Economics of Transport and Communication

Writing Team

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n Editors n

Unit No.Authors

Prof. V. T. Jadhav 1

S. G. M. College, Karad

Dr. Anilkumar Krishnrao Wavare 2, 4

Chh. Shivaji College, Satara

Dr. L. N. Ghatage 3

Chh. Shivaji College, Satara

Dr. Anna Kaka Patil 5

S. G. M. College, Karad

Dr. P. S. Kamble 6

Department of Economics, Shivaji University, Kolhapur.

Dr. Vijay Maruti Kumbhar 7, 8

Dhananjayrao Gadgil College of Commerce, Satara

Dr. Anilkumar Krishnrao Wavare

Assistant Professor,

Department of Economics (UG & PG),

Chhatrapati Shivaji College, Satara

Dr. P. S. Kamble

Associate Professor,

Department of Economics,

Shivaji University, Kolhapur.

Preface

It is with Pride and Pleasure that we place before the readers the first edition of

our book 'Economics of Transport and Communication'. Shivaji University has

introduced the Distance Education mode for its external students. This book of

Economics of Transport and Communication (Group-C1-Optional Paper-XXIV) is

written for M. A. Part-II students. The writers tried to simplify the various concepts of

Transport and Communication. In order to simplify the contents of the book, the

schedules, diagrams, charts and keywords are given wherever necessary for better

understanding.

This book is divided into eight units. These units include the Significance of

Transport and Communication,Ralway Transport, Road Transport, Water Transport,

Air Transport, Transport and Environmental Pollution, Communication and Economic

Development and Business Communication. This book will help the students to

understand the basic issues in Transport and Communication.

This book is a collective endeavour of a dedicated team of teachers, well supported

by technical as well as administrative staff at the Distance Education Centre, Shivaji

University, Kolhapur. We are sure you will find this book useful. We thank all those

directly or indirectly involved in giving the book its final shape.

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n Editors n

Dr. Anilkumar Krishnrao Wavare

Assistant Professor

Department of Economics (UG & PG)

Chhatrapati Shivaji College,

Satara.

Dr. P. S. Kamble

Associate Professor,

Department of Economics,

Shivaji University, Kolhapur.

INDEX

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Unit No. Topic Page No.

1 Significance of Transport and Communication 1

2 Railway Transport 42

3 Road Transport 84

4 Water Transport 114

5 Air Transport 143

6 Transport and Environmental Pollution 177

7 Communication and Economic Development 190

8 Business Communication 236

M. A. Part-I Economics

Group - C1 - Optional Paper-XXIV

Economics of Transport and Communication

Each Unit begins with the section Objectives -

Objectives are directive and indicative of :

1. What has been presented in the Unit and

2. What is expected from you

3. What you are expected to know pertaining to the specific Unit

once you have completed working on the Unit.

The self check exercises with possible answers will help you to

understand the Unit in the right perspective. Go through the possible

answer only after you write your answers. These exercises are not

to be submitted to us for evaluation. They have been provided to

you as Study Tools to help keep you in the right track as you study

the Unit.

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1

Unit- 1

Significance of Transport and communication

Index:

1.0 Objectives

1.1 Introduction

1.2 Subject Description

1.2.1 Significance of Transport and communication

1.2.2 Classification of Transport and communication

1.2.3 Integration of Transport and communication means

1.2.4 Government policy since 1991.

1.3 Summary

1.4 Glossary

1.5 Self-Learning Question

1.6 Answer to the Self Learning Question

1.7 Questions for self study

1.8 Field work

1.9 References

1.0 Objectives:

After completing the study of this unit, you will be able to –

� Learn about the meaning and significance of transport and communication.

� Know about the classification of transport and communication.

� Learn about the integration of transport and communication means.

� Explain the Government policy in relation to transport and communication since

1991.

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1.1 Introduction:

Infrastructure is classified as economic infrastructure and social infrastructure.

Economic infrastructure is also known as physical infrastructure. It includes energy,

transport, communication, irrigation etc. social infrastructure is comprised of such

social services as education, health, sanitation, water supply etc. Adequate quantity,

quality and reliability of infrastructure are essential for rapid economic growth. It is

because the state of infrastructure in the economy has a direct co-relation to it’s

internal production, international competiveness, flow of direct foreign investment

and export dynamism. The World Bank study shows that a one percent increase in

the stock of infrastructure is associated with a one percent increase in the G.D.P.

across all countries. It is therefore, in this context necessary to study the

significance, classification and integration of transport and communication. Besides,

it is equally important to know about the transport and communication policy

adopted by the Government of India since 1991.

1.2 Subject Description :

1.2.1 Significance of Transport and Communication:

Transport : Meaning and Significance.

Meaning of Transport:

The term transport is derived from the Latin word ‘transportare’. Trans means

‘across’ or ‘the other side’ and portare means to ‘carry’. Thus, transportation means

to carry something from one place to another. In other words, transportation means

the conveyance of goods and persons from one place to another. Marshall A, in his

work ‘Industry and Trade (1919)’, clearly pointed out the importance of transport in

the development of human civilization. The following quote is highly relevant in this

context; “The transport industries which undertake nothing more than the mere

movement of persons and things from one place to another, have constituted one of

the most important activities of men in every stage of advanced civilization.”

Transport service, by increasing the place and time utility of various commodities,

contributes to wealth and welfare of the society.

Significance of Transport :

Transportation is a mirror that reflects the progress of a nation. It is a link

between industry, trade and agriculture. The modern civilization, which rests on the

large scale factory production, would collapse in absence of transportation. In the

words of W. F. Ogburn, (The Social Effects of Aviation: 1949), “the transport – the

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defacto barometer of economic, social and commercial progress-has transformed

the entire world into one organized unit. It carries ideas and inventions to the people

and has considerably contributed to the evolution of civilization.” We now learn

about the significance of transport in different walks of human life-economic,

political, social and cultural.

Economic Significance:

1. Transport and production: Large scale production requires huge quantity

of raw materials, large number of workers, huge capital investment wider markers

etc. It also requires the immediate distribution of finished goods over national and

international markets. The efficient transportation ensure regular supply of impulse

to the producer as well as the distribution of finished goods over the wider markets.

2. Transportation and consumption: The consumers nowadays use goods

produced in different parts of the world. Different countries have different

geographical advantages in the production of different goods. As a result of this, the

quality of their products is better and cost is lower. Modern transportation has made

their markets world wide. This results into the increased demand for and supply of

various goods and services.

3. Transport and Exchange: Transport widens the area and scope of

exchange of goods and services. It breaks the monopolies of areas and saves the

people from exploitation. It carries surplus goods to the scarcity areas and thereby

ensures fair prices to the producers and sellers. Besides, it stabilizes prices and

brings uniformity in prices at different areas.

4. Transport and Distribution: Transport influences rewards of the factors

of production, i.e., land, labor, capital, organization and enterprise. It increased the

rental values of land by assuring future hopes and aspirations of the people of that

area for development. It increases the mobility of labour and capital and there by

helps them to have better rewards. It also helps the organizers in arranging various

factors of production at cheaper rates from distant places. Besides, it helps the

entrepreneurs in finding new business opportunities where profit is higher.

5. Transport and Geographical specialization: The geographical

specialization implies surplus production of a specialized commodity a particular

area. The surplus of a specialized commodity needs to be transported to other areas

and goods of self requirement to be brought from outside areas. The cheap and

efficient transport system can only assure such a regular exchange of goods.

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6. Transport and utility: Transportation increases the form, place and time

utilities of the commodities. It helps in the process of transformation of raw materials

into the finished goods. Similarly, it carries goods from places where they are in

abundance to places where they are scarce. Thus, transport increases place utility.

Besides, transport also increases time utilities of the commodities. eg, quick and

prompt supply of perishable goods.

7. Transport and land utilization: Transport opens new hopes and

aspirations of the people of that area for development. It opens new avenues of

economic activity, ensures effective use of local resources and enhances the

productivity of land. It also endures effective use of inaccessible places such as

forests, hills, deserts, valleys etc.

8. Transport and agriculture: Transport helps to increase the production

and productivity of agriculture by providing facilities for improved seeds, manure,

fertilizers, marketing, storing etc. Indian agriculture is at present backward. It is, no

doubt, attributed to the factor like the wretched condition of roads, we of the bullock

carts etc.

9. Transport and Industries: Transport help in the development of industries

in the following ways.

1. It plays a dominant role in location of a factory.

2. It plays an important role in regional development and decentralization of

economic activities.

3. It influences the cost structure of a product.

10. Transport and employment: Transport provides employment on a large

scale. The industries involved in the manufacture of ships, locomotives, wagons,

automobiles and other vehicles and their parts and accessories employ labour and

capital on a vast scale. Besides, the services provided by rail, road, water and

airways provide employment to many people.

11. Transport and planned Economy: In a planned economy, the state

deliberately regulates production, distribution and consumption of goods.

Transportation plays a vital role in this context. The location of industries, regional

balance, better distribution of products, and better maintenance by administration,

justice and deface –all necessitate a well developed transport in a planned

economy.

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12. Transport as public utility: Public utility services include transport,

electricity, water supply, post and telegraph etc. These services are of great public

significance as they cater the collective demand. An efficient transport system

serves the society in number of ways. Therefore, the Government invariably either

nationalizes transport services or puts considerable restrictions over their working

through various legislations. The rates and fares are kept deliberately low as to

recover only cost of service. At times, in public interest, the Government provides

the transport services even when they incur losses.

Political Significance:

1. Transport and National unity: Transport strengthens national unity by

promoting homogeneity among people. People ‘hang together’ better when they live

and speak alike. Besides, transport creates a need for political unity by making the

different parts of country economically interdependent. It pares the way for unity

amidst diversity.

2. Transport and National Defense: Transport strengthens national

defense. Construction of border roads is of utmost importance for national defense.

Transportation by rail, highways and air had revolutionized military procedure. For

instance, the aeroplane has greater mobility, range and speed. It is very effective in

moving troops and supplies as well as in combat. In short, transport is the agency

through which the entire resources of a country can by mobilized and directed

towards military purposes.

3. Transport and Internal Law and Order: Transport helps in maintaining

internal law, order administration and justice. The timely police and military aid,

service of fire brigade, ambulance etc. all require a well developed transport system

in country.

4. Transport and International Political Relations: Transport has unified

the whole world by breaking the time and distance barriers. It makes possible the

regular exchange of people, goods and views on the international level. Thus, it

helps to strengthen political friendship amongst various countries of the world.

5. Transport and Political Division of states: Transport is one of the most

important factors deterring the size of political stilts of a country. The size of the

states state should be determined in such a way as to ensure efficient administration

internal and external security and facilities for economic development. This

obviously depends on the stage and pattern of transport facilities available in the

state.

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Social and Cultural Significance:

1. Transport and sectionalism: The complete eradication of sectionalism is

not desirable sectionalism cannot be justified when it leads to misunderstanding,

self-motivated interests or short-sightedness. Transport, however, broadens the

outlook and fosters the feelings of inter-adjustment thereby helps in reducing the

sectional frictions.

2. Transport and Advancement of Knowledge and Culture: Transport

plays a vital role in the spread of knowledge and culture. Learners go to distant

college and universities. Researchers visit national and foreign universities and

research institutions. The books, newspapers, magazines etc. reach every nook and

corner of the world. Cultural heritage fashions, traditions, fine arts such as music,

dance, paintings, etc. pass on from one country to another. This is all possible due

to modern means of transport.

3. Transport and standard of living: Transport improves the standard of

living of the people by making available them the goods manufactured in different

countries of the world. It helps to reduce the urban and rural differentiations and

there by enriches the lives of both city dwellers and villagers. Besides, it also

contributes to public health by providing quick medical aid even in distant places.

4. Transport and Eradication of Conservatism: Transport is instrumental in

reducing the conservative beliefs of the people. For instance, space travel and

landing of man on the moon provided a server blow to conservative belief of the

people. For instance, space travel and landing of man on the moon provided a

server blow to conservative belief of mankind about the moon and other planets.

Beside, transport provide a scope for assembly of the people of different castes,

creed, race, religion, region, etc. and there by promotes equality and brotherhood.

5. Transport and Dispersion of population: Transportation solves the

problems of rural and urban people. It can speedily arrange adequate materials for

city people. It enables people to live in nearby villages and work in cities. It also

helps in providing the rural people with modern facilities and opportunities to visit

cities. Besides, it helps in the development of industries in the backward areas and

thereby restricts the unwanted migration of the people from the countryside to the

cities.

6. Transport and Tourism: Modern transport has considerably increased

national and international tourism. World tour, which is at present a reality, was very

difficult in olden days.

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Communication: Meaning and Significance:

Definition and Meaning of Communication:

The English Word ‘Communication’ is derived from the Latin term ‘Communis’,

which means “to make Common, to transmit or to impart.” Hence, literally,

communication refers to sharing a common idea or establishing a common

understanding with someone.

The concept of communication would be more clear if we examine some of the

definitions of communication presented by great authorities as under.

1. “Communication is the process by which information is transmitted between

individuals and for organizations so that an understanding response results”.

(Peter Little in his book “Oral Written Communication”).

2. “Communication is a continuing and thinking process dealing with the

transmission and interchange with understanding of ideas, facts and courses of

action”. (George R. Terry in “Principles of Management”.)

3. “Administrative communication is a process which involves the transmission

and accurate replication of ideas ensured by feedback for the purpose of

eliciting actions which will accomplish organizational goals”. (William Scott in

“organization Theory.”)

4. “Communication is the perception, interpretation and response of people to

signals produced by other people”. (Glances and Brilhart.)

These definitions show that communication is an exchange of information,

ideas and emotions with the help of words, Letters, symbols or messages which

brings about common understanding and response.

Essential Features of Communication:

All forms of communication have common features as follows

1. Purpose: Every communication has a purposes or goal or objective

2. Cooperation: There must be cooperation between the two particles viz.,

communicator (sender) and Communicate (Recover.)

3. Means: The message is to be conveyed by the Communicator to the

communicate through proper words, Letters, symbols etc.

4. Proper understanding: The message is to be property understood by the

communicate.

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5. Feed back: If the communicates understands the message he gives proper

responds to the communicator.

6. Continuity: Communication is a systematic and continuous process of telling,

listening, understanding and reacting.

Elements of Communication:

Following are the elements involved in the process of communication.

1. Source/Sender/Communicator: The pardon who initiates the action of

communicating is known as communicator.

2. Audience/Receiver/ Communicate: The person for whom the communication

is intended is called as communicate.

3. Goal/purpose: It is the sender’s reason for communicating, the desired result

of the communication.

4. Context/Environment: It is the background in which the communication takes

place.

5. Message/Content: It is the information conveyed such as instruction, ideas,

information, orders etc.

6. Medium/Channel: Channels are the modes which enable the transfer of

message. E.g. mail service, telecommunication system etc. They serve as a

link between communicator and communicatee.

7. Feedback: Feedback is the return message or response from the

communicatee to the communicator after receiving the message.

Significance of Communication:

Communication is an integral part of human life. It is as old as man himself. The

printing of the first Bible, with movable types, by Gutenberg in 1437 in his shop in

Mainz, marks the beginning of the Communication Revolution. The communication

Revolution is comparable in its socio economic effects with the industrial Revolution.

Technological advances such as radio and television sets have made it possible for

millions to hear and see the same message at the same time. The wireless makes it

possible to transmit a message over hundreds of miles. The laying of submarine

cables enables people to converse across ocean with the help of their telephones.

Now, with the help of satellites and computers, we have instant communication in

the form of internet and e-mail. The Communication Revolution has led to an

Information Explosion. Man at the beginning of civilization was confronted with the

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problem of how to get information. Now a days, he is being faced with the problem

of how to select necessary information.

Communication is the modernization paradigm which sought to transform

traditional societies into modern western societies through the transmission of

attitudes, practices and technology. It increases the potential for economic growth.

In this context, Telecommunication Authority of India aptly prints and that, “If country

has 1 percent more mobile subscribers than another, its GDP per capita will be

about $200 higher.” Let us study the significance of communication in different walks

of human life-economic, political, social and cultural.

Economic Significance:

Communication plays a crucial role in the economic development of a nation. It

is because there is a direct link between nation’s material prosperity and that of her

information wealth. Bhavanai et al. in their work “The Role of mobile phones in

Sustainable Rural Poverty Reduction”(2008) Observed that, “in a typical developing

country, an increase of 10 mobile phones per 100 people boosts GDP growth by 6

percent.” The well developed communication system is essential for meeting the

Million Development Goals. The economic significance of communication from

various angles is given below.

1. Communication and Production: Communication promoted the

production in following ways.

� helps to understand the needs and requirements of both employee and

customers.

� promotes cordial relations and work culture among the employees for

increasing production.

� helps to create healthy and happy environment within and outside the

organisation.

� Effective internal communication helps business enterprises in billing, colleting,

selling, delivering, stock-keeping etc.

� knowledge of such external factors as related to industry, customers,

stakeholders, government, banks, insurance companies, world environment

etc. helps to make operational decisions.

� makes available update information of the different industries, success stories

of the business enterprises, labour laws, etc.

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� helps the manager to make the right type of decision at the right time by making

available information regarding the availability of factors of production, and their

prices, demand for and prices of the etc.

� helps the manager of MNCs to make prompt decision.

2. Communication and Consumption: Communication encourages the

consumption of the people in the following ways.

� the consumers are informed about the new products through advertisements.

� the Consumers are provided with goods and services at reasonable prices.

� E-Commerce or E-Business promotes buying and selling..

3. Communication and Exchange: The level of output in the economy

exchange of goods communication plays vital role in the promotion of exchange.

� helps to wide the area and exchange of goods and service .

� helps the producers and sellers to carry, surplus goods to scarcity areas.

� Stabilizes prices and brings uniformity of rates in different areas in the country.

4. Communication and Distribution: Communication influences the pattern

and reward of distribution of factors of production. Mode of communication make

available the information regarding the rates of factor rewards in different industries

and regions. As a result of this, labour and capital find wider markets due to

increase in their mobility. The international flow of labour and capital is also due to

this facility. Organisers arrange for various factors of production at cheaper rate.

5. Communication and Division of Labur: Modern modes of

communication promotes the division of labour. The geographical specialisation

implies surplus production of specilaised commodity in a particular area. But there is

a shortage of that commodity in other areas. Communication by making available

information facilities the transport of the specialized commodity to other areas and

goods of self requirement from outside areas to that area.

6. Communication and Agriculture: Inadequate rural infrastructure

adversely affects farm and non-farm activity. In this context, a special mention must

be made of communication. The availability of accurate and timely information

regarding prices of farm and non-farm produce, cropping pattern, husbandry and

livestock, off-farm and non-farm employment, minimum wages, rights of workers is a

must. Modes of mass communication plays a vital role in this context. The

information regarding weather forecasting, the use of HYV seeds, manures and

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fertilizers, pesticides, cropping-pattern etc. is transmitted through radio and

television. Besides, the farmers are provided with the information regarding better

ways of irrigation, soil management, prices of agricultural produce in different

markets etc.

7. Communication and Digital Divide: The digital divide is referred to the

disparities in the availability of telephones, especially between states and indeed

between the rural and urban areas within a state. This result into rural-urban divide,

social as well as economic. For instance, teledensity in India. Teledensity means the

availability of phone - both fixed as well as wireless, per 100 population. Teledensity

in India rose from 26 percent in 2008 to 66 percent in December 2010. However,

there prevailed inequality in access to telephony across the states. Teledensity was

below 10 percent in 2010 for Chhattisgarh and Jharkhand. On the other hand, for

states like Delhi and Himachal Pradesh and metropolitan cities like Kolkata, Mumbai

and Chennai, it was over 100 percent in 2010 indicating that individuals have more

than one telephone connection. Similarly, compared to urban area, rural areas, lag

behind in telephone connection. Even though, teledensity in rural areas has been

increasing overtime, the rural –urban gap is widening. Kerala and Himachal Pradesh

had the highest rural-urban gaps due to very high telednsity in Urban areas. Rural

areas in Orissa, Madhya Pradesh, Jammu and Kashmir, Uttar Pradesh, Bihar,

Chhattisgarh, Jharkhand and Assam had a teledensity of less than to 10 percent in

2008. Thus, the telecom revolution has remained largely as an urban phenomenon

in a number of poorer states. The positive relationship between net state domestic

products and the teledensity calls for bridging the digital divide.

8. Communication and Industry: Communication is a Life-line of industry.

Large scale use of information and telecommunications technologies directly

influences productivity, cost effectiveness and competitiveness in industries with

high levels of product differentiation and low levels of unit prices. In these industries,

prompt availability of information about demand trends or price movements can

boost competitive advantages. For example, advanced telecommunications services

in Taiwan and the Phillppines have made their textile, garment, toy and consumer

electronics industries internationally competitive by allowing tight links between

commercial distribution in America and European markets and local production.

Similarly, the extraordinary efficiency of financial markets of Hong kong and

Singapore is based on the extensive use of such advanced telecommunications

services.

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9. Communication and Employment: Communication has opened a large

number of employment opportunities. In a developing country like India, the service

sector is gaining in it’s importance. Communication creates job opportunities directly

and indirectly. Post, telegraph, telephone, television etc. are providing job

opportunities directly and indirectly. Post, telegraph, telephone, television etc. are

providing job opportunities to the people directly. Today, India has found its niche in

the IT world and regarded as the premier destination for the global sourcing of IT

and IT- Enabled Services (ITES). The It enabled services like Medical

Transcriptions, call centers, Data processing, Back-Office Operations, GIS,

Revenue Accounting etc. are providing jobs to millions and millions.

10. Communication and Export Trade: India’s success in the export of IT

Software and Related services over the past decade remains unparalleled. Total

export revenues earned by this sector rose from US $ 7.7 billion in 2001.02 to US $

31.3 billion in 2006-07. This sector is expected to achieve its target of US $ 86.6

billion in export report revenues by FY 2011-12.

11. Communication and Service Sector: An advanced telecommunication

system is very important for service industries like banking, trading, retailing,

transportation, maintenance and Insurance. It is because information and real-time

communication are vital to the production process in these industries. A reduction in

the cost of these services indirectly enhances international competitiveness within

the entire economic system. For instance, the extraordinary efficiency of financial

markets of Hongkong and Sinapore is attributed to the extensive use of advanced

telecommunications services.

12. Communication and Economic Planning: Communication tools advice

people about new ideas and methods. People are acquainted with new knowledge

and skills. It is the people’s participation that makes economic planning, successful.

Developmental programmes realise full potential only when the knowledge and

technology are shared effectively by the people. Communication helps the planners

in identifying and formulating development programmes.

Political Significance:

Communication support the democratic development and stimulates economic

growth in the following ways:

� Stimulates people’s awareness.

� helps the administration in arriving quick decision and implementation.

M.A. II- Economics- Economics Transport and Communication

13

� helps the government to maintain internal law and order.

� strengthens national defence.

� helps in good governance and governance reforms.

� gives voice to the poor and marginalised groups

� facilitates inclusive political system.

� promotes the national integrity

� helps to develop international political economic and social relations.

Social and Cultural Significance:

Communication plays a significance role in social and cultural life of the people

in the following ways.

� transforms the traditional societies into modern western societies through the

transmission of attitudes, practices and technology.

� creates social capital resulting from social networking, which strengthness

economic opportunities.

� empowers the community towards collective decision making and action

through enhanced knowledge and skills to identify, priorities and resolve

problems and needs.

� entertains the people and thereby relieves them from stress.

� helps the people to improve their standard of living.

� makes available the gains of development to the rural masses.

1.2.2 Classification of Transport and communication:

Classification of Transport:

Transport can be classified on the basis of surface or track used, vehicles or

motive power used. Taking into consideration the basis of surface, transport can be

classified as (1) Land Transport, (2) Water Transport, (3) Air Transport.

14

Chart 1.1.

Chart 1.1. shows the classification of transport.

Classification of Transport

1. Land Transport 2. Water Transport 3. Air Transport

1.1.1

Means :

Man

Animal

Animal Crafts

Motor Cars

Buses

Trucks

Scooters

Rickshaws

1.1.2

Ways:

Pathways

Unsurface roads

Surface Roads

1.1.3

Motive Power

Man

Animal

Steam

Petrol

Diesel

1.2.1

Means

Railway Trains

(Passenger Goods)

1.2.2

Ways:Steel Line

1.2.3

Motive Power:

Steam, Diesel

Electricity

1.1 Road

Transport

1.2 Rail

Transport

2.1.1

Means: Canoes

: Boats

Steamers

2.1.2

Ways: River

Canals

Lakes

2.1.3

Motive Power:

Orars

Steam

Diesel

Petrol

2.2.1

Means:

Boats

steamers

ships

2.2.2

Ways:

Ocean Bay

2.2.3

Motive: Steam Power

Petrol

Diesel

3.1

Means:

Aeroplanes

3.2

Ways:

Sky

3.3

Motive Power:

Petrol

2.1 Inland water Transport

2.2 Ocean Water Transport

15

1. Land Transport:

Land transport is divided into road transport and rail transport.

1.1. Road Transport:

The road transport is the most primitive mode of transport. It existed in the past

when man used to carry goods on his own head back or arms in the absence of any

alternative means of transport. At present, road is the principal means of transport in

the backward regions as well as in the highly advanced regions. Road is described

as a fundamental institutions of mankind. The progress in science and technology

has immensely contributed towards the improvement in the system of roads and

road vehicles. Roads occupy a pivotal place in the overall development of a nation.

They are in real sense, the veins and arteries of a nation.

There are three elements of road transport viz.,(1) Ways of Roads: (2) Means

or Vehicles. And (3) Motive Power

Roads:

There are different types of roads. They are classified on the following bases:

1. Suitability to the Weather:

� Fair Weather Roads: Fair weather roads are serviceable during good weather.

They are unserviceable during rainy or winter season’s account of heavy rain or

snowfall.

� All Weather Roads: All weather roads are serviceable throughout the year.

They are not affected by the weather conditions.

2. Method of Construction:

� Metalled Roads: Metalled roads are generally made of cement, coal-tar,

bitumen or asphalt. They have ragid and strong surface. Their construction cost

is high. However, their maintenance cost is low. Therefore, they are suitable for

heavy vehicular traffic.

� Non Metalled Roads: Non-mettaled roads are generally made of kankru, broken

stones etc. and covered with earth. Their construction cost is relatively low but the

maintenance cost is higher.

� Earthen Roads: Earthen roads are made of earth only. They are unsurfaced or

‘Kutcha’. They are generally narrow in width and exist in the countryside. They are

mostly used by pedestrians, animals and animal carts. They are unfit for heavy

16

vehicular traffic. Their construction cost is very low but their maintenance cost is

high.

3. Suitability to Mechanical Transport:

� Motorable Roads: Motorable roads are mettaled or kankar-bajri roads. They are

suitable for power-driven and heavy vehicular traffic. Their construction cost is

high but maintenance cost is low.

� Non-Motorable Roads: Non-motorable roads made of earth. They are not fit for

motor-driven vehicles.

4. Regions:

On the basis of region, the roads are classified as rural roads and urban roads.

Roads can be divided on the basis of region e.g. Nagpur plan in India. As per the

Nagpur Plan, 1943 Indian roads are classified as national highways, state highways,

district roads and village roads.

� National Highways: National highways connect ports, foreign highways, capitals

of large states, large towns and industrial areas.

� State Highways: State highways connect the important centres of trade,

Industry and commerce within a state. They are also connected with the

national highways.

� District Roads: The major district roads connect the areas of production and

markets with one another or with the highways or the railway stations. The

minor district roads connect the towns and places of production and markets

within the district.

� Village Roads: Village roads connect villages and groups of villages with the

district roads.

5. Competition:

� Parallel Roads: Parallel roads run parallel to the railway line and compete with

the railways.

� Feeder Roads: Feeder roads are supplementary or complementary to the

railways.

17

1.1.1 Means Or Vehicles of Road Transport

Following are the means, which are used in road transport

1. Human Porters: Human porter is the most ancient means of transport.

Man himself was the only means of transport in the olden days. However, the use of

human portage is declining with the development of various means of road

transport.

2. Animal and Animal Driven Vehicles: Animal like dogs, horses, oxen,

camels, yaks, elephant, donkeys, and reindeers are used for road transport. Their

importance has been declined in the modern mechanized age. However, at present,

they are of almost importance at hills, in deserts, forests, in rural areas and

countryside.

Animal driven include wheeled chariots, buggies, ekka and tanga, camel carts

and the bullock carts.

Flexibility, economy, handy and convenient are the advantages of the animal

transport. However the animal transport suffers from such disadvantages as slow

speed, incapable of long journey, long weight carrying capacity, susceptibility to

disease, high maintenance cost and sanitational problems.

3. Cycle Vehicles: Cycle vehicles include bicycles and cycle rickshaws.

These vehicles use pneumatic tyres and are moved by human energy.

Bicycle: The first bicycle in the world was introduced in 1867. Since then, its use

has increased significantly in almost all the countries and more particularly in

underdeveloped countries. India is no exceptions to this. Bicycle is the most popular

means of individual transport on account of its low capital cost and nominal

maintenance cost. It does not require any operating expenses. It is convenient and

handy. It can be parked anywhere. It is most suitable for carrying small loads and

for short distances. It is mainly a means for passage transport. However, it has

come to be used by milkmen, hawkers etc. it suffers from limited carrying capacity

and slow speed.

Cycle Rickshaw: Cycle rikshaw has three wheels and pneumatic tyres. It is used to

carry two passangers for short distances. It is mostly used in cities. It has ousted

tongas and ekkas in cities. It is handy and convenient and used to provide door to

door service. Recently, four wheeled rickshaws are being used. However, it suffers

from, such disadvantages as low speed, low carrying capacity and heavy strain to

rickshaw pullers.

18

4. Motor Driven Vehicles: The development in science and technology,

more particularly after the Industrial Revolution, contributed to the manufacturing of

modern mechnised vehicles. Motor driven vehicles include motor cars, buses,

tracks, auto-rickshaws, scooters etc. These vehicles are fitted with a motor. These

are moved by such motive power as petrol or diesel. These vehicles have the

advantage of being, fast, convenient, and rider coverage of distance

1.1.2 Motive Power

Following are the motive power that are the used in the field of road transport.

� Human Power

� Animal Power

� Stearn Power

� Petrol Power

� Diesel Power

� Electricity Power

1.2. Rail Transport:

Rail Transport is considered as the life line of a nation. It occupies the most

premier place among all the means of transport. It started in Europe after the

Industrial Revolution. It, nowadays, constitutes the most important system of

transport in almost all the countries of the world. It is most suited to carry bulky and

heavy goods like raw material, food grains, minerals etc. High speed and huge

carrying capacity are the advantages of rail transport

Rail Transport is capable to meet the requirements of the countries like India,

China, U.S.S.R Canada and U.S.A having extensive plains and long distance, large

population and bulky traffic to carry. It requires huge initial investment. However, the

cost of service per unit of traffic declines with every increase in the volume of traffic.

The Law of increasing returns becomes operative with every increase in the volume

of rail traffic. The electrification and dieselisation of rail transport has made it more

speedy, comfortable, convenient, economical and hence attractive. Rail transport is

either nationliased or regulated by the government.

Rail Transport is classified as Narrow Guage Railway, Meter Guage Railways

and Broad Guage Railway. As compared to the narrow guage railway and meter

guage railway, the broad guage railways requires huge investment. However, it has

19

the advantage of high speed. It is worth to note that rail transport is not fit for rural

areas and for providing door to door service.

2. Water Transport:

Water Transport is the Primitive mode of transport. Water ways have been used

for navigation since the dawn of civilisation. All the ancient civilization were

developed alongside the waterways. The river and lakes were used for inland water

transport. The sea was used for coastal and overseas transport. Waterways

contributed to a great extent to the development of world trade and industry.

The early civilization developed alongside the waterways such as rivers, lakes

and sea. In the course of time, man discovered that he can float over the water and

it would prove cheap and convenient for carrying goods and persons. In the initial

stages, small rafts and canoes were floated. Over the years, there took place the

development in water vehicle engineering. Now a days, we see giant ships and

steamers floating over the sea and going to every nook and corner of the world.

Besides the natural ways, some artificial ways like canalo were also constructed for

inland and overseas navigation. Suez, Panama and Stalin Canals connect two seas

and thereby enable big ships and steamers to pass through them.

It is worth to note that the considerable improvements have taken place in

construction, design, motive, power, speed, safety etc. of the water vehicles. The

natural watersways have been considerably improved through human efforts. For

example, rivers have been deepened, grass, stones etc. are cleared for making

them better serviceable . Seaways have been maped, routs have been fixed and

harbors properly developed and equipped. However, the significance of inland water

transport has considerably deteriorated with the development of railways and motor

transport.

Water transport has many advantage as compared to other means of transport.

Cheaper means, huge carrying capacity, only means of transport at places like hilly

slopes, forests and snow covered areas, national defense, discoveries of new

islands, development of foreign trade and home trade and development of

international relations are the prominent advantages of water transport. However,

water transport has its own limitations. Among them, mention must be made of lilted

area of operation, Zig-Zag and circuitous routs, slow speed, blockade, storms and

hurricanes, seasonal character and international rules.

On the basis of routes, water transport can be divided into inland water

transport and ocean transport.

20

2.1 Inland Water Transport:

Ocean Inland water transport includes river, canal and lake transport. The rivers

and lakes are gift of nature. However, canals are man made. Hence, they involve

high cost of construction and maintenance. The primitive societies used rafts,

canoes and boats for inland water transport. But now big boats and steamers float in

the inland water ways. Inland water transport is used for carrying goods and persons

within the national boundaries.

2.2 Ocean Transport:

Ocean transport is divided into coastal and overseas transport. In both the

cases, the way for transport is ocean. In coastal ocean transport, goods and

passengers are carried from one port to another part of the same country. In the

overseas transport, goods and passengers are moved from one country to another

country. Big steamers and ships are used in ocean transport. Ocean is a gift of

nature. Hence, there is no need to incur expenses on construction and maintenance

of the ocean routes. About 75 percent of world trade takes place through shipping.

Nowadays, shipping is a powerful means of combat and defense of the country.

3. Air Transport

Air transport is the modern means of transport. It is also the fastest means of

transport. In 1763, the Montgolfier brothers in France commenced their experiments

attracted world wide attention and encouraged others for the same. Fears of

experiments with scale models, glider, helicopters, proceed the first flight of an aero

plane in 1903 by the Wright brothers - Orville and Wilbur. World War I and World

war II contributed greatly to the development of air-crafts. In the beginning, the

aircrafts were developed to caller the military requirements. Afterwards aircrafts

suited to inter-continental and commercial flights were developed. Nowadays,

different types of air crafts are available for military, scientific, sports, commercial

and industrial services. The air transport has made a rapid progress due to

advanced science and technology and has made its own place in the system of

transport.

Air transport occupies an important place in the system of transport today. It is

main attributed to its high speed, accessibility and unbroken journey. It has united

the world by overcoming all obstacles of Nature. It’s commercial, political and social

significance can hardly be over-emphasised. However, It, being very costly, can not

become a popular means of transport for the masses.

21

Elements of Air Transport:

Following are the elements of air transport -

The Airway:

The sky is used as the way for flying aircrafts. It is a permanent Way. It requires

no expenditure either on construction or maintenance. Air routes connect air traffic

centres or airports well equipped with immediate landing fields at suitable intervals

and communication facilities etc. Aircrafts depend on the earth for landing, taking off

of guidance, safety etc.

Airport: An airport is the Locality, either of water or land, which is adopted for

landing and taking off of aircraft. It also provides facilities for shelter, supply and

repair of aircrafts.

Classification of Airports:

The airports can be classified as terminal airports, and intermediate landing

ports.

Terminal Airport:

The terminal airports consists of the terminal facilities and filling station for

aircrafts. The terminal airports may be sub-divided on the basis of ownership and

administration as :

(a) Commercial and Private Airports: These includes the airports owned and

operated as business or private ventures by individuals, companies, clubs or

associations.

(b) Municipal Corporation: These airports include those which are built and

operated by cities or town governmental units.

(c) State Ports: State Ports include the airports that are built and administered by

the government

Intermediate Landing Ports:

These airports are the areas provided for safe landing and take off along the air

routes placed there to promote the safety of air Commerce.

The airport can also be classified as per their size, facilities or nature of flights,

In U.S.A the airports have been classified according to size and facilities as class I

and Class VI. In India the airports may be classified as national and international

airports.

22

The essentials of a good airport include a good size, adequate port facilities

and the management. The vehicle used in air transport is known as aircraft or

aeroplane Aircrafts are mainly divided into two types. Lighter than air crafts and

heavier than aircrafts. The aircrafts are driven by motor using highly inflammable

petrol.

Classification of Communication:

Communication is an exchange of information, ideas and emotions with the

help of words, letters, symbol or message that brings about common understanding

and response. Communication is a dynamic process. It is always changing, it grows

and develops. The communicator chooses a sutitable channel or medium by which

to send the message. The choice of the channel or medium also influences the

shape of the message. There are different methods and types of communication.

Table 1.2 shows the classification Communication

Table 1.2 Classification of Communication

Classification of Communication

1. Methods of

Communication:

Verbal

Communication

Non-Verbal

Communication

Oral Communication

Written Communication

2.Types/Channels of

Communication

3. Media and Modes

of Communication

External

Communication

Internal

Communication

Outward Communication

Inward Communication

Formal

Channels

Vertical Communication

Horizontal Communication

Informal Channels

Conventional Modes

Electronic Modes

Media of Mass

Communication

23

1. Methods of Communication:

A. Verbal Communication: Communication by the use of words, whether

written or spoken, is called verbal Communication. According to Bartol and Martine,

“Verbal Communication is the written or oral use of words to communicate.” Verbal

Communication includes speaking, writing, listening and reading. The research has

revedled that business people spend 30 percent, 45 percent, 9 percent and 16

percent of the total time of verbal communication on speaking, listing, writing and

reading respectively. Speaking and writing are used to send the message to the

audience.Listening and reading are used to receive the message.

Verbal Communication is divided into Oral Communication and Written

communication.

1. Oral Communication: Oral Communication refers to communication

through speech. The conversations, meeting, conference, interviews, training

sessions, speeches, announcements, radio speeches, telephone talk, public

speaking, are all forms of oral communication. Oral communication can be used

effectively to inform, satisfy, praise, criticise, please, inquire and a variety of other

purposes. Oral communication skill helps us to build and develop human

relationships. It is an integral part of one day to day life

Advantages of oral Communication:

Oral Communication has following advantages.

� saves time and money.

� more effective tool of persuation and control.

� immediate feedback.

� coneveys the message more effectively.

� speaker can modify his message.

� suitable to communicate with groups at meeting, conferences etc.

� helps to promote friendly relations with friends, colleagues, customers,

suppliers etc.

� possible to communicate confidential and secret information.

24

Disadvantages of oral Communication:

Oral Communication has following disadvantages.

� Consumers more time and money, for instance, meeting, arranged at far off

place.

� Inconvenient for Lengthy and complex messages.

� No Legal validity unless they are taped and recorded in proper form.

� Can be misunderstood or misinterpreted

� Not easy to fix responsibility for mistakes

� Can not be referred for future.

� Difficult to retain message for a long time.

� Effectively depends upon the ability of a speaker to communicate.

2. Written Communication: Written Communication is a type verbal

communication. Writing is the expression of human language by means of visible

signs. The transmitter of an idea encodes it in the form of written message and

sends it to the audience through proper channel. Written Communication includes

Letter, circulars, memos, telegrams, reports, fax, books, e-mail etc. Everything that

is transmitted in written form is known as the Written Communication.

Advantages of written Communication:

Written Communication has the following advantages.

� Accurate and precise and hence can’t be misunderstood.

� Creates permanent record and hence useful for future reference.

� Acceptance as Legal evidence.

� Helps to Communicate Large and Scattered audience.

� Promotes the goodwill of the organisation

� Help to assign responsibilities.

� Can be rescrutinised.

M.A. II- Economics- Economics Transport and Communication

25

Disadvantages of written Communication:

Written Communication has the following disadvantages.

� Slow and time consuming.

� Formal and tends to be rigid.

� Can reach only the literate.

� No immediate feedback.

� Creates huge paperwork and files.

B. Non- Verbal Communication: Communication without the use of words or

language is called non-verbal communication. In non verbal communication,

symbols other than words such as pictures, sounds, colours, body movements,

facial expressions etc. are used to convey the message to the audience. Bartol and

Martin define non-verbal communication as “communication by means of elements

and behaviours that are not coded into words.” Non-verbal communication is the

most basis form of communication. Anthropologists have revealed that long before

human being used words to talk things over, our ancestors communicated with one

another by using their bodies. Bartol and Martin point out that non-verbal aspects of

communication account for 65 to 93 percent of what is communicated.

The importance of non-verbal Communication is for two reasons. One, non-

verbal cuers are more reliable than the verbal. Second, It is more efficient mode of

transfer of ideas from both the sender and the receivers standpoint.

The important function of non-verbal Communication are as follows.

� To provide information either consciously or unconsciously.

� To regulate the flow of information.

� To express emotions through facial expression.

� To complements contradict or expand the verbal message.

� To influence the other through appearance, gestures etc.

� To facilitate specify take e.g. to coach a person how to play judo or karate.

Kinds of Non-Verbal Communication:

Experts have classified the different forms of non verbal Communication into

the following groups.

26

1. Body Language : Body Language implies the changes that occur in the

body position and movements that show what the person is felling or thinking. The

body sends a continuous flow of hints. All our bodily movements, gestures, postures

etc. are guided by our thought process and emotions, we send out signals that

speak louder than words by nodding our head, blinking our eyes etc. Body

Language makes human communication interesting.

Importance of Body Language

� Body conveys the truth.

� Understanding of body language makes us success full in practical life.

� Oral face to face communication supplemented with appropriate body language

becomes more effective.

Components of Body Language :

� Body shape and appearance: People tend to expect the connection between

physique and behavior. For example, tall persons are likely to be considered

more credible than short persons. Different types of Dress e.g. The police

dress, the military dress, khadidress etc. convey message to the people.

Besides, the hair style, jewellery, cosmetics etc. that we use convey signals to

others.

Nonverbal Communication

Body Language Para Language Time and Space

Language

Sign Language

Body Shape and

Appearance

Posture

Gesture Touching

Facial Expression

Eye contact

Pitch Variation

Speaking speed

Pause

Volume variation

Colours

Pictures

Graphics

Posters

Signs and Signals

Maps

Voice Proper Word

Stress Visual

Audio or

Sound

Signals

27

���� Posture: Posture is the way we hold our body and head, the way we stand or

sit. For example, holding the head high is sign of self respect, confidence,

integrity etc. A head bent low in certain situation shows modest.

���� Gestures: Gestures are physical move mats of our arms, legs, hands, torsos

and head. Gestures are used to show emoticons. They convey definite

messages or information. For example, foot shaking and finger tapping signify

nervousness.

���� Touching : Touching is a meaningful mode of communication. For example, a

firm handshake indicates decisiveness, a damp handshake indicates and

anxiety.

���� Facial Expression: Facial expressions show emotions. They reflect what is

going on inside us. For example, happiness, surprise, fear, anger etc. usually

require definite facial expressions and eye patterns.

���� Eye Contact :Eyes are considered mirrors of soul. Eye contact takes place

when two people look at each other’s eyes in order to seek feedback. Eyes

provide information about speakers sincerity, goodwill and flexibility.

2. Para Language : Para language literary means ‘like a language’. It is the

communication effect of the speed, pitch, volume, connectivity of spoken words

through voice variations and stress on the different words.

Voice : The kind of voice used in oral Communication conveys the hints about

speakers’ sex, background, education and temperament. The following facets of

voice add more meaning to the oral message.

a) Pitch variation: Pitch is the high or low note of scale. The people in authority

speak in high pitched voice. The too high pitch voice indicates emotional

imbalance.

b) Speaking spead: Easy parts of the message should be presented at brisk

pace. The complex part or the parts we want to emphasize should be presented

at slower speed..

c) Pause: The correct pauses at appropriate place indicate the confidence of the

speaker.

d) Volume: The volume of our voice should be adjusted as per the size of the

audience.

28

Word Stress:

The stress on proper word is essential to convey the intended meaning.

Advantages of Para Language:

� It includes speakers’ status.

� It is an integral part of language.

� It gives the clear hints about speakers’ educational background.

� It indicates national and regional background.

� It indicates speakers’ mental state.

3. Space Language: Space language is a form of nonverbal communication.

The space around us end its content convey a definite meaning. Space language is

crafted by our culture. Distance between us and the other people with whom we

communicate conveys us some hints about the nature of our relations with them.

Zone Distance

Intimate Physical contact to 18 inches.

Personal Physical contact to 18 inches to 4 feet.

Social Physical contact to 4 feet to 12 feet.

Public Physical contact to 12 onward as far as we can

see and hear.

In each these zones (spaces), our communication behaviours differ and convey

different meanings.

� Intimate Space Language: It is the space for our lovers, parents, and

members of the family. The language used is informal. It is in the form of

whispers and low tone.

���� Personal Space Language: It is the space for our close friends colleagues,

associates and visitors. Communication is personal in nature.

���� Social Space Language: It is the space for our work related interactions. We

do most of our business in the social space.

���� Public Space Language : The communication is formal and mostly oneway

communication. It has no attachment or emotions involved in it.

29

4. Sign Language: The English words ‘Signs’ and ‘Signal’ are both derived

from the Latin word ‘Signum’ which means ‘a mark’. Signs and signals are used in

communication when the communicants do not have a common language. Even

when the communicants a common language, the use of signs and signals is a

speedy way of communicating. The language of sign is of universal nature.

According to D.Joel Whalen, “The most basic element of communication is the sign.

A sign is a symbol. A symbol is something that stands for something else.” In this

sense, language itself is a kind of symbol.

Sign language has two forms. Viz, Visual signs and Audio signals

1. Visual Signs:

� Colours: Colours are silent communicators of different ideals. Traffic signals

regulate the traffic on roads. Colours have psychological effect e.g. fresh and

cooling colours at work place. They also symbolise different moods and feelings

e.g. black stands for sorrow, red for danger etc. Besides, they are used for

identification.

���� Pictures: Pictures is an effective form of nonverbal communication. It is the

most suitable mode of mass communication e.g. paintings and engravings

found on the wall of ancient caves and temples.

���� Graphics: Graphs and charts convey a statistical information.

���� Posters : A poster is a combination of pictures and words. Poster’s help in

public education i.e. aids awareness, family planning.

� Signs and Signals: A signs has a fixed meaning e.g. the danger sign of a skull

and cross bones. A signals is a previously agreed movement which serves to

warn, direct or command

���� Maps: Maps convey space relationships between places. They give

instructions about routes and help to locate places.

2. Audio Sound Singals:

Audio sound signals are the symbols perceived by ears. They have been used

by human beings since the beginning of civilization drum bits were used by ancient

people to convey the messages. Even today, we use different alarm signals such as

fire alarm, casually alarm etc.

2. Types/Channels of Communication: Recent advance in information

technology has resulted into a new pattern of communication networks. Computer

30

mediated communication is replacing many of the traditional forms of internal

communication is many business organizations. This new form of communication is

quick and tends to be informal. An organization has internal and external

communication.

A. External Communication: Communication with those outside the

organization is known as external communication. External communication is the

two types viz, Outward communication and Inward communication.

���� Outward Communication: Message that go out of an organization to

customers, suppliers, banks, insurance companies, and the public are called as

outward communication. They may be in the form of letters, faxes, telephone

calls etc.

���� Inward Communication: Message, that are received from outside i.e., from

customers, suppliers, other organization, government departments and so on,

are termed as inward communication. They may be in the form of letters,

telegrams, fax messages, telex message etc.

B. Internal Communication: Communication within the organization among

its member, is called as internal communication internal Communication has two

channels i.e. Formal and informal channels.

���� Formal Channels: Formal channels are those which carry the official

messages in the organization. They are of two types viz, vertical

communication and horizontal communication.

���� Vertical Communication: Vertical communication includes all the message

that more between subordinates and their superiors. It is also known as Two-

way communication i.e., Downloads Communication and Upward

Communication.

���� Downloads Communication: When order, directions, instructions and

information flow downward from superiors to subordinates it is called Downward

communication.

���� Upward Communication: When, within an organization, information is given

to superiors by their subordinates, it is known as Upward communication.

���� Horizontal communication: Communication between persons of equator

comparable status is known as Horizontal communication, viz, clerk, manger to

manager etc.

31

Informal Channels:

In addition to the formal channels of communication, every institution has

informal communication network that supplements official channels. Informal

channel of communication is one by which news and information are quickly

transmitted among persons who work together in a group. It is called grapevine as it

spreads in any direction and anywhere. Informal channels link persons with similar

interests and experiences.

3. Media and Modes of Communication: A medium is the means of

conveying a message. Some media carry written words and/ or pictures/graphics

and other media carry the voice. There are many media of communication. One can

transmit a message by any suitable medium. Written messages are transmitted by

the mail, courier, telegraph, telex, fax, E-mail etc. Oral messages are transmitted by

the microphone/Land speaker, the telephone cellular phone, voice mail and the

radio. The cinema and the TV can transmit all types of messages, written, oral,

visual and auditory

Conventional Modes: Conventional modes include mail, telex, and telegraph.

Electronic Modes: Electronic modes comprise of telephone, cellular or mobile

phone, fax, E-mail, teleconferencing, Internet and E-commerce.

Media of Mass Communication:

Mass Communication is communication from many to many. The messages are

prepared by teams and reach a large number of people. The conventional modes of

mass communication include dance, drama etc. Radio, TV, films, newspapers and

periodicals are the modern modes of mass communication. The wart modern media

of mass communication include satellite, lugging and Internet.

1.2.3 Integration of Transport and Communication means:

Infrastructure is a source of positive externalities in the development process. In

fact, there is a positive relationship between the level of economic development and

the availability of infrastructure including transport and communication. Transport

means to carry goods and services from one place to another. Communication

implies an exchange of information, ideas and emotions with the help of words,

letters, symbols or messages which brings about common understanding and

response. Means of transport include road transport (animals, animal carts, motor

cars, buses, trucks, scooters etc.) rail transport, water transport (canoes, boats,

steamers and ships) and the air transport (Aero planes, helicopters etc.) Modes of

32

communication comprise of mail, telex, telegraph, telephone cellular or mobile

phone fax, E-mail teleconferencing, internet and E-commerce. Radio, television,

films, newspapers and periodicals are the modern modes of mass communication.

The ultra modern modes of mass communication include satellite, blogging and

internet. There is a close interlink between communications and transport. They are

complementary to one another. Improvements in communication help to speed up

transport while improvements in transport help to speed up communications. The

competitiveness of national economy, by and large, depends upon the efficiency of

its transport and communication. Hence, transport and communication are

described as the lifelines of nation.

An efficient transport system is necessary both for national integration as well

as for socio-economic development. Transport can be classified as land, water and

air transport. In ancient times, animals and human porters were used as means of

transport. They were also used to convey message from one place to another.

However, with every advance in transportation, the postal system has become more

efficient. For instant, sea mail requires two months for a letter to reach from India to

the U.S.A., but air mail can do this task in just twelve days. Telecommunication

networks have resulted in still faster and more efficient mail services. Road, rail

water and air transports are complementary to each other. Therefore, they need to

be integrated properly. For many Indian Villages, it is the lack of transport

connectivity and communication that cripples their development.

The development of radio, telephone, television, mobile telephone networks

requires the efficient transport system. The material and equipments necessary to

TV, radio, telephone centres need to be transported from one place to another. This

requires well developed network of roads, railways, airports etc.

The mobility of factors of production like labour, capital etc. promotes economic

growth. These factors of production needs to be moved from the surplus areas is the

deficient area’s which requires both well developed transport as well as

communication. The most striking feature of industrial Revolution was the movement

of factors of production- the tremendous speed with which goods and persons could

be carried to far off places.

Business firms produce different goods. They need to collect information

regarding the demand for their products from different places. This calls for the

efficient communication system. Besides, there is a need for a well developed

transport system to distribute the finished goods over wider national and

international markets.

33

Mail, telegraph, telephone, telex, fax etc. are the media and modes of

communication. The people communicate to each other through these modes and

media. The communication system is changing very fast. Telegraphs are being

replaced by the teleprinters. Satellites are used for the communication

Teleconferencing and video-conferencing are used for face-to-face interaction

without having to travel long distances to meet persons. Nowadays, mobile

telephone is a popular mode of communication. It is capable to reduce the rural-

urban disparities. The efficient communication as well as transport are essential to

maintain internal law and order and national security. Rail transport, air transport

etc.depend by and large on the communication system for their functioning. In short,

transport and communication are complementary to one another. Therefore, they

should be developed in an integrated manner.

1.2.4 Government Policy Since 1991:

The sustainable and inclusive economic growth required extensive and efficient

infrastructure network. It is critical for the effective functioning of the economy and

industry. The key to global competitiveness of the Indian economy lies in building a

high class infrastructure. In order to accelerate the pace of infrastructure

development and reduce the infrastructure deficit, the Government has initiated a

number of projects and schemes to upgrade physical infrastructure. It is, therefore,

in this context necessary to study the policy of the Government towards the

development of transport and communication since, 1991.

Transport:

Road Transport:

An efficient road network is essential both for national integration as well as for

socio-economic development. India has 3.3. million kilometers of road network. It is

the second largest road network in the world. It carries 65 percent of freight and 80

percent of passanger traffic. India’s road network contists of national highways,

State Highways, Major/District roads and villages/rural roads. National highways

constitute only about 2 percent of the Indian’s road network. But they carry about 40

percent of the total road traffic in India. The National Highways Development project

(NHDP) is managed by the National Highways Authority of India (NHAI) and Ministry

of Road Transport and Highways. It aims to upgrade, rehabilitate and widen major

highways in India. The Government has approved various Public Private Partnership

(PPP) projects on a Build, Operate and Transfer (BOT) basis to upgrade the

34

national highways and to convert single lane highways into two lanes with paved

shoulders.

The roads length per 100 square kilometres as the national level rose from 45.1

kilometres to 81.2 kilometres during the period from 1981 to 2004. The coverage of

road to per million population increased from 21.7 kilometers in 1981 to 23.9

kilometers in 1991 and from 23.9 kilometers in 1991 to 26.0 kilometers in 2004

under the constitution, responsibility for the development and main maintenance of

national highways rests with the Central Government. The responsibility for the

development of other roads rests with the State Government concerned. The

Pradhan Mantri Bharat Jodo Pariyojana (PMBJP) deals with linking up major cities

to the NHDP highways. The Pradhan Mantri Gram Sadak Yojana (PMGSY)

addresses rural roads. Rural roads has been identified as one of the six components

of Bharat Nirman and has the goal to provide all weather road connectivity to all

village with a population of 1000 (500 in the case of hilly or tribal areas). The

Government of India is taking initiatives with the help of Asian Development Bank

(ADB) and the World Bank. Due consideration is also being given to roads in urban

areas for which National Urban Transport Policy was adopted in 2006.

Rail Transport:

The Indian railway system is presently the largest in Asia and second largest in

the world. It is owned and managed by the Ministry of Railway and the Railway

Board. The total route length of railways at the end of March 2007 was 63,465 km.

route was electrified. During 2006-07, the Indian railways carried 6,219 million

passanger and 727.75 million touness of revenue earning freight traffic.

The Indian railways operate services on three gauges . the broad guage, the

metre guage and the narrow guage. The broad guage network is the largest

operating network (49,820 km) in India and accounts for the bulk of traffic.

On August 15, 2002 the Prime Minister approved the Nation Railways Vikas

Yojana. Salient features of this scheme are the following.

���� Removal of capacity bottleneck in the critical sections of the railway network

���� Strengthening of the Golden Quadrilateral and its Diagonals.

���� Strengthening of rail connectivity to ports

���� Construction of four mega brides.

���� Operation Cleanliness.

35

Indian railways needs to be more user-friendly and market-savvy organization. It is

supporting from the loss of freight market share. Therefore, it has to improve the

quality of its services. The Eleventh plan laid emphasis on the capacity

enhancement, technology up gradation, higher maintenance standards and safely

and passenger amenities. It is the fact that transportation by rail has the highest

energy efficiency as compared with other options. However, this requires substantial

reforms in the functioning of railways. The Metro Railways Amendment Act, 2009 is

being implemented to develop metro railways in Delhi, Bangalore, Chennai and

Mumbai. In order to attract private capital for accelerated construction of fixed rail

infrastructure, the Ministry of Railways has for mutated ppp investment models for

its existing shelf of projects and new projects.

Water Transport:

Water Transport can be divided into inland water transport and shipping. India

has got about 14,500 km of navigable inland waterways on the areas of the states

like Assam, West Bengal, Bihar, Orissa, Andhra Pradesh and Tamilnadu. Inland

water transport was given priority in the sixth and seventh plans. The Inland water

Transport policy, 2001 aims of giving a boost to the development of this mode of

transport. The Eleventh plan emphasized the development of infrastructure for the

existing waterways.

Shipping is divided into coastal shipping and overseas shipping. India has a

long coastline of 7517 kms. There are 12 major and 200 non-major parts which

serve the Indian coastline. Major Ports handle about 75 percent of port traffic.

Overseas shipping occupies an important place in international trade. Therefore,

considerable attention has been paid to increase the shipping tonnage in the

planning period. The capacity of the Indian ports increased from 20 million tonnes of

cargo handing in 1951 to 519.67 million tones in 2007-08.

The primary responsibility for development and management of major ports

rests with the central Government. These ports are governed by the major port

Trusts Act, 1963. State Governments administer interrelate and the minor ports

under the Indian parts Act, 1908. The other Acts applicable to the port sector are the

Merchant shipping Act, 1958, The Dock workers. (Regulation and Employment) Act,

1948 and Dock workers (Safety Health and wel fore) Act of 1986.

The key problem faced by India ports is low productivity attributed to the factors

like operational constraints, poor inter-departmental communication, inadequate

facilities for berth and channels at certain ports. Etc. Recently, same areas of Indian

36

part facilities have been opened up to the private sector on a BOT basis. They

include construction of cargo handling berths and dry-docks, container terminals and

warehousing facilities and ship repair facilities. This is expected to bring about an

improvement in efficiency, productivity, quality of service as well as to usher

competitiveness in the provision of part services.

Air Transport:

In India, a beginning in air transport was made in 1920. The civil aviation works

actually started in 1924-25. It was managed by the private companies. In First plan,

the government decided to nationalize air transport. Accordingly, the Air Corporation

Act was passed in 1953. As per the Act, two state corporations namely, the Air India

International and the Indian Airlines were established. The Air India International

system. The Indian Air lines corporation was to operate the internal scheduled

services and the air services to the neighbouring countries. The regulatory function

are the responsibility of the Directorate General of Civil Aviation (DGCA) and Bureau

of Civil Aviation Security (BCAS). Operational functions are performed by Air India

Ltd., Indian Airlines Ltd. Pawan Hans Helicopters Ltd; together with the other private

sector airline operators. Infrastructure facilities are provided by the Airports Authority

of India.(AAI)

The monopoly of public sector air carriers ended with the amendment of Air

transport Act, 1953 in March, 1994. Automatic approval Act. 1953 in March, 1994.

Automatic approval for foreign equity participation in airport infrastructure up to 100

has been allowed. Foreign investors are allowed to have representation on Board of

Directors of the domestic airline company. The Airport Infrastructure policy 1997,

permits private equity participation in development of airport infrastructure. The

international airport in Delhi and Mumbai are being modernised and upgraded

through private sector participation. AA1 is also considering development of non-

metro airports. Domestic passaenger traffic and cargo handling reached 108.1.

Million and 0.75 MMT respectively during January-November 2011. International

passanger traffic and cargo handling reached 33.6 million passangers and 1.4 MMT

respectively during the same period.

Communication:

Post:

India Post is the largest postal network in the world. It has 1,54,979 post offices

across the country. As on 31 march 2010, out of this total, 1,39,182 were in rural

areas and 15,797 in Urban areas. On an average, each post office serves 7176

M.A. II- Economics- Economics Transport and Communication

37

people and covers an area of approximately 21.21 sq.km. India Post has so far

introduced 1082 franchisee outlets to cater to the demand for postal services.

Except for courier services, postal operations are still a government monopoly.

During the reform period, India Post has taken the following steps:

� Project Arrow - About 1530 post offices have been covered under the 6 ‘Project

Arrow Transforming India Post.’

� Automated Mail Processing Centres (AMPC) are set up in Delhi, Mumbai,

Kolkata, Chennai, Bangalore and Hyderabad.

� The India Post aircrafts operates on the Kolkata- Guwahati- Imphal- Agartala-

Kolkata rout on a regular basis.

� Computerisation and networking of post offices

� Financial inclusion

� Disbursement of wages to Mahatma Gandhi National Employment Guarantee

Scheme (MGNREGS) beneficiaries.

� The Department of Posts in collaboration with the NABARD provides micro

credit facility to self help groups (SHGs).

� Postal Life Insurance and Rural Postal Life Insurance

� Central Assistant Public Information Officer at tehsil level.

� World Net Express in collaboration with Duetsche Post.

Telecommunication:

Indian telecommunication is in operation since 1851. It is among the oldest

such systems in the world. Telephone services were originally operated by private

companies. However, they were taken over by the Government of India in 1943.

Indian telecommunication is considered to be one of the most successful stories of

the Indian liberalisation. In 1991, India had a total stock of just 5 million telephones.

By 2009, this rose to 562 million phones. As a result, the tele-density increased from

less than 1 per 100 in 1991 to about 41 in 2009. The ratio of mobile phones to fixed

phones increased from insignificant amounts to about 14. It is attributed to the

diffusion of Internet in the country. Following steps taken by the Government of India

during the reform period have contributed immensely to the development of

telecommunication in India.

38

� National Telecom Policy of 1994- Telecommunication opened to the private

sector.

� Telecom Regulatory Authority Act of 1997- Telecom Regulatory Authority of

India. (TRAI) was set up on February, 20, 1997.

� New Telecom Policy of 1999.-

Bharat Sanchar Nigam Ltd (BSNL) was setup, the government opened the

National long distance services to private operators.

� Broad Band Policy of 2004 – Encouraged the growth of mobile telephone.

� Third Generation (3G) telecom services.

� Mobile Number Portability.

Following policies/indirectly influenced Indian Telecommunication

� Foreign Direct Investment Policy.

� Electronics Hardware Policy- 2003.

� Semi Conductor Policy of 2007.

1.3 Summary:

Adequate quantity, quality and reliability of infrastructure are essential for rapid

economic growth. Transport and Communication are no exceptions to this.

Transportation means the conveyance of goods and persons from one place to

another. Communication is the process by which information is transmitted between

individuals and or organisations so that an understanding response results.

Transport and communication occupy a pivotal place in different walks of human life

economic, political, Social and Cultural.

Transport can be classified as Land transport, Water transport and air transport.

Communication may be classified as the methods of communication (verbal and

non-verbal communication), channel of communication (External communication

and internal communication), and media and modes of communication.

Infrastructure is a source of positive externalities in the development process.

Transport and Communication are described as the life lines of a nation. They are

complementary to one another. Improvements in communication help to speed up

transport while improvements in transport help to speed up communications.

39

In order to accelerate the pace of infrastructure development and reduce the

infrastructure deficit, the Government has initiated a number of measures since

1991. Privatisation and approval to the foreign investments are the important

measures adopted by the Government. Indian telecommunication is considered to

be one of the most successful stories of the Indian liberalisation.

1.4 Glossary:

� Transport : the conveyance of goods and persons from one place to another.

� Communication : the transmission and interchange with understanding of

ideas, facts and courses of action.

� Communicator: the person who initiates the action of communicating.

� Verbal Communication: Communicating by the use of words, whether written

or spoken.

� Non-Verbal Communication: Communication without the use of words or

language.

1.5: Self – Learning Questions:

A) Choose the correct answers given below and rewrite the statement.

1. The term transport is derived from the Latin word ………………………

a) Transportation b)Transport c)Transformer d) Transportare

2 As per the Nagpur plan- 1943, Indian roads are classified into …………………

categories.

a) Two b) Four c) Three d) Five

3 Indian road network is the ………………………… largest road network.

a) Third b) Fourth c) Second d) Fifth

4. The Prime Minister approved the National Railways Vikas Yojana on …………

a) August 15, 2002 b) August 15, 2004 c) August 15, 2003 d) August 15, 2005

40

5. Telecom Regulatory Authority of India was established on ……………………

a) February 20, 1997 b) February 21, 1999 c) February 20, 1998 d) February 21, 2000

B) Answer in One Sentence

1. What is Transport?

2. State the meaning of the term ‘Communication’.

3. What is a ‘message’ ?

4. Define the term ‘Communicator’.

5. State the meaning of the term ‘ Communicatee’

1.6 Answer to the Self Learning Questions:

A) 1) d 2) c 3) b 4) a 5) a

B)

1. The conveyance of goods and persons from one place to another.

2. The process by which information is transmitted between individuals and or

organizations so that an understanding response results

3. It is the information conveyed such as instructions, ideas, orders etc.

4. The persons who initiates the action of communicating.

5. The person for whom the communication is intended.

1.7 Questions For self Study:

A. Essay type questions

1. What is transport? State the significance of ‘transport’

2. What is Communicator ? State the significance of ‘Communication’

3. Explain in brief, the classification of transport

4. Define communication. Explain the methods of communication.

5. Review the Governments transport policy since 1991.

B. Write short notes.

1. Economic significance of transport

41

2. Economic significance of Communication

3. Land Transport

4. Non. Verbal Communication

5. Integration of Transport and communication

1.8 Field Work :

1. Visit the nearby S.T. bus stand depo and collect the information of the arrival

and departure of buses.

2. While communicating your friends or any other persons observe his or her body

movements, facial expressions etc and prepare a note.

3. Prepare the list of programmes transmitted through different channels on the

T.V.Set at your home.

1.9 References:

1. J.K Jain:(1981) Transport Economics, Chaitanya Publishing House Allahabad.

2. M.V. Srinivasa Gowda, Susheela Subrahmanya Ed. (1997) Infrastructure

Development For Economic Growth, Deep & Deep Publications, New Delhi

3. A. Vijaykumar:(2008) Services sector in India, Recent Policy Initiatives, New

Century Publication, New Delhi, India.

4. Aspi Doctor, Rhoda Doctor (2008) Principles and Practice of Business

Communication, Sheth Publishers Pvt. Ltd. Mumbai

5. Urmila Rai, S.M.Rai (2008) Business Communication, Himalaya Publishing

House, New Delhi.

6. Dr.P.M.Herekar:(2007) Business Communication, Mehta Publishing House.

7. S.K.Misra & V.K.Pur:(2009) Indian Economy, Himalaya Publishing House,

Mumbai.

8. Government of India:(2011), Economic Survey 2010-11, Oxford, Uni. Press,

New Delhi.

9. D.M.Nachane(Ed):(2011), Indian Development Report 2011, Oxford, Uni.

Press, New Delhi.

10. Institute of Applied Manpower Research, Planning Commission Government of

India : (2011), Indian Human Development Report 2011, Towards Social

Inclusion ,Oxford, Uni. Press, New Delhi.

11. ;’koarjko pOgk.k egkjk”Vª eqDr fo|kihB] ukf’kd%¼1991½ MAR 301 ejkBh Hkk”ksph laokn dkS’kY;s% � � �

42

Unit- 2

Railway Transport

Index:

2.0: Objectives

2.1: Introduction

2.2: Subject Description

2.2.1: Nature, Scope and Importance of Railway Transport

2.2.2: Laws of Returns in Railway Transport

2.2.3: Growth and Problems of Indian Railway during Planning Period

2.2.4: Structure and Theories of Frights and Passenger transport

2.2.5: Regulation, Administration and Control of Railway Transport

2.2.6: Railway Budget- 2012

2.3: Summary

2.4: Self-learning Questions

2.5: Answers of Self-learning Questions

2.6: Key Words

2.7: Questions for Self Study

2.8: Field Work

2.9: References for Further Study

2.0: Objectives:

Following are the main objectives of this unit.

1. To understand the nature, scope and importance of railway transport.

2. To study the theories of returns of railway transport

43

3. To understand the progress and problems of Indian railway during planning

period.

4. To study the structure of freight and passenger transport.

5. To study the Regulation, Administration and Control of Railway Transport

6. To analyze the Railway Budget: 2012-13

2.1: Introduction:

In the unit no 1, we have studied the importance and classification of the

Transport and Communication means. The economic, social and cultural

development of each and every country is depending on the development of

transportation sector. Now a day in the process of industrialization transport system

became a base. International trade is also depending upon the different kinds of

transportation means. The role of transport is very important in the development of

backward regions, to provide required inputs for the agricultural sector and to

transport the products from agriculture to market, to provide assistance to the

society in the natural calamities, to protect the economy, and cultural exchange etc.

The Rail, Road, Water and Air transport is working in the economy as like blood

veins in the human body. In this respect we will try to focus on the rail transport.

2.2: Subject Description:

In the present unit we will try to discuss on the nature,, scope and importance of

railway transport. The progress and problems of Indian rail during the planning

period, the fare rates for the passengers and freight, the regulation, administration

and control on the rail transport. At the last we also try to discuss on the railway

budget 2012-13.

2.2.1: Nature, Scope and Importance of Rail Transport:

In India Railways is the most important form of transport system. Railways are

in existence in India for only about 142 years. The first railway was laid between

Bombay and Thane in 1853. After that, rail services have developed a lot. At the

time of independence, the total route length was 53596 km with 8209 engines,

19536 passenger bogies and 206000 goods wagons. The Britishers had built up an

44

extensive network of railways to exercise and maintain a tight control over the vast

Indian Territory and to open up the country as a source of food and raw materials for

their industries. With the following points we can explain the nature, scope and

importance of railway transport.

1. Speed and safety: Rail transport is the most important means of land

transportation because of its speed and safety. It is a useful mean of transport for

carrying cheap, bulky and heavy articles over long distances.

2. Depend on Climatic Conditions: Rail Transport is depending on the

climatic conditions of a region. The cost of providing railway service in plain region is

less as compared to hilly areas because of the high cost involved in digging tunnels.

The development of railways is also difficult in areas of heavy rainfall and snowfall

throughout the year

3. Industrial Development: Railway assists to accelerate the process of

industrialization in many countries. The stage of economic and industrial

development of a country can be judged from the adequacy of the rail network in it.

The development of Mumbai’s Cotton Industry, Jute industry of Kolkatta and Coal

industry of Zarkahand is and impact of expansion of rail transport. Railway playing a

vital role in providing the raw material to the industries and transport, the finished

goods to the market. The developed countries in the world have reached upto the

developed stage due to development of railway transport. The development of small

scale industry in Japan is totally depending on the rail transport.

4. Capital Base: Heavy capital investment is the one more important feature

of rail transport. The capacity of railways to carry passenger and goods is much

larger than road transport. It can transport full wagonload goods over long distances

at lower cost.

5. Economic Mode of Transportation: Railways transport is an economic

mode for transportation of bulk commodities and passengers. With a high degree of

operating efficiency, the railways are considered as a vehicle of economic growth.

As compared to the road and air transport rail transport is economic mode for long

distance. Railways transport is an important and inexpensive mode for economic

exploration of natural resources in a large country like India.

45

6. Own Separate Track: One more characteristics of railway transport is that,

railways have its own separate track and wagons to carry passengers and goods.

The movement from one track to another or in the reverse direction can only be

made where facilities for switching or crossing loops have been provided. The

movement of goods and passengers in railway transport takes place at fixed points

provided for the purpose, i.e. at terminal stations or in the siding, where they have to

be brought by road or other modes.

7. Door-to-door delivery not possible: Road transport can provide door-to-

door delivery but railway transport has not possible this kind of facility. Railway

transport is required the complementary road transport support. The movement

takes place in train loads resulting in haulage of large quantity of goods at a time,

but this also needs marshalling of wagons enroute for switching individual wagons to

proper destination which results in detention of goods as well as additional cost of

marshalling.

8. Useful in Natural Calamities: Railway transport is very much useful in the

natural calamities. In the situation of flood, earthquake, draught etc. railway

transport can provide the packets of food, medicine, shifting of citizens etc. For the

defense purpose this mode of transport is playing crucial role.

9. Increase in Competitiveness: Railways transport increases the

competitiveness of products in the market by reducing transportation cost. The

industrially developed countries have developed well-planned railway network in

their countries to optimize the utilization of their resources by cutting down the

transportation cost. This mode of transport offers an excellent opportunity to do so.

10. Reduce the distance between urban and rural area: Railway transport is

helpful to reduce the distance between urban and rural area. Due to the rapid

development and increase in the network railway can reach upto the every suburban

area. So the people from suburban and rural area can travel easily from their places

to urban place for different purposes. They can work at urban area and live in the

rural area due to the only availability of rail transport. It is helpful to the society to get

the different types of opportunities from the urban area.

46

11. Cultural Exchange: Railways are travelling from each and every state and

part of the country. The different culture having passengers are travelling from the

same train. Passengers can share their cultural thing and thoughts, which are very

helpful for the national integrity. Passenger from the whole country can travel and

visit to historical, religious, geographical and cultural places. From this travelling it is

possible to conserve the cultural heritage.

12. Employment Generation: Railway transport is one of the largest public

sectors which provide the direct and indirect employment opportunities to the all

sections of the society. Railway provides employment opportunities to youth for

different posts. It is paying to the employees as per the central government rules

and regulations. Railway is also providing the social security to their employees. So

Rail Transport is playing an important role in the employment generation.

2.2.2: Laws of Returns in Railway Transport:

The service of railway transport is one kind of product. So the law of return in

the firm is also applicable to the rail transport. In the railway transport different kinds

of economies are realising. Railway is getting the internal and external economies,

so it is possible to save the capital with the help of labour distribution and

specialization. Railway transport is getting technological, managerial, market, capital

and risk bearing economies. It includes the purchase of land, tracks, signaling

system, construction of railway stations, purchase the rolling stock etc. Single

railway track having the capacity to travel 100 trains per day, but at the initial stage

the number of trains are also less. As per the increase in the demand for

transportation there is increase in the rolling stock also. So, at the initial stage the

cost of transportation is high. With the increase in the demand of transport the fixed

cost is distributed on per unit of transport and per unit cost will decline. From this

stage the increasing returns or decreasing cost stage will start. The rolling stock of

railway transport is utilized at optimum level. Railway transport getting profit on large

scale and this situation remain upto long period, so this stage is called constant

returns.

The increasing cost or the decreasing returns are started from breakeven level

where the maximum capacity has utilized of fixed factors. After reaching the

optimum scale, the firm may try to remain there. Perhaps constant returns may

47

continue over a certain range. Constant returns cannot continue indefinitely. When

all factors are increased in the same proportion, a stage will be reached when there

is no further scope for division of labour. In fact, any further increase in scale will

bring in diseconomies and disadvantages of large-scale production. This is why

returns ultimately start declining. In this stage it is necessary to build the new railway

track. An increase in the demand for transportation and demand forecasting of

transportation should be take into consideration while taking the decision of new

track. If there is delay in building up the new track the pressure of transportation is

increased on the present rolling stock. So the maintenance cost is increasing and

the slope of cost curve would positively slope from left to right. The new railway

track will benefit to decrease in the cost of transportation because the pressure of

goods and passengers on present rolling stock is reducing. This stage is called

increasing returns.

We can explain the law of returns to scale in railway transport with the help of

following diagram.

Diagram No. 1.

Above diagram shows the returns to scale in railway transport. Ox axis shows the

Quantity of transportation service and Oy axis shows the Cost of transport service.

The level of cost is decreasing upto K level. At the K level railway transport can get

the maximum returns, because it is possible to railway to optimum utilization of the

rolling stock. The slope of cost curve from K to K1 shows the increasing cost of

48

The measures for increase in transportation capacity:

1. To increase the number of Long route Trains.

2. To increase the speed of the Trains

3. To improve the capacity of Trains with the using of modern technology

4. Reform in controlling system

5. Rail-road Co-ordination

2.2.3: Growth and Problems of Indian Rail during Plan Period:

The Indian Railway had modest beginnings in 16th April 1853 when first railway

train journeyed a distance of 21 mails (34 K.M.) between Bombay to Thana within

75 minutes. The first rail had 14 wagons and 400 passengers were journeyed. The

Indian railways have been a good integrating force of more than 155 years. The

railway are the most convenient mode of transport for the long distance and are

most suitable for carrying heavy and bulky goods like iron etc. The railway

development was very rapid and by 1900 there were nearly 25000 miles of railway

line. Railway construction of slackened and in the next 50 years, only 10,000 miles

or railway lines were added making up a total of a little more than 34,000 miles of

railway line in 1950.

Originally, the Railways were operated by private companies owned by

Englishmen. The Government gave certain concessions such as free grant of land,

guarantee of a minimum return on capital etc. In the period of 1954 to 1860 there

were eight private Rail companies has been established.

1. The East Indian Railway

2. The Great Indian Peninsula Railway

3. The Madras Railway

4. The Bombay, Baroda and Central India Railway

5. The Sindhia Railway

6. The Western Bengal Railway

7. The South Indian Railway

M.A. II- Economics- Economics Transport and Communication

49

8. The Kolkata and South Eastern Railway

Government of India and these eight companies signed an agreement and with

the help of Guarantee system Railway transport has been established. In this

agreement, it was the condition on the Government to pay 4.5% to 5% rate of

interest on the capital invested by the private companies, provide the land on free of

cost for the Railway stations, Buildings and Houses of workers. Companies should

give the 50% share from their profit. With this agreement upto the 1853, there were

240 K.M. railway lines were originated. There were criticisms and complaints against

private ownership and management. The benefits of this agreement got by the

railway companies only. This system was worked upto the 1860. Till this year 4255

k.m. railway lines were completed. Then after, Government has taken the charge of

development of railway and private companies’ agreement has been abolished.

Under these contracts the Railway Companies undertook to construct and

manage specified lines, while the East India Company (later, the Secretary of State

for India) agreed to provide land free of cost, and also guaranteed return of Capital

upto specified rates of interest, the rates fixed being in various cases were 5 per

cent, 4-3/4 per cent and 4-1/2 percent according to the market rates prevailing at

the time of execution of the contracts. The rate of exchange for remittance of

interest charge was also fixed. Half of any surplus profits earned were to be used

towards repaying the Government any sums by which it had been called upon to

supplement the net earnings in any previous period to make good the guaranteed

rate of interest and the remainder was to belong to the shareholders.

The companies were placed by contract under the supervision and control of

the Government regarding standard and details of construction, the rolling stock to

be provided, the number, time and speed of trains, the rates and fares to be

charged, the expenditure to be incurred, the standard of maintenance and, above

all, the form of accounts. The Railways were to be held by the Companies on leases

terminating at the end of 99 years when the fair value of their rolling stock, plant and

machinery was to be paid to them. Provision was also made to enable the

Government to purchase the lines after 25 or 50 years on payment of the

Companies Capital at par.

50

Government started the railway development programme, but it was not

succeeded, because the unfavorable environmental conditions and drought. So

Government used the maximum funds for the removal of drought. It was the

recommendation of railway line development for the removal of draught. But,

government don’t have the sufficient capital so, again after 1880 the new warrantee

system has been started. In the year 1881, Lord Hartington prepared the new rail

development programme. It had some conditions and legislative articles. In this

period 33 small and large size rail companies were started. In the year 1900 there

was 24,752 k.m. railway lines were developed. In year 1925, the Government of

India took over the first railway company. Gradually, the other companies were also

taken over; by 1950, the railways in the former princely States were also taken over

by the Government of India. Indian Railway has been affected by the First World

War, Great Depression and Second World War. Railway faced the large loss due to

above incidences. Government of India has appointed the different committees for

the recommendation for development of Railway Transport. These committees are

as under:

1. Robertson Committee (1901)

2. Mackey Committee (1907)

3. Acworth Committee (1920)

4. Dickenson Committee (1926)

5. Rowan Committee (1926)

6. Pope Committee (1932)

7. Wedgwood Committee (1936)

The Indian Railway has now become a unified State-enterprise. It is the

country’s biggest nationalized enterprise and one of the largest railway system of

the world with a capital base of about Rs. 58000 crore and 63,000 route K.ms. In

terms of route length, the Indian Railway system is fourth largest in the world after

US railroads and Russian and Chinese railways. As regards freight traffic, again it is

fourth but substantially behind these three railway systems.

51

Effect of Partition:

With the attainment of independence and partition of the country on the 15th

August, 1947 two of the existing Railway systems {viz. North Western Railway in the

west and the Bengal Assam Railway in the east), which fell into both the territories,

had to be divided. The portions of these -systems falling in India were either partly

added to the other existing lines or partly formed into separate units thus the

Eastern Punjab Railway and the Assam Railway Administrations came into being as

separate units although they were not considered economical, efficient and self-

sufficient systems. An administrative re-organisation with a view to securing both,

efficiency in operation end economy in management, therefore, became a

compelling necessity.

Taking over of the ex-States Railways: As a result of integration of the Indian

States into a small number of sizeable units their incorporation in the Union, and the

further integration with the Union of their federal functions, the following railways

which were owned and managed by those States came under the control of the

Central Government in addition to these which already being worked by the Indian

Railways and were later merged into the contiguous Indian Railway System

Name of Railway Mileage Date from which taken over by

Centre

(i) Gaekwar's Baroda State Railway* 736 1st August, 1949

(ii) Bikaner State Railway 883 1st August, 1950

(iii) Cutch State Railway 72 1st August, 1950

(iv) Dholpur State Railway 56 1st August, 1950

(v) Jaipur State Railway 253 1st August, 1950

(vi) Jodhpur Railway 807 1st August, 1950

(vii) Mysore State Railway 712 1st August, 1950

(viii) Nizam's State Railway 1396 1st August, 1950

(ix) Rajasthan Railway 179 1st August, 1950

52

Name of Railway Mileage Date from which taken over by

Centre

(x) Saurashtra Railway 1274 1st August, 1950

(w) Scindia State Railway 294 1st August, 1950

Growth of Railway since Planning Period:

Plans for rehabilitating the railways system started after the partition of the

country in the year 1947. Indian railway had to surrender 11,166 k.ms of railway line

alongwith a considerable portion of locomotives, coaching vehicles and wagons to

Pakistan. The existing tracks without adequate maintenance were not of high order.

All these factors had their impact on movement of trains, frequency of engine failure,

and decline in the efficiency of rail operation. So, large orders were placed with early

delivery dates for locomotives. Efforts were made to set up a modern locomotive

manufacturing industry with a capacity to produce 120 locomotives annually, and

other spare components. A committee was set up to undertake a detailed

examination of rates and recommend the changes to be introduced. According to

the recommendations to revised rates were incorporated and effected from 1948.

The re-organization of the railways was a necessity because of partition and

integration of several princely states with the Union of India. The re-organization of

all these lines to form a smaller number of efficient units was thus imperative to

bring order in the railway system in the country. The first re-grouped railway to be

formed was the Southern Railway on April 14, 1951, comprising the Madras and

Southern Marahatta Railway, the South Indian Railway and the Mysore Railway with

headquarter at Madras. The Central Railway and Western Railway were formed on

November 6, 1951 with the headquarters at Bombay.

1. First Five year Plan and Indian Rail: The time of Independence the

railways were under severe pressure and, therefore the First Plan was devoted

mainly to the rehabilitation and modernization of rolling stock and of fixed assets.

Generally 1640 Locomotives, 5120 passenger bogies and 25000 wagons were in

condition to replace. So, railway had spent Rs. 424 crore on railway development. In

53

the period of first five year plan 1304 k.m. new railway lines were constructed and

370 k.m. existed railway lines were transferred to double lines. With this 370 k.m.

railway lines were electrified in this plan. First five year plan period registered the

production of 4758 passenger bogies, 61251 wagons and 1566 locomotives. On

account of the heavy replacement demands, the need for expansion could not be

fully met in the First Plan.

2. Second Five year plan: The second plan also had to make a substantial

provision for the rehabilitation of aged assets. The Rs. 1043.69 crore has spent on

various programmes of railway development. In this investment railway has invested

Rs. 465 crore as own capital. The emphasis in this plan, however, shifted to the

programmes required to augment line capacity on different sections of the railway

and to the procurement of additional rolling stock to the growing demand for railway

transport arising from the increased production in the agricultural and industrial

sectors of the economy. In second plan period 11311 k.m new railway lines were

constructed, 512 k.m. old single railway lines are transferred in the double lines.

Apart from that, 361.5 k.m. railway lines were electrified, 7728 passenger bogies,

97956 wagons and 2216 locomotives were produced within the plan period.

3. Third five year plan: Third plan was formed for the objective of fulfill the

need of 245 million tonnes goods transport and 15% increased passenger transport

in the second five year plan. It was also recognized that in view of the difficulties of

coping with anticipated increase in traffic with steam traction in the regions where

the coal-fields and the new steel plants are situated, electrification and dieselization

had become an operational necessity. So, in this plan period Rs. 1685.8 crore had

spent. In this investment railways own capital was Rs. 541 crore. The new 1801 k.m.

railway lines were constructed, 3228 k.m. railway lines were converted into the

double lines, 1746 k.m. railway lines get electrification, 8089 passenger bogies and

1864 locomotives were originated in this plan period. Apart from this, the expansion

of yard, modernization of signaling system took place. Railway got the Rs. 733.6

crore incomes at the end of third plan.

4. Three annual plan periods: Fourth five year plan was not started due to

various economic and political reasons. So in the place of five year plan in the year

1966 to 1969 three annual plans has been implemented. In the first year of this plan

54

52 k.m. new railway lines has been constructed and 776 k.m. old single lines were

converted into the double line. In these three year 404 k.m. railway lines were

converted into the electrification, 1269 passenger bogies, 21207 wagons and 1294

locomotives were manufactured. In the year 1967-68 and 1968-69 Rs. 182.25 crore

and Rs. 172 crore has been spent respectively for rail development.

5. Fourth five year plan: Railway development plans were very helpful for

the increase in the railway transport in the fourth plan. In this plan the focus has

been given on the increase in the efficiency of the means and system of railway

transport and reduces the transportation cost. To modernize the railway equipment

and practices within the limits of the funds available and to convert 1676 km. of

meter gauge to broad gauge in areas of rapid economic development and high

traffic potential. The total expenditure on railway development was Rs. 1000 crore

and in this expenditure Rs. 525 crore was the railway depreciation fund, but total

expenditure made Rs. 1410 crore. The expenditure on rolling stock, track renewals

and line capacity works constituted about 70% of the expenditure on railway

development.

6. Fifth Five year plan: Fifth plan was targeted to spend Rs. 2202 crore on

the railway development. Out of this two third portion spent on the rolling stock,

renovation of railways and increase in the efficiency of line capacity works. The fifth

plan recognized the important role that railways had to perform in developing the

transportation systems in the economy. An objective of fifth plan was to electrify the

1800 k.m. of rail tracks, to manufacture the 1300 Engines, 6500 passenger bogies

and 100000 wagons. The total transport turnover expected to 260 million tonnes

upto the 1978-79, but it is reached upto 240 million tonnes.

7. Sixth Five year plan: The sixth plan kept an outlay of Rs. 5100 crore for

railways of which Rs. 2100 crore was to be for rolling stock and Rs. 500 crore for

track renewals. The actual expenditure in the Sixth plan was around Rs. 6573 crore.

The objectives of the Sixth plan were to develop 70 km new railway lines, renewals

of 9600 km railway lines, double lines of 600 km etc. In the year 1984-85, increase

in the passenger and goods transport was 11% and 17% respectively.

8. Seventh Five year plan: The plans and programmes of the seventh five

year plan were decided in respect of to face the challenges of the 21st century. The

55

basic objective of this plan was to increase the 8 % growth rate of transport sector.

So, 12.8% outlay was constituted for the transportation sector. The railways

recorded an excellent performance during the Seventh plan in terms of additional

transport effort, rehabilitation of the system, financial performance, better

productivity, technological upgradation, modernization and industrial relations. The

provision of budget of Rs. 12334.30 crore was made for to fulfill all these objectives.

9. Eighth Five year plan: The main objectives of this plan were, to increase

the passenger transport by 5% and to increase in the goods transport upto 4432

million tonnes. The main thrusts are in this plan was, rehabilitation, modernization,

energy conservation, develop the transport capacity, to produce the profit making

centers, improvement in the relationship between railway management and workers.

At the end of the year 1992-93, the 1350 k.m. of the railway lines were converted

into the broad-gauge. An effort of privatization was taken for to improve the

infrastructure of rail transport.

10. Ninth Five year plan: This plan was implemented between the periods of

1997 to 2002. The main objective of railway in this plan was to improve the capacity

of long distance passenger and freight transport. To this end, the railways are

concentrating on electrification of dense corridors, improvement in operations,

optimal assets utilization, increasing container facility and raising manpower

productivity. The railway had set a target of 525 million tonnes of freight traffic to be

achieved during the period of ninth plan.

10. Tenth Five year plan: From last nine five year plans, railway has given the

stress on the electrification of railway lines, manufacturing of railway engines,

wagons and passenger bogies, conversion of meter gauge to broad gauge, increase

in the volume of transport etc. Some of the very important issues and business it

has lost over past few decades. With this purpose in view, the thrust was on

modernization and technological upgradation of the railway system. It was also

decided to make Indian Railways more user-friendly and market-savvy organization.

11. Eleventh Five year plan: The structure of eleventh plan has made with

considering the increased pressure on railway infrastructure, centralization and low

speed of passenger and freight transport. The objectives of for the railway during

the eleventh plan was, to enhance the capacity, technological upgradation, higher

56

maintenance standards, security and improve the transport facilities. Eleventh five

year plan was made provision for the railway development of Rs. 1, 94,263 crore as

the prices of 2006-07, which was 23% of budget.

The progress of Indian Railway is shown in the table no, 2.1

Table No. 2.1 Progress of Indian Railway during Planning Period (Ways and Income)

Sr. No

Particulars 1950-51

1960-61

1970-71

1980-81

1990-91

2000-01

2006-07

2007-08

2008 -09

2009-10

2010-11

1

Length of Rail ways Electrified Total

0.4 53.6

0.8 56.2

3.74 59.8

5.4 61.2

10.0 62.4

14.9 63.0

17.8 63.3

18.3 63.3

18.6 64.0

18.9 64.0

19.6 64.4

2

Million Tonne Revenue Receipts Total Transport

73.2 93.0

119.8 156.2

167.9 196.5

195.9 220.0

318.4 341.4

473.5 504.2

727.8 744.6

793.9 804.1

833.4 836.6

887.8 892.2

921.7 926.4

3

Fright Transport (Billion Tonne K.M.) Revenue Receipts Total Transport

37.6 44.1

72.3 87.7

110.7 127.4

147.7 158.5

235.8 242.7

312.4 315.5

481.0 483.4

521.4 523.2

551.4 552.0

600.6 601.3

625.7 626.5

4

Revenue from Freight Transport (Rs. Crore)

139.3

280.5

600.7

1550.9

8247.0

23045.4

41073.2

46425.5

51749.3

56937.3

60687.1

5

Average Freight Transport (K.M.)

470

561

648

720

711

626

649

651

660

674

676

6 Average rage per K.M. (Paise)

3.2

3.9

5.4

10.5

35.0

73.8

85.4

89.0

93.8

94.8

97.0

7 Passenger Transport (Million)

1284.0 1594.0 2431.0 3613.0 3858.0 4833.0 6219.0 6524.0 6920.4 7245.8 7651.1

8 Passenger K.M. (Billion)

66.5

77.7

118.1

208.6

295.6

457.0

695.0

770.0

838.0

903.5

978.5

9

Receipts from passenger Transport

98.2

131.6

295.5

827.5

3144.7

10515.1

17224.6

19844.2

21931.32

23488.2

25792.6

10

Average rater per passenger K.M. (Paise)

1.5

1.7

2.5

4.0

10.6

22.9

24.7

25.7

26.1

25.9

26.3

57

Table No- 2.2

Progress of Indian Railway since Independence

Year

Length of Rail ways (K.M.)

Total Passenger

Transport

(Lakh)

Frieght

Transport

(Lakh Tonne)

Number of Engines

Number of

Coaches

Number of

Wagons

Electrified

Non

Electrified

Steam

Diesel

Electric

1950-51 388 53208 53596 12840 930 8120 17 72 19628 205596

1960-61 748 55499 56247 15940 1562 10312 181 131 28539 307907

1970-71 3706 56084 59790 24311 1965 9387 1169 602 35145 383660

1980-81 5345 55895 61240 36125 2200 7469 2403 1036 38333 400946

1990-91 9968 52399 62367 38576 3414 2915 3759 1743 38511 346103

2000-01 14856 48172 63028 48327 5042 54 4702 2810 42657 222193

2001-02 15994 47146 63140 50927 5222 53 4815 2871 44069 216717

2002-03 16272 46850 63122 49708 5187 52 4699 2930 44756 214760

2003-04 17503 45718 63221 51123 5573 45 4769 3003 44119 228170

2004-05 17800 45580 63380 62200 7500 45 4820 3290 51000 208000

2009-10 18927 45047 63974 -- -- 42 5022 3825 51038 219931

Source: 1. Year book, 2009-10, Indian Railway,

2. India’s, A Reference Annual, 2005, page- 675

58

Problems of Indian Rail Transport:

Since independence railway transport have been developed rapidly. This mode

of transportation is playing a crucial role in the development of Indian economy. But,

since last few decades Indian Railway facing the different kinds of problems and

these problems are major obstacles in rail development. The main problems and

issues in railway development can be discussed with the following points.

1. Declining Market Share: In the year 2009 Indian Railway Ministry have

released a white paper. As per this paper, market share of rail transport has reduced

rapidly from 89% in 1950-51 to 30% in 2007-08. At the same period the road

transport has gaining a lot with its share increased from 11% in 1950-51 to 30% in

2007-08. However the railways have maintained their traditional dominance in the

carriage of bulk commodities. (For example, 66% in case of coal in 2007-08, 66% in

iron ore, 75% in fertilizers and 45% in cement.) In this context, an important

observation made by the white paper is that 88% of the railway freight traffic is

accounted for by eight bulk commodities with the share of non-bulk commodities

being only 12% of the total traffic. Railways are facing road competition on long

distance routes particularly where break-of gauge transshipment poses a problem.

2. Capacity Requirements: The capacity assessment of the system

necessarily has to contend with certain inherent characteristics of the railways as a

mode of transport. Common physical assets are created to provide different types of

transport services like freight and passenger movement and any change in the mix

alters the output of the system. Over the period 1950-51 to 2007-08, route-

kilometers has increased by just 18% and track-kilometers by 11% while freight and

passenger output has gone up by more than 12 and 11 times respectively. A

considerable portion of the railway asset is location specific and cannot be adjusted

to the changes in the demand for services. When comparing investments for

augmenting capacity either in Railways or road services, it should be borne in mind

that the Railways, as a common carrier cannot refuse any particular commodity,

whereas individual truck owners can pick and choose, while places the railways in

disadvantageous position. If, therefore, traffic increases and rail facilities remain

inadequate, the high rated commodities, which are more susceptible to diversion,

will go to the roads and this will weaken the financial position of the railways.

59

3. Cross –subsidisation: Freight earnings today account for over 66% of the

total traffic earning of Indian Railways. Freight traffic on Indian railways is among the

highest in the world. One of the main reasons for this is that passenger fares are

very low in India as compared with most of the foreign railways with the result that

there are substantial losses in passenger operations (the loss on coaching

operations was as high as Rs. 13,958 crore in 2008-09). High freight rates cross-

subsidies the low passenger fares. This makes the fare-freight ratio of Indian railway

one of the lowest in the world.

4. Energy Conservation: The railways are a major user of liquid fuels and

must contribute to energy conservation. Due to paucity of fund energy inefficient

obsolete steam engines and rolling stocks are yet to be replaced.

5. Technology Up-gradation: The incidence of ‘on-line-failures’ of fleet and

equipment is fairly high. Such failure in crowded traffic corridor brings a quasi-

paralysis of the corridor. The maintenance of infrastructure is still inadequate in

relation to the rolling stock. The rolling stock designs are outdated and maintenance

practices in several areas are based on obsolete technology. The existing

technology of both electric and diesel locomotives are considerably old. There is a

need for introduction of higher horsepower electric and diesel locomotives, which

are also more fuel-efficient. The percentage of ineffective rolling stock far exceeds

prescribed level. The railways have to suffer because of its un-remunerative branch

lines for public service obligations.

6. Planning of Manpower: The manpower cost in the working expenses of

the railways form a sizable portion due to absence of substantial efforts for

technological up-gradation of operational system of the railways. The system is

beset with excess manpower and manpower development has not kept pace with

technology up-gradation.

7. Problem of Capital: Before 1924, Railway finances formed part of the

Central Government finances. But from 1924, the Railway finances were separated

from the general finances of the Central Government. The general tax-payer was

given the status of a shareholder in the Railway, but in practice, the Central

Government was the sole share-holder of the Indian Railway. The relation between

the Central Government and the Railways and the finances of the Railways in

60

particular is determined by Parliamentary Railway Convention Committee. As on

April 1, 2009 the balance funds required to complete the projects was as high Rs.

79,462 crore. Given the fact that the average annual plan expenditure under these

categories of projects in the last two years was about Rs. 9000 crore, at the current

rate about 9 years will be required to complete the projects on hand. According to

the white paper the above are rough abstract estimates and the actual funds

required could be much more. The railways ability to generate its own resources for

growth and replacement has not shown any improvement. In fact, rate of return on

the capital investment has been low in Indian railways.

8. Traction Policy: Steam traction is inefficient, both from the point of view of

operation and energy and energy consumption. Most of the steam locomotives are

now relegated to inferior services and are, thus, a drag on the system. Due to non-

availability of electric traction in many important railways sections lead to delay in

movement of traffic. The shortage of capacities in railways and very high traffic

density on major routes are also responsible for creating problems of railways to

increase the flow of goods and passenger traffic.

9. Problem of Ticketless Journey: Ticketless travelling is one of the major

problems in railway transport as compared to other modes of transport. Now a day

railway administration has using the different kinds of actions regarding the

ticketless passengers. But, as the social responsibility railway have to accept this

kind of problem. So, railway transport is facing the problem of loss.

10. Increase in the problem of accidents and attacks: In India the ratio of

railway accidents is higher than other countries. There are various reasons for rail

accidents i.e. technological backwardness, attacks from terrorists, manmade

mistakes and natural calamities etc. From the last one decade the deaths and

injured passenger due to accidents are shown in the table no. 2.3

M.A. II- Economics- Economics Transport and Communication

61

Table No. 2.3

Railway Accidents due to various reasons

Year

Death and Injured Passengers and Servants

Passengers Other People Rail Servants Total

Injured Deaths Injured Deaths Injured Deaths Injured Deaths

2001-02 192 921 1232 1520 114 1421 1538 3862

2002-03 251 951 1443 1844 143 1181 1837 3976

2003-04 138 599 2748 2217 77 1017 2963 3833

2004-05 118 360 2023 2984 85 841 2226 4185

2005-06 346 688 3265 3438 109 341 3720 4467

2006-07 204 665 3882 4024 109 386 4195 5075

2007-08 134 667 4102 4387 113 335 4349 5389

2008-09 200 651 4575 4721 77 324 4853 5696

Source: Ministry of Railway (Railway Board)

1. Problem of Energy: At the beginning railway transport was dependent on

the steam. But, due to increase in the scope of railway transport it become

necessary to use the diesel and electricity for the fuel. The coal is also using by the

railway for the fuel but coal is natural asset and it is not available on permanent

basis because it is non renewable resource. To improve efficiency and speed of the

railway transport the electricity is needed in the future. So it is necessary to the

railway to optimum use the resources and planning and conservation of resources.

2. Lack of Modern Management: There is a lack of modern management

as railway failed to attract adequate incentives and suitable talent. In addition to it, it

could not make economic analysis for perspective planning tariff.

3. No Balanced Approach: Another problem, perhaps, is that there is lack of

balance between the two conflicting objectives of earning substantial revenues and

62

social responsibilities. This is due to the fact that the railways are forced to operate

on unremunerative lines, resulting heavy losses on suburban and other traffic.

2.2.4 Structure of Passenger and Goods Transport and Fare Rates in

Railway:

Railway have to take into consideration different types of factors while

determining the passenger and goods fare rates. Traditionally, railway rates in India

have been determined on the basis of two considerations, i.e., value of service and

cost of service. The application of these principles results in a differential structure of

rates. Thus, railways have to adjust the rates suitably in the interest of the business

so as to distribute the burden of their overheads of joint costs over various

commodities. In regard to bulk commodities, which carry comparatively small value

in relation to their weight, as a commercial undertakings, the railways have so far

found it sufficient to meet their out-of-pocket expenses with overheads or joint costs

being partially left un-recovered, especially in respect of long distance traffic. The

greater part of the overhead or the joint cost of the railways fall over the other

commodities, which are generally high priced and can bear high charges.

Railway administration taking into consideration the two factors i.e. price of

service and remuneration of service while determination of fare rates. Different kinds

of the commodities are available for the transport and it is highly impossible to

charge different prices. So railway has to differentiate and classify the commodities

with different categories. Railway displayed the fare rates with category for the

information to customers. Passengers are divided themselves with different

categories and railway administration divided the commodities with different

categories. Railway is the public utility, so it is necessary to determine the fare rates

with optimum size. Because high fare rates are directly affecting the price level. The

classification of goods is depending on the following factors:

1. Size of Commodity: The size of commodity is large and bulk it will charge

low rates, because in this situation all the responsibility is of the customer. Vice

versa the commodities are small in size and less, in this situation railway have to

take responsibility to handle. Apart from that, there is number of functions regarding

the transaction of commodities railway has to do. (i.e. registration of commodity, risk

of transport etc.)

63

2. Weight of Commodity: Weight of commodity is the one more important

factor for the determining the fare rates. Some goods are large in size but low

weighted, it required the large area of wagon. In this situation railway cannot use the

optimum level of wagons capacity. E.g. one wagon of railway can travel 22 tonnes of

steel but the same wagon travel only 5 tonnes of the cotton. So low weighted

commodities are classified under the high prices category because the cost of travel

is high.

3. Non perishable and inflammable goods: Some goods are non

perishable and highly inflammable, there is a possibility to loss in the transport. So,

these commodities are classified into the high cost category. For example, glass

wares, petrol, diesel, kerosene, different chemicals etc. If these goods are damaged

or fired railway administration have to pay the full cost of these commodities. So,

railway charges the high fare rates for this kind of commodities.

4. Packaging of Commodity: If the commodities are packed properly it will

require less area of wagon and it is easy to travel. But some goods are not packed

properly it requires large space and problematic to transport. So, railway classified

the loose goods in the high fare rates. Valuable goods are also included in high fare

category.

5. Types of Wagon: Railway is providing the different types of wagons. For

example, packed wagon, open wagon, refrigerated wagon etc. For the packed

wagon the capital investment and cost also is high. Cloth, foodgrain, sugar,

machanaries, fuel, chemical etc require the packed wagons. So those commodities

classified into the high fare category. Coal, stones, wood etc are not required the

close and refrigerated wagons, so this kind of commodities are classified into the

low fare rates category. Milk, Fish, Mutton, flowers etc required the refrigerated

wagons, the cost of refrigeration is high, so these commodities are classified into the

high fare category.

6. Nature of Commodity: Three kinds of commodities are available for the

transport. i.e. final goods, mediate goods and raw material. Finished goods are

easy to transport, but non finished goods are inconvenient to travel. So non finished

goods are classified into the high fare category. Raw material classified into the low

fare rate category.

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7. Consistency in transport: There are two kinds of customer i.e. regular

and irregular. Regular customers vail the commodities regularly. In this situation

railway transport can optimum utilize the rolling stock and cost of transport would be

low. So railway administration classified these commodities into the low fare rate

category. And irregular commodities are included in the high fare rate category.

8. Intrinsic Value of the commodity: Every commodity have internal and

face value. Which commodity have high internal value, those are classified into the

high fare rate category. Which commodities having the low internal value those

classified into the low fare rates category.

10. Competition among the transportation modes: Railway, Motor, Ship

and Air transport having the cut throat competition. Short distance and low weighted

goods there is competition between railway and motor transport. So, in this situation

railway have to charge low rates. If railway are not reduced the fare rates it will face

the problem of loss.

Railway’s fare policy is generally based on “what the traffic can bear”. The

transport cost should not be more than the production cost of an article. The

transport cost must be reasonable enough, so that the produced goods can be

distributed in a widely spread market. Railways shoulder responsibility of keeping

the price of essential commodities at a reasonable rate, be it a liquid or a solid

goods, for the benefit of both consumers and producers.

Recommendations of the Railway Freight Structure Enquiry Committee, 1955:

The Railway Freight structure Committee was constituted under the

chairmanship of Dr. A Ramswamy Mudaliar. To review the existing freight structure

for transport by goods train in all its aspect in the light of the development of

economy. The major recommendations of the committee are as follows:

1. A regular and progressive increase through a percentage system from the

lowest class to the highest class from an integrated scale of rates covering both

class rates and wagonload scales. For this purpose they recommended a norm

rate called class 100 rates.

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2. All commodities are classified as wagonload and small. However for some

commodities for which separate smells and wagonload classification has no

significance there the rate would apply on any quantity basis.

3. There should be relativity between the rates for wagonloads and smalls and

allowed an increase in the rates for smalls as compared with wagonloads to the

extent of some 15 to 36 percent.

4. The loading and un-loading in respect of wagonloads should be done by

consignors and consignee only. The terminal charges as such should be

abolished. But this fact should be taken into consideration in evolving the revised

freight structure.

5. The additional short distance is not justified and that it may be abolished.

6. Railway should apply through the destination, irrespective of break of gauge

both in the case of general merchandise and livestock.

7. Practically for all commodities rates should be quoted at railway’s risk barring a

few commodities to be carried at owner’s risk. The owner’s risk rates for these

commodities should be at a level one class below the corresponding percentage

class rate.

In June, 1955, the Ministry of Railways appointed the Railway Freight Structure

Enquiry Committee to review the then existing railway freight structure and to

suggest, among other things, modifications bearing in mind the needs of the

developing economy and the necessity for maintaining the financial stability of the

Railways.

Based on the recommendations of this Committee, a revised freight structure

was introduced in 1958. Over the years, there were changes in the freight structure

with a view to raising additional revenues for meeting the escalation in costs.

Similarly, there were changes in the passenger fares and parcel structures. The

Public Accounts Committee as well as the Railway Convention Committee had

examined the tariffs and had emphasized the need for rationalizing the fare and

freight structure having due regard to cost of service. Accordingly, a high powered

Committee, viz. Rail Tariff Enquiry Committee was set up in 1977. It submitted its

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report in 1980. The Committee had not only examined the passenger fares, parcels

freight structure and other allied matters.

The existing Goods/Passenger and Parcels freight structures, by and large are

based on the recommendations of this Committee.

Traffic Costing: The Freight Structure Enquiry Committee (1955-57) had made

a general observation that a time had come when the Indian Railways must make a

sustained effort to ascertain, as far as possible, the direct cost of service, and take

note of this in determining the appropriate rates for individual commodities. The

Railways have given a great deal of attention to traffic costing over the last few

years in order that it may be used as an effective aid to management mainly In the

matter of adjustment in freight structure and for the purpose of financial appraisal of

projects. Costing of rail transport is not strictly comparable to the costing of

commodities of other services. Rail transport presents many special features which

are not present in the case of other commodities and products. For example,

transport services are offered at hundreds of stations all over the country and

decisions have to be taken on an all-India basis whereas other industries, including

road operations, operate only in a limited area with the sole object of maximising

profits. There are again a vast number of services produced by the Railways like

goods transport of various commodities, carriage of passengers of different classes,

luggage, parcels, Rail way MaiI traffic, etc. Further, transportation is a “perishable"

commodity in that it cannot be stored. If the wagons are not utilised for loading, they

remain idle and the transport capacity during that period is lost forever. Similarly, if

seats on a passenger train are not occupied, the corresponding earning capacity is

lost forever. Another peculiarity of rail operations is that it is highly Capital intensive

and its assets have to be created for a long span of life of (say) 40 to 60 years.

There is also the problem of providing suitable manpower In the face of fluctuating

demands for rail transport depending on seasonal requirements.

While an effort must be made to arrive at the cost of service for different

operations as accurately as possible, it should be realised that there are no set

formulae for costing. Costing is not an exact science, but traffic costing can be an

effective aid to management if the technique is soundly based on valid principles

and proper identification and collection of appropriate data. It should also be

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possible to make necessary adjustment as required to reflect changing conditions to

suit the particular type of problem. In fact, cost study requires a sound knowledge

and basic understanding of all facets of railway working.

Analysis of transport costs is a complex problem since railways are essentially

a 'Joint Cost Industry'. In fact there are more items of expenditure which are 'joint,

costs' than those which can be directly allocated to individual services such as

coaching and goods operation. For example, provision and maintenance of railway

track salaries of station staff, maintenance of signaling and telecommunication

installations are all joint expenses. Where possible, of course, the expenses are

debited direct and in full to coaching service, or goods service but in the case of joint

costs, a suitable basis has to be evolved for apportionment and also for further

allocation to the sub-divisions concerned in each service, like marshalling,

transshipment, etc., for goods services.

Computation of costs for individual streams of traffic is necessary to determine

whether or not a particular category of traffic is remunerative and to examine the

feasibility of quotation of special rates to combat inter-modal competition or to move

additional traffic in lighter sections or in empty movement direction, etc. Costing is

also essential for making realistic financial appraisal to aid fresh investment

decisions whether in respect of new construction projects or major schemes such as

change of traction.

A beginning in traffic costing on Indian Railways was made in the early 60's

with the setting up of traffic costing cell in the Board's office. Similar cells in the

zonal railways came up much later, in 1972-73.

General Principles of Railway Rating Policy: Indian Railways carry a

heterogeneous variety of goods; raw materials, finished products, perishables,

goods in bulk and in bags, liquids, articles of high and low value, fragile and

dangerous goods, building materials of all kinds, medicines, chemicals and drugs,

clothing, footwear and essential foodstuffs; and in fact every article and

commodity that, either directly or remotely, enters into the daily existence of

the average person. To fix the charges for the transportation of these diverse

varieties of goods, over different distances and under varying conditions, is clearly

a matter of great complexity and cannot obviously be reduced to an exact

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scheme. There are, however, several broad principles which determine not only

the method of charging but also the general level of rates for the various

commodities, an understanding of which is indispensable to a study of the Goods

Rates Structure of the Indian Railways.

One such principle is commonly referred to as charging "what the traffic will

bear", i. e. fixing the charge for each variety of goods according to its ability to pay

for transportation. This is also called the 'value of service' principle. In this way,

goods of high value are made to pay more, so that commodities and articles of low

value, including foodstuffs and industrial raw products, may be carried at lower

rates. This is eminently equitable and it is from this principle of charging "what

the traffic will bear" that the Railways derive sanction for the practice of classifying

commodities into different groups, within each of which a sufficient degree of affinity

of transportation and economic characteristics can be found to justify the

application, to each group, of a different scale of basic rates.

Another basic principle of rating which is receiving increasingly greater

attention is that of the 'Cost of Service'. Thus, caking the two principles together,

each variety of goods should be charged no more than it can ordinarily afford to pay

for transportation and, by and large, no less than it costs to move it. For applying

this criterion, duo cognizance has to be taken of the factors affecting the ability of

commodity to pay for transport viz. - (a) value in relation to weight, (b) uses, (c)

stage of manufacture, (d) volume of traffic, and also the factors affecting the

costs of transportation viz. (i) bulk in proportion to weight, (ii) risk of damage,

wastage, or deterioration in transit, (iii) speed of transit, and ; (iv) volume of traffic.

As stated earlier, Government had laid down as early as 1883 that the 'value of

service' was to provide the ceiling and the 'cost of service' the floor in determining

the railway rates. With the growth of road transport and its competitive

characteristics, the point of substitution of one mode of transport by another, would

constitute the effective ceiling on the 'value of service' based rates. The second

limitation to the application of the aforesaid twin principle is the legal prohibition

against undue preference and undue prejudice.

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Theories of Railway Fare Rates:

The prices of the commodities in the competitive market are determined as per

the demand and supply theories. In this price determination marginal utility is

affected on demand for commodity and marginal production cost is affected on

supply side. In the competitive market the prices are determined where the marginal

utility and marginal production cost are equal. Railway fare rates are also depending

on these theories. So, production cost and the utility are the two important factors

have taken into consideration while price determination. It is necessary that the rail

fare rate policy should be supplementary to the government taxation and tariff

policy. There are different theories of railway fare rates, some of them are as

follows:

A) Cost of Service Principle:

The cost of service is depending of various factors. Railway administration has

taken into consideration the service cost while determine the fare rates of passenger

and goods. Factors affecting cost of service are as follows:

1. Size of Consignment: Railway has spent the different types of cost for

the transportation. Sometime the cost of service is the constant. Suppose there are

40 wagons are attached to the train and from these only 30 wagons have fully

loaded and 10 are empty. But in these 30 wagons different kinds of material and

goods have loaded, so it is also required the different charges. But It is not possible

to the railway to charge same rate for all the goods. And the 10 wagons are empty

but cost is requiring for the travel these 10 wagons, there is no saving in the cost.

This kind of situation may be happen regarding the passenger transport also. If the

capacity of one bogie is 120 passengers and there is only 100 passengers are

available. In this situation the cost of service is same, and the revenue of railway will

be less. Vice versa if the railway having full load of goods or passenger the revenue

will increase. In brief, the revenue of railway is depending on the availability of

goods and passengers.

2. Packaging of Goods: Transportation cost is depending on the packaging

of the goods. If the proper packaged goods are available for the transport the space

is required less and handling of the goods is also easy. So the cost of transportation

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of small goods which weight is 1 tonne will high rather than transportation of 1 tonne

coal.

3. Speed of Train: The transportation cost is also affected by the speed of

the train. Superfast train required the modern and efficient engine and also the

trained driver. It required the high price. So the fare rates of transportation of

superfast train are high and general trains fare rates are less.

4. Distance: The fare rates are reducing with the increasing distance. In the

long distance rail transport can utilize the maximum capacity of the rolling stocks.

5. Nature of Commodity: Transportation cost is also depending on the

nature of the commodity. Liquid, inflammable, non perishable and glass material

require the more security. For the non perishable goods refrigeration facility is

required. It increases the transportation cost, so the fare rates are also high.

6. Capital Expenditure: To manufacture the passenger bogies and freight

wagons the huge capital investment is necessary. From the open wagon coal, wood,

steel can transport, so it will charge low rates. Foodgrain, Sugar, Machinery,

Flowers, other consumable items are required the closed wagons, so it will charge

with high rates. AC I class, two tier bogies have high capital investment, so

passengers who are travelling through these bogies charged high fare rates.

7. Consistency in journey: Transportation cost is also affected by

consistency in journey. If railway transport is getting continuous freight or passenger

for the transportation, so railway can fully utilize their rolling stock and reduced the

transportation cost. So regular passenger and freight can charged with low fare rate.

B) Value of Service Principle: The fare rates in this principle are determined

with taking into consideration the utility of transportation. Elasticity of demand of

transport is also very important factor which affected on the determination the fare

rates. Because the utility of precious goods or high prices goods is high so the fare

rates also are high. Vice versa the low valuable goods having the less utility so the

fare rates are low. While fare rates are determined by the rail administration it is

necessary to consider the bearing capacity of the good also.

C) Discriminate Principle: While price determination in railway it is very

difficult to calculate the utility of the commodity. So, in this situation discriminating

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principle should be taken into consideration. The implementation of this principle is

of monopoly in nature. There are number of factors that are affecting the fare rates

of rail transport, these are as follows:

1. Locational Discrimination

2. Discrimination in value

3. Personal discrimination

4. Class discrimination

A) Flat or Equal Mileage Rate Principle: Fare rates are charged from this

principle by the distance of journey. In respect of passenger the kilometer and in

respect of freight total weight in quintal is considered.

B) Tapering Charge or Telescopic Rate Principle: The telescopic fare rates

has implemented in the Indian railway in 1955. This type of fare rates is very much

helpful for the inspiration of long distance journey.

C) Principle of Zonal Charging: This kind of fare rate determination is

depending on the postal fare rate. This principle is inspired to the long distance

journey. Postal services are of monopoly in the nature, so it is possible to them. But,

Railway transport has competed to other means of transportation. If this principle is

applied by the railway, it will adversely affect on the transport.

2.2.5 Regulation, Administration and Control of Rail Transport:

The origin of Indian Rail Transport is from 16th April, 1953 in real terms. From

1980 to 1907 the construction and regulation of rail transport was held on the

railway companies and Indian government. The private sector has productive

railway and government having the unproductive railway in that period. So,

government was facing the continuous loss. But the ultimate burden of this loss on

the public. Government has established the Railway Board in the year 1905.

Government has purchased all the railway lines upto 1907 which are constructed by

the private companies. In this period the most of the companies were working as the

Managing Agency. At the beginning of the First World War the total railway lines

were 35,285 miles. Due to the war situation there were number of obstacles in the

development of rail transport.

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Government has appointed Acworth Committee for recommendation for railway

development in the year 1920. The recommendation of Acworth committee has very

much importance in the history railway. To reforms in functioning of railway, Rates

Tribunal for determination of railway fare rates, Separation of railway finance from

the public finance, Abolition of dual control from government and companies and

only government control is essential, The establishment of local and central level

advisory body, The establishment of depreciation and reserve fund etc are the most

important recommendations of the Acworth committee. All recommendations of this

committee have accepted by the government.

From the year 1923 the policy of nationalization has been accepted partially.

The limit of agreement with the East Indian Railway and Great Indian Peninsula

Railway has completed in the year 1924 and 1925 respectively. So government has

taken the decision to take the charge of railway lines of these two companies under

the public sector. From 1924 the railway budget is presenting separately.

Indian railway has suffered a lot due to 1929 Great Depression. Railway faced

a huge loss. To fulfill this loss railway has to withdraw some amount from the

reserve fund. So government has appointed the Pope Committee in 1932, for the

recommendations regarding the control of the railway expenditure. Wedgewood

Committee has been appointed by the government in the year 1936 for study the

economic condition of the Indian Railway. The important recommendation of this

committee are, To establish the Central Saving Research Committee, Distribution

of Indian Railway within Eight sections, The contribution of Indian Railway in the

Public Budget should be stopped, The surplus revenue of the railway should be

spent for to provide the better services to the passengers, Reduce the competition

with the road transport etc. Some recommendations of this committee have been

accepted by the government.

Government has continuously run the programme of nationalization of railway,

so the length of railway lines was increased rapidly at the beginning of the Second

World War. Due to war situation the progress of railway lagged behind. The

modernization of railway programme was also collapsed. Government has

established the War Transport Board in the year 1942. As per the order of this board

railway has given priority to provide the service to the defense purpose. After

M.A. II- Economics- Economics Transport and Communication

73

division of India and Pakistan government has appointed the Kunzroo Committee in

the year 1949. This committee has recommended that regrouping railway lines

proposal should be stopped. But government has not accepted this

recommendation. As per the regrouping proposal the 37 rail systems has clubbed

under the six sections. Then after these sections expanded and the new eight

sections are established. Now a day there are 9 sections are working in the India. In

this way Government has played always an important role in the development of

Indian Rail Transport.

Railway Administration and Control:

The important characteristic feature of the management of the Indian Railway is

that there is a central controlling authority, co-coordinating the functions of various

zonal railways and ensuring planned development of the railway system and takes

into account the actual needs of the people of India. The Railways function as a

department of the Government in the Ministry of Railways and the Railway Board

functions as its secretariat and also as the top-executive and policy making body.

The administrative machinery on the Railways functions at three levels such as-

a) Railway Board

b) General Manager

c) Divisional Railway Manager

Railway Board:

The system of Railway administration and control is very strong. It is the apex

administrative and executive body, which assists the Railway Ministry in the day-

today control and operation. The Chairman of the Board is the ex-officio Principal

Secretary in the Ministry of Railways. Four other members, who remain in charge of

traffic, civil engineering, mechanical engineering and staff, assist him. These

members are ex-officio Secretaries to the government of India.

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Functions of Railway Board:

The functions of railway board are as follows:

1. To function as the Ministry of the Railways to assist the Railway Minister in the

discharge of his responsibilities and to co-ordinate with the other ministers or

departments of Government.

2. To formulate policies and to watch their implementation.

3. To plan a co-ordinate development of the Railways in accordance with the

expanding needs and to watch its execution.

4. To frame the capital and Revenue budget of the Railways for sanction of the

parliament.

5. To allocate the budgetary grants between the different units of administration

on the basis of a system of performance budgeting.

6. To review periodically the trend of expenditure in relation to the performance

and to initiate measures for appropriate regulation of expenditure.

7. To maintain a watch on the operational performance and to co-ordinate the

activities to the extent individual units are unable to do so.

8. To take steps to ensure that the work in the various railway workshops

proceeds on a co-ordinate and rationalized pattern.

9. To frame various codes, including the detailed rules for compilation of the

statistical data which may be comparable from year to year and to lay down

procedures for assessment of the financial justification or economic analysis of

development works.

10. To formulate the pay and allowance structure to staff with a view to ensuring a

degree of uniformity on the Railways.

2.2.6: Railway Budget: 2012-13:

Union Railway Minister Dinesh Trivedi presented the first Railway Budget in

Parliament on Wednesday on 14th March. He has recommended the increase in the

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fare rates of railway. This is the first increase in fare rate from last eight years. The

important highlights of Railway Budget are as follows:

1. Passenger fares increased marginally. The increase will be by 2 paise per km

for suburban and ordinary second class; 3 paise per km for mail/express

second class; 5 paise per km for sleeper class; 10 paise per km for AC Chair

Car, AC 3 tier and First Class; 15 paise per km for AC 2 tier and 30 paise per

km for AC I.

2. Minimum fare and platform tickets to cost Rs 5.

3. 50 per cent concession in fare in AC-2, AC-3, Chair Car and Sleeper classes to

patients suffering from 'Aplastic Anaemia' and 'Sickle Cell Anaemia'.

4. Extending the facility of travel by Rajdhani and Shatabdi trains to Arjuna

Awardees.

5. Travel distance under 'Izzat Scheme' to increase from 100 kms to 150 kms.

6. SMS on passenger mobile phone in case of e-ticket to be accepted as proof of

valid reservation.

7. Introduction of satellite based real time train information system (SIMRAN) to

provide train running information to passengers through SMS, internet, etc.

8. On board passenger displays indicating next halt station and expected arrival

time to be introduced.

10. Installation of 321 escalators at important stations of which 50 will be

commissioned in 2012-13.

11. Introduction of regional cuisine at affordable rates; launching of Book-a-meal

scheme to provide multiple choice of meals through SMS or email.

12. Introduction of coin/currency operated ticket vending machines.

13. Upgradation of 929 stations as Adarsh Stations including 84 stations proposed

in 2012-13; 490 stations have been completed so far.

14. Specially designed coaches for differently-abled persons to be provided in each

Mail/Express trains.

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15. Introduction of Rail Bandhu on-board magazines on Rajdhanis, Shatabdis and

Duronto trains.

16. Setting up of AC Executive lounges at important stations

17. 75 new Express trains to be introduced.

18. 21 new passenger services, 9 DEMU services and 8 MEMU services to be

introduced.

19. Run of 39 trains to be extended.

20. Frequency of 23 trains to be increased.

21. 75 additional services to run in Mumbai suburban; 44 new suburban services to

be introduced in Kolkata area, 50 new services to be introduced in Kolkata

Metro; 18 additional services in Chennai area.

22. 725 km new lines, 700 km doubling, 800 km gauge conversion and 1,100 km

electrification targeted in 2012-13.

23. Rs 6,872 cr provided for new lines, Rs 3,393 cr for doubling, Rs 1,950 cr for

gauge conversation, Rs 828 cr for electrification

24. Highest ever plan outlay of Rs 60,100 cr

25. Rae Bareli coach factory manufactured 10 coaches in 2011-12; phase-II of the

factory would be commissioned in 2012-13.

26. A wagon factory to be set up at Sitapali (Ganjam District of Odisha)

27. A rail coach factory with the support of Government of Kerala to be set up at

Palakkad; two additional new manufacturing units for coaches to be established

in the Kutch area in Gujarat and at Kolar in Karnataka with active participation

of the State Governments.

28. Setting up of a factory at Shyamnagar in West Bengal to manufacture next

generation technology propulsion system for use in high power electric

locomotives.

29. Creating Missions as recommended by Pitroda Committee to implement the

modernization programme.

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30. Setting up of Railway Tariff Regulatory Authority to be considered.

31. New Board Members for Safety/Research and PPP/Marketing to be inducted.

32. Rail-Road Grade Separation Corporation to be set up to eliminate level

crossings.

33. Indian Railway Station Development Corporation to be set up to redevelop

stations through PPP mode.

34. Logistics Corporation to be set up for development and management of existing

railway goods sheds and multi-modal logistics parks.

35. National High Speed Rail Authority to be set-up.

36. Pre-feasibility studies on six high speed corridors already completed; study on

Delhi-Jaipur-Ajmer-Jodhpur to be taken up in 2012-13.

37. Introduction of a ‘Green Train’ to run through the pristine forests of North

Bengal.

38. Setting up of 200 remote railway stations as ‘green energy stations’ powered

entirely by solar energy.

39. Providing solar lighting system at 1,000 manned level crossing gates.

40. 2,500 coaches to be equipped with bio toilets.

41. Setting up of 72 MW capacity windmill plants in Andhra Pradesh, Karnataka,

Kerala, Tamil Nadu and West Bengal.

42. Installation of Integrated Security System at all 202 identified stations to be

completed in 2012-13.

43. Escorting of trains by RPF/GRP extended to 3,500 trains.

44. Integration of RPF helpline with the All India Passenger Helpline.

45. Setting up of a Railway Safety Authority as a statutory regulatory body as

recommended by Kakodkar Committee

46. Three 'Safety Villages' to be set up at Bengaluru, Kharagpur and Lucknow for

skill development for disaster management.

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47. Over one lakh persons to be recruited in 2012-13 • backlog of SC/ST/OBC and

other categories to be wiped off.

48. Introduction of a wellness programme for railway staff at their work places.

49. Ensuring proper rest for skilled and technical staff including the running crew.

50. Institution of 'Rail Khel Ratna' Award for 10 rail sports-persons every year.

51. New coaching terminal at Naihati, the birth place of Rishi Bankim Chandra

Chattopadhyay commemorating him on 175th Birth Anniversary.

52. Project to connect Agartala with Akhaura in Bangladesh to be taken up in 2012-

13.

53. Freight loading of 1,025 MT targeted; 55 MT more than 2011-12

54. Passenger growth targeted at 5.4 per cent.

To fulfill the above schemes railway has made provision Rs. 6o, 100 crore. Out

of this Rs. 50,000 crore will be taken from the open market. In this budget rail

minister has given the more tress on security of transportation. In his budget speech

he said that, there is a need of to modernize the 19,000 k.m. railway lines. Basically

it is need of to connect the hilly and backward area with the railway transport and it

is required the Rs. 6467 crore. According to the Rail Minister, for achieve the

sustainable rate of development of Indian Economy, it is necessary to keep 10%

annual growth rate of Railway Transport.

2.3 Summary:

Railway transport is one of the most important and largest public sector in India.

Railway transport is mostly used for the long distance journey. This transport is not

elastic as like road transport. Railway transport provides the separate services for

the passenger and freight. Now a day the demand for railway transport is increasing

rapidly. The development of economy is also depending on the railway transport

development.

The importance of Railway in the Indian economy and also in the World is very

much. The role of Railway transport is crucial, i.e. cheap transport, Industrial

development, development of agricultural sector, reduce the distance between rural

79

area and urban area, and provide the assistance in the natural disaster, national

integrity. The Indian Railway had modest beginnings in 16th April 1853 when first

railway train journeyed a distance of 21 mails (34 K.M.) between Bombay to Thana

within 75 minutes. Government of India has taken the charge to development

Railway after 1969. Today Indian Railway is very important and having the large

network in the world.

The cost of service and the price of service principle is taking in to

consideration while determination the fare rates. Railway classified the goods for the

price determination. Passengers are divided in the different categories on their own.

Railway is itself doing this work for the goods transport. Railway transport authority

takes into consideration the different principles for the determination of fare rates

e.g. Service principle, service utility, differentiate rate, telescopic rate, regional rate

principle etc.

Railway Board has the important place in the management of railway transport.

Railway Board has been established in the year 1905. Government of India has

established the different committees for the development of Railway transport.

Those committees are, Acworth committee, Wagwood committee, Pope Committee,

Kunzroo committee etc. These committees recommended various recommendations

for the development of Indian railway. Government of India accepted the some

recommendations for the railway development. These recommendations are very

much useful for the development of Indian Railway Transport.

2.4: Self-Learning Questions:

A) Choose the correct alternative from the following and rewrite the

sentence:

1. The largest public sector enterprise in India is --------------.

A) Road B) Railway C) Hindustan Machine Tools D) None of the above

2 Ticketless Journey is problem of ------------- transport.

80

A) Air B) Water C) Railway D) Road

3 ------------- government has started the rail transport in India.

A) Hindustan B) British C) India D) None of the above

4. The First Railway started in India in ---------------.

A) 1855 B) 1853 C) 1990 D) 1893

5. There are ---------------- railway companies that has been established in India in the

period of 1854 to 1860.

A) 10 B) 9 C) 8 D) 6

6 Guarantee system was working in India upto----------------.

A) 1869 B) 1859 C) 1879 D) 1889

7 Robertson Committee has been established on--------------.

A) 1910 B) 1901 C) 1950 D) 1921

8 Acworth Committee has been established in ----------------.

A) 1920 B) 1930 C) 1940 D) 1910

9 Railway Board has been established in--------------.

A) 1901 B) 1905 C) 1915 D) 1925

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10 Railway Transport Structure Committee has been appointed under the chairmanship

of--------------.

A) Kunzuru B) Pope C) Dr. Ramswami Mudliyar D) Acworth

B) Answer in One Sentence:

1. On which way the first Rail way was started?

2. Give the two problems of Railway transport.

3. From which year the telescopic rates have been implemented?

4. On which year the passenger tax converted into the fare rates?

5. From which year Nationalisation policy of Railway being accepted?

6. Which committee has been appointed in the year 1932 for the recommendation

regarding the railway finance?

7. On which year Wagwood committee has been established?

8. On which year War Transport Board has been established?

9. Which Committee has been established for the rail development after the

division of India and Pakistan?

10. Which committee has recommended the separation of Rail Budget from the

Public Budget?

2.5 Answers of Self-Learning Questions:

A) 1 – B 2 – C

3 – B 4 – B

5 – C 6 – A

7 – B 8 – A

9 – B

10 – C

82

B) 1 – Mumbai to Thane 2 – Decreasing share of market, Technological

backwardness, Ticketless Journey

3 – 1st April, 1955 4 – 1861-62

5 – 1923 6 – Pope Committee

7 – 1936 8 – 1942

9 – Kunzuru Committee 10 – Acworth Committee

2.6 Key Words:

1. Returns: Dividend or interest from the investment of any sector.

2. Container: Means of goods transport

3. Discriminate Rate: Different fare rates as per the location, person and types etc.

2.7. Questions for Self Study:

A) Broad Answer type Questions

1. Explain the nature and scope of Railway transport.

2. State the importance of railway transport in the economy.

3. Explain the law of Returns to Scale in the railway transport.

4. Explain the progress of Railway during the planning period.

5. State the problems of Railway Transport.

6. Explain the structure of goods transport in the Railway Transport.

7. Give a detailed note on the Regulation, Administration and Control of Railway.

Transport.

B) Write Short Notes:

1. Railway Budget – 2012-13

2. Functions of Railway Board

3. Importance of Railway Transport

4. Problems of Railway Transport

83

5. Classification of goods

6. Law of Service Cost

7. Law of Differentiate Fare

2.8. Field Work:

1. Collect the information regarding service of Railway Transport and Regional

development from your area and prepare a project report.

2. Analysis the trends in Revenue and expenditure of Railway Transport since last

decade from the Railway Budget.

2.9. References for Further Readings:

1. Mishra Bimalendu and Chaudhary Prasannkumar (1998), Transport Sector in

India, Kalyani Publishers, Dudhiyana.

2. R.K. Lekhi (2004), The Economics of Developemnt and Planning, Kalyani

Publishers, Ludhiyana, 9th edition.

3. Misra & Puri (2010), Indian, Economy, Himalaya Publishing House, Mumbai,

28th revised edition.

4. R. N. Kshirsagar (1979), Transport Laws and Development, Contenental

Publications, Pune, 1st edition.

5. Dr. Ghatage L.N. & Dr. Wavare A. K (2010), Indian Economy, Nirali Prakashan,

Pune, 1st edition.

� � �

84

Unit- 3

Road Transport

Index:

3.0 Objectives

3.1 Introduction

3.2 Subject Description

3.2.1 Nature, Significance and Characteristics of Road Transport

3.2.2 Private and Public Transport System in India

3.2.3 Road Transport in India-progress and problems. National Highway

Authority of India.

3.2.4 Policy of Motor Transport, taxation city- transport in India-Nature, present

situation and problems. Rail-Road Coordination.

� Objective Questions and their answers.

3.3 Summary

3.4 Self-Learning questions

3.5 Answer of Self-Learning questions

3.6 Keywords

3.7. Questions for Self-study.

3.8 References for Further Study.

3.0 Objectives:

After studying this unit ‘Road Transport,’ you will be able to know –

� The meaning and nature of road transport.

� The features of road transport.

� The private and public city transport system in India.

M.A. II- Economics- Economics Transport and Communication

85

� The progress and problems of road transport in India.

� The functioning of National Highway Authority of India Ltd.

� The policy of motor transport in India.

� The co-ordination between road and railway transport in India.

3.1 Introduction:

The means of transport plays an important role in human resource development

of a country. Most of the countries in the world have developed transport system in

20th country for their economic development. The road transport plays vital role in

the development of developing as well as developed countries. The overall transport

system includes road, rail, water and air transportation. We will consider the details

in respect of road transport in this particular Unit No-3. Road transport is important

transportation means for more than govt. of peoples in a developing country like

India. Now-a-days, road transport is known as a infrastructural investment for

economic development of a nation. Now we will consider the meaning nature,

features of road transport, progress and problems of road, transport in this particular

unit.

3.2 Subject Description:

Road transport is one of the old means of transportation. This transport system

is always connected with the day-today needs of common man. Road transport is

essential for the establishment of co-ordination between the demand supply of

commodities and services within the short-run period. Now we will get details

regarding road transport as follows.

3.2.1 Nature, Significance and Characteristics of Road Transport:

Road transport infrastructure is important in economic development of a

country. Road transport facility is more convenient where rail and water transport is

impossible, such type of transpiration is more useful for a developing country like

India for rural development in respect of transportation of agricultural produce from

rural to urban area. Now we will consider the significance or importance of road

transport.

A) Source of increase in National Income: Economic development of a

country depends on the progress of industry, agriculture and service sector of an

economy. When a country develops all these sector, the development of road

86

transport takes place automatically. In a developing country like India, road transport

is a major means of transport for all these sectoral development. Due to the

development of roads, passenger and goods services also develops and with this

development, a country’s overall national income increases thorough tax revenues.

B) Road transport–base of country’s economic development: Road

transport is the base of economic development of a country like India such type of

transport establishes the linkage between rural and urban areas. Road transport

becomes useful for the transportation of agricultural and agro-based products from

rural area to the urban. Thus, road transport leads to agricultural and industrial

development of a country which is the base of economic development of a

developing country like India.

C) Source of employment: Road, transport facility is an important source of

employment in a developing country. Unemployment is one of the basic problems of

developing countries like India, Lakhs of people have obtained skilled and unskilled

type jobs through the construction of roads as well as maintenance of roads in India,

well-known road transport facilities have played vita role in transportation of food

supply from rural to urban areas. Thus, road transport is a essential tool of

employment opportunities in a country.

D) Road transport leads to industrial growth: Due to the development of

roads, a country’s industrial development takes place with a systematic way. The

size and growth of population in last 20th and 21th century, increases on large scale.

Most of metro-Politian cities and industrialization is based on the development of

infrastructural facilities like road transport, so that central and the state governments

in India have given stress to develop roads in rural as well as urban areas of the

country since 1957. The development of small, medium and large scale industries

takes place due to the development of roads in a country.

E) Road transport and agricultural development: Agriculture is the base of

economic development of Indian Economy. The intensive and extensive growth of

agriculture in India depends on the progress of road transport. Since 1957,

Government of India and the, various, state governments have provided various

facilities to this particular sector. So that the food grain and cash crops production

has increased in a country. On the contrary, road transport facilities have played

vital role for the transportation of agricultural produce from rural to urban areas in

the country. Now-a-days, road transport is only the cheap transport for agricultural

87

marketing. Thus, India’s agricultural development occurs due to the development of

roads.

F) Road transport helps to develop other means of transportation: Road

transport is helpful for other means of transport also. Due to the development of

road transport, rail and air transport has been developed in India. Road transport

also helps to the development of water transport in India. Thus road transport is

complimentary means to other means of transport.

G) Political and social welfare: In a developing country like India road

transport is important for political and social welfare of the country. Road transport

facility is useful for the protection of all borders of the country. Such types of

transport is, useful for the means for communication of rural to urban areas.

In this way, Road transport develops a country both rural and urban areas in

India. So that most of the developed and developing countries have given

importance to develop road transport for all round development.

���� Characteristics of Road Transport:

Road transport is an integral part of any transport activity. This type of transport

has developed at the end of 19th century. The importance of road and road transport

can be judged with the help of length of roads and the size of population of a

country. The nature and importance of road transport is basically depend on social

and economic angles. Now we will consider the important features of road transport.

A) Less investment: The total investment to be made by the country for road

transport is less than water, air and rail transport. The human capital required for the

construction and maintenance of roads is mostly unskilled as well as local. The total

cost of maintenance for roads is also less as compared to the other means of

transport i.e. railway and air transport. Thus the investment, for such type of

transportation facility is less.

B) Flexibility: This is an important feature of road transport. The flexibility of

movement of passengers and goods is more possible in road transport. The roads

are more flexible than railways has no fixed route or time to move. Road transport

can also establish the linkage between rural and urban areas. Roads are most

important for goods transport.

C) Freedom for utilization: Road transport is more elastic as compared to

rail or air transport, because due to natural or other problems rail or air transport

88

becomes unhealthy and obstacle oriented. But there is full freedom for the utilization

of roads to the passengers.

D) Speedy transportation: Roads are most important for speedy

transportation from one place to another. Existences of adequate roads and road

transport facilities assists to develop all the sectors of country. We can get inter

connectivity between one village to another and village to city for the various

purposes. So that road transport is most suitable for producers, manufactures and

traders also. Road transport is acceptable to carry bulky as well as perishable

products like fruits and vegetables over short distance. If the quality of roads of the

country is better, we can reach to the proper place in proper time with a speedy

method.

E) Safety journey of passengers and goods: Road transportation is most

safety for passengers and goods as compared to other means of transportation

within the certain limit. So that people gives more preference to road transport rather

than rail or air transport. Apart from this if some obstacles arises in road transport,

alternatives can find out for, transportation which is not possible for rail or air

transport tool of economic development with sate journey.

F) Useful for shorter distance transport: Road transport is most reliable for

short distance transport in a developing country like India, because such type of

transport can develop in a lakhs of villages in India with the help of surfaced and un

surfaced roads. Railway or air transport cannot become more benefisher to India

because of its vast geographical area. This road transport is the useful means of

transportation for short distance in a development country like India.

In this way, above mentioned all features of road are important. Due to the

large size of increasing population and urbanization, some problems arises in road

transport. But we can solve these obstacles, with a systematic way. Government of

India and all state governments in a country have given stress on the development

of roads and road transport since last 20 years. Thus, road transport plays vital role

in all round development of a country.

3.2.2 Private and Public Transport System in India:

Road transport was not so developed in India before 1947. But since

independence central and state Governments have given priority to the

development roads in country. Due to the appropriate policy adopted by

89

Government of India, private and public transport system has been developed since

1957. Private transport system includes the goods transport, passenger transport

as well as the various means of passenger and goods transport. Government of

India has given the permission to private transport to solve the problems of

transportation. Most of state governments, in India are providing Bus facility to the

passengers in rural and urban areas of the country. In addition to this, Government

has implemented a policy for the development of various types of private vehicles

for passenger and goods transport in country. i.e. Minibus, Zips, trucks, Rickets,

private cars etc. Now we will see the progress of private and public means of

transport during the period of 2001 to 2008. The Table No.3.1 clears statewise

progress of private and public transport system in India.

“State wise progress of private and public registered vehicles in India.”

“Statewise progress of Vehicles Registration in India from 2001-2008”

States/Year 2001

(in’000)

2002

(in’000)

2003

(in’000)

2004

(in’000)

2005

(in’000)

2006

(in’000)

2007

(in’000)

2008

(in’000)

Andhra

Pradesh 3,966 4,389 5,002 5,720 6,446 7,232 8,042 8,989

Arunachal

Pradesh 21 21 21 21 21 21 21 21

Assam 542 596 657 727 798 883 973 1,086

Bihar 949 1,024 1,121 751 726 694 647 593

Chhattisgarh 857 948 1,076 1,216 1,367 1,536 1,726 1,939

Goa 341 366 397 436 483 537 585 638

Gujarat 5,576 6,008 6,508 7,087 7,892 8,785 9,633 10,543

Haryana 1,949 2,122 2,279 2,548 2,883 3,267 3,689 4,167

Himachal

Pradesh 217 244 269 289 319 375 421 480

Jammu &

Kashmir 330 364 399 439 493 556 628 719

90

States/Year 2001

(in’000)

2002

(in’000)

2003

(in’000)

2004

(in’000)

2005

(in’000)

2006

(in’000)

2007

(in’000)

2008

(in’000)

Jharkhand 909 984 1,101 1,217 1,341 1,479 1,630 1,796

Karnataka 3,537 3,636 3,738 3,977 4,338 4,717 5,036 5,360

Kerala 2,112 2315 2552 2792 3180 3612 4034 4564

Madhya

Pradesh 3,095 3,173 3,459 3,804 4,119 4,442 4,710 4,968

Maharashtra 6,760 7,414 8,134 8,969 10,055 11,281 12,477 13,817

Manipur 77 90 97 106 114 123 134 145

Meghalaya 62 67 73 73 78 84 89 95

Mizoram 31 34 37 42 48 54 61 70

Nagaland 160 177 162 172 186 201 215 230

Orissa 1,096 1,215 1,359 1,525 1,717 1,936 2,159 2,417

Punjab 2,910 3,103 3,308 3,529 3,859 4,225 4,571 4,992

Rajasthan 2,943 3,197 3,487 3,834 4,285 4,791 5,281 5,815

Sikkim 12 13 15 17 19 21 23 25

Tamil Nadu 5,162 5,658 8,005 8,575 10,085 11,901 13,860 16,208

Tripura 50 57 66 76 85 95 105 117

Uttarakhand 364 406 457 516 580 651 732 822

Uttar Pradesh 4,921 5,171 5,928 6,460 7,271 8,144 8,970 9,919

West Bengal 1,690 1,690 2,366 2,548 2,816 3,138 3,464 3,833

Adman &

Nicobar

Islands

25 28 28 28 31 34 38 42

Chandigarh 386 386 562 586 629 677 732 799

91

States/Year 2001

(in’000)

2002

(in’000)

2003

(in’000)

2004

(in’000)

2005

(in’000)

2006

(in’000)

2007

(in’000)

2008

(in’000)

Dadra &

Nagar Haveli 13 13 31 35 43 54 67 86

Daman & Diu 37 41 44 48 55 63 71 79

Delhi 3,635 3,699 3,971 4,237 4,544 4,868 5,166 5,469

Lakshadweep 4 5 5 5 6 7 7 8

Pondicherry 252 270 293 313 359 418 495 552

Source - www.automobileeindustryinindia.com

Table No. 3.1 shows the statewise progress of total private and public vehicles

registered in India during 2001 to 2008. The table also indicates that Andra-

Pradesh, Gujrat, Haryana, Karnataka, Himachal Pradesh, Madhya Pradesh,

Maharashtra, Punjab, Rajasthan, Tamilnadu, Uttar Pradesh are the most developed

states in respect of registered vehicles during 2001 to 2008.

���� The progress of registered private and public vehicles in India during

planning period:

The total number of various types of private and public vehicles has been

increased during the period of 1950-51 to 2007-2008. The following table No-3.2

indicates the progress of these vehicles since 1950-51 to 2007-2008.

Table No.3.2

“The Growth of Registered vehicles in India during planning period.”

Year

Type of vehicle Total No.

of

vehicles Two

wheelers

Car/Jeeps

&Taxi Buses

Goods

Transport

Other

Vehicles

1950-51 27 159 34 82 04 306

1960-61 88 310 57 168 42 665

1970-71 576 682 94 343 170 1,865

1980-81 2,618 1,160 162 554 897 5,391

92

Year

Type of vehicle Total No.

of

vehicles Two

wheelers

Car/Jeeps

&Taxi Buses

Goods

Transport

Other

Vehicles

1990-91 14,200 2,954 331 1,356 2,533 21,374

2000-01 38,556 7,058 634 2,948 N.A. 54,991

2005-06 63,487 11,571 879 4,345 N.A. 88,068

2007-08 77,588 14,222 1,003 5,018 N.A. 1,06,591

N.A.

Reference :

A) Ministry of Road Transport Govt. of India, Motor Transport Statistics Various

issues.

B) Economic Survey 2011-12 Govt. of India. New Dehli.

Tables No. 3.2 clears the growth of private and public vehicles in India

since(13) 1950-51 to 2007-08. The total number of all registered private and public

vehicles has increased from 3.06 lakh to 10.66 crodes (352 times) during the period

of 1950-51 to 2007-2008. The table also indicates that two-wheelers and four

wheelers number has increased mostly. All types of these vehicles play vital role in

road transport and economic development of a country now-a-days.

���� State-wise Registered Commercial and Non-commercial Vehicles

Progress in India:

The number of registered private and public vehicles has been increasing

since, 1951. Due to the economic development of a country, every state has made a

considerable progress. So that the standard of living has also enhanced. As the

income level of the various states increased, the number of private and public

vehicles has increased. These two types of vehicles have played vital role in Indian

economy. Now we will consider the progress of various types of registered vehicles

in the states during 2001 to 2008 in India. The table No. 3.3 shows us the details

regarding state-wise registered vehicles in India.

93

Table No. 3.3

State-wise position of registered vehicles in India

Sr.No. States

Total

Commercial

Vehicles

Total Non-

Commercial

Vehicles

Total No. of

Vehicles

1 Andhra Pradesh 5,70,488 51,49,432 57,19,920

2 Arunachal Pradesh 5,272 15,872 21,144

3 Assam 1,47,966 5,78,853 7,26,819

4 Bihar 97,280 6,53,623 7,50,903

5 Chhattisgarh 88,621 11,27,124 12,15,745

6 Goa 50,842 3,85,278 4,36,126

7 Gujarat 7,49,317 63,38,173 70,87,490

8 Haryana 2,68,192 22,79,718 25,47,910

9 Himachal Pradesh 66,609 2,22,204 2,88,813

10 Jammu & Kashmir 86,949 3,51,647 4,38,596

11 Jharkhand 1,30,176 10,86,782 12,16,958

12 Karnataka 4,53,262 35,23,322 39,76,584

13 Kerala 6,85,191 21,06,883 27,92,074

14 Madhya Pradesh 2,38,404 35,65,124 38,03,528

15 Maharashtra 11,43,904 78,24,829 89,68,733

16 Manipur 12,456 93869 1,06,325

17 Meghalaya 24,819 48,563 73,382

18 Mizoram 10,319 31,826 42,145

19 Nagaland 66,506 1,05,411 1,71,917

94

Sr.No. States

Total

Commercial

Vehicles

Total Non-

Commercial

Vehicles

Total No. of

Vehicles

20 Orissa 1,46,512 13,78,570 15,24,982

21 Punjab 1,77,965 33,51,135 35,29,100

22 Rajasthan 3,40,537 34,93,269 38,33,806

23 Sikkim 7,325 9,911 17,236

24 Tamil Nadu 8,28,021 77,47,220 85,75,241

25 Tripura 20,931 54,616 75,547

26 Uttarakhand 40,271 4,75,711 5,15,982

27 Uttar Pradesh 2,86,860 61,73,338 64,60,198

28 West Bengal 3,88,627 21,59,336 25,47,963

29 Delhi 2,33,212 40,03,463 42,36,675

Total of Union

Territories 44,922 9,97,701 10,42,623

All India Total 74,11,756 6,53,05,503 7,17,44,474

Source – Website – www.automobile.industry in India

Table No. 3.3. shows us the state-wise position of registered total number of

private and public vehicles during 2001 to 2008 in India. The total number of these

vehicles has increased on large scale during last 10 years. Maharashtra, Gujarat,

Andhra Pradesh, Tamil Nude, Karnataka, Kerala, Delhi are the states where the

registered number of non-commercial vehicles (private vehicles) has increased on

large scale. This means that the total number of private and public vehicles has

increased during last few years due to the growth of population and standard of

living of the people’s in the country. But on the contrary, the quantitative and

qualitatively roads have not developed. So that the various problems have been

arised in respect of road transport in a country. We cannot neglect these problems

for overall growth of infrastructure in India.

95

3.2.3 Road Transport in India-progress and problems. National

Highway Authority of India.

Road transport plays vital role in a developing country like India of all the

means of transportation. Government of India and all state Governments have made

considerable efforts for the development of road transport facilities in India during

planning period. Government of India has made sufficient financial provision for road

transport development in rural as well as urban areas of the country. The overall

development of a country is depend on the infrastructural progress i.e. road, rail,

electricity etc. So that the principle of BOT (built, operate and transfer) has been

accepted by the Government to earn maximum reverse from road transport and for

the expansion roads with quality. Now we will consider the development of roads in

India since 1951.

���� Progress of Road Transport – The Government of India and the various state

Governments in a country have developed following 5 types of roads in country

during last 60 years of independence.

A) National Highways: National highways are always connected with

important ports, industrial places and the states in a country. The road construction,

maintenance and management of highways are belongs to central Government in

India. At present, there are 70000 Kilometers length highways in a country. The

quality and management of such type of roads is very excellent as compared to

other roads available in a country.

B) State Highways: The roads linked with the important cities in the states

are known ‘State Highways’. The construction, maintenance and management of

such type of roads is under the state Government authority. Now-a-days we find

1,36,000 kilometre length of state highways existing in a country.

C) District Roads: District roads are connected with the talukas and

important places in a district. These roads are important for marketing and

production of centers. At present, there are 3 Lakh kilometers length district roads in

a country. The maintenance and management of such type of roads is in the hands

of Zilla-Parishads. The quality and maintenance of such type of roads is not superior

as compared to state and national highways.

D) Rural Roads: There are two types of rural roads available in a country i.e.

surface and subsurface. Village panchayat prepares such type of rural road up to 2

96

to 5 kilometer distance since 10 plan, due to the central and state Government’s

assistance, rural roads have been developed. In India, rural roads have been

developed within the 6 Lakh villages. But the quality and maintenance of these

roads is very poor. So that many problems arises in rainy season particularly while

transporting light and motor vehicles on rural roads.

E) Border Roads: Such type of roads, are prepared the Nation. These roads

have been constructed for the protection of border of the country. In India, there are

18500 kilometers length roads are of border roads.

Road Transport progress in India:

Government of India has given attention to the development of all types of

roads since 1951. Government has established a institute of road research in 1950.

This institute has given technical consult and guidance to the Government time to

time. According to the guidelines of this institute, Central Government has

developed national and state highway roads, district roads and rural roads. Due, to

the proper guidance of research institute, since 1951 all types of roads have been

developed in a country. Now we will see the progress of roads in India during

planning period with the help of table no. 3.4 given below

Table No. 3.4

“Development of roads in India during planning period”

Unit - 000 Km.

Sr.

No Particulars

Development of Roads

1950-

1951

1960-

1961

1970-

1971

1980-

1981

1990-

1991

2000-

2001

2007-

2008

1 Total length

of Roads 399.9 524.5 914.9 1485 2331 3374 4110

2

Length of

National

Highways

19.8 23.8 23.8 31.7 33.7 57.7 70.5

3 Length of

State

Highways

1.66 N.A. 56.8 94.4 127.3 13.2 155

M.A. II- Economics- Economics Transport and Communication

97

Sr.

No Particulars

Development of Roads

1950-

1951

1960-

1961

1970-

1971

1980-

1981

1990-

1991

2000-

2001

2007-

2008

4

No.of

registered

vehicles

(000)

306 665 1865 5391 21374 54991 114951

Denotes the figures of 2008-09.

Source – Economic survey-2011-12. Government of India. Ministry of finance,

Department of Economic Affairs, Economic Division Feb. 2012.

Table No. 3.4 shows the overall progress of roads in India during the period of

1950-51 to 2007-08. Due to the development of above mentioned roads, the total

number of goods and passenger vehicles, who are using the roads available, also

increased. This is a sign of India’s infrastructural development in rural as well as

urban areas. Since 10th five year plan, Government of India along with the State

Government has given more priority to road development thorough various

schemes. The infrastructural development has been made with the help of public

and private sector, participation. Due to this proper policy, since last 10 years, the

quality and progress of rural and urban areas in India has also improved.

Problems of Road Transport in India:

Since 1957, Government of India and the State Governments have made

considerable progress in respect of road transport quantitatively. But being a vast

country, road transport of country is facing a number of problems in rural as well as

urban areas. Now we will discuss the major problems of road transport in India.

A) Inadequate surface roads and poor maintenance: Most of the Indian

roads are unsurfaced. We find that 42.65% of roads in India are unsurfaced which

are not useful for vehicle traffic. In addition to this, the maintenance of these roads is

very poor. So that they aggravates the problems especially in rainy season. Due to

the poor maintenance of roads, various types of vehicles have to face the problem

of increasing losses of Rs. 200 crores per year. Thus, inadequate surface roads and

poor maintenance of roads is one of important problem of roads transport in rural as

well as urban areas of the country.

98

B) Mixing of means of transport on roads: This is one of the important

problem of road transport in India. Indian roads are mixing of traffic vehicles. We find

that two-wheelers, three-wheelers, bullock carts, cyclists, high speed cars, tractors,

trucks, and animals etc. are often use roads. Even though highways are not free

from this malady. This situation leads to traffic congestion, pollution and road

accidents.

C) The problem of multiple check-posts and excessive taxation: Indian

vehicles have to pay more and excess tax for using the roads. There are multiple

check ports, toll tax, octroi, rates in a country. Some time due to the policy of check-

post, the speed of vehicles decreases and cost of transportation increases. In short,

defective multiple check-posts and taxation policy is caused to time-wasting and

irritation to the transports in India. The average taxes charged to each vehicle in

India is of Rs. 3500/- every year. Due to this road transport in India has become

expensive.

D) Lack of facilities for safeties: Since 1951, the total length of roads has

increased on large scale. But as compared to the expansion of road transport

Government has failed to provide the facilities of safeties i.e. servicing center, first

aid centers, telephones, clean toilets, restaurants and rest places. Due to the lack of

these facilities, road transport quality is not superior as compared is not superior

compared to air and railway transportation.

E) Little partnership of private sector: The share of private sector in road

transport development was very little during the period of 1951 to 1990. There are

two basic reasons for less participation of private sector in road transport

development in India i.e. long gestation period and low returns on it. Government of

India and the State Government have also not prepared legislatives on work for

private investment in road transportation. Government has not shown the keen

interest in designing and construction of roads up to 2005-06. So that private sector

participation in Indian road development was little up to 2005-06. But since 2005-06,

Government has given priority to increase the share of private sector in road

development through BOT (Build, Operate and Transfer) principle for rural and

urban areas in the country.

F) Lack of coordination: Government of India and the State Governments in

country have made considerable progress in the lengths of roads during last 60

years. But yet we do not find coordination between the facilities provided to National

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Highways and rural roads. The attitude towards national highways roads

maintenance is always positive whereas the rural roads construction and

maintenance is always neglected. So that rural and taluka level roads condition in

rainy season is very bad now-a-days.

G) Lack of stable road development policy: There has been no stability in

road transport policy in India. It has changed as per change in government. On the

contrary, there are number of private and public sector agencies which look after the

construction and maintenance of diffident types of roads in India. We also find that

there is no co-ordination between these agencies about road development

programmers. Due to the unstable policy in road transport development, India’s

quality of roads and infrastructure is not superior as compared to the developed

(western) countries.

H) Shortage of funds for road development: This is one of the important

problems in India in respect of road development. The quality and quantity of roads

is bad due to the scarcity of funds for the construction and maintenance of roads in

a country. The plan allocation for road development has decreased from 6.9% to 3%

of, the total plan expenditure during the period of 1950-51 to 1997-98. Since 9th plan

government has given priority to increase the funds for road construction and

maintenance in rural as well as urban areas of the country. Government has also

taken the decision of private sector participation to solve the problem of funds for

road development.

Apart from all above mentioned problems the problem of inadequate roads of 2

and 4 lines, lack of other facilities, increase in the rate of accidents, variation in the

rates of toll etc. are the issues before road transport in India. We must have to solve

these problems for overall development of country.

National Highways Authority of India:

Road transport consists of 40% share in India’s total transportation facility.

Being a vast nature of country, the development of road transport was not quite

excellent up to 1951 to 1990. So that central Government in India prepared a plan

for the expansion of road transport. Government of India has set up a autonomious

body named ‘National Highways Authority of India’ in 1989. But actually this board

started its functioning since February 1995. The main function of this autonomous

board is to take a responsibility of development, maintenance and operation

National Highways and other associated facilities for rural and urban transport.

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Government of India provides funds to this board. This board has to develop the

road facilities in association with the state’s Public Works Departments (PWDS) and

Broder Road Organization. Now we will see the nature and progress of National

Highway Authority of India since its establishment.

The functioning and progress of National Highways Authority of India:

The nature of functioning of this board is at national level. Up to 2003, the board

has started 135 different type of works related to road development through the

contractors in a country. Out of which 87 road development work were undertaken

with the help of domestic contractors, 11 are related to foreign contractors and 37

are of collaborative i.e. domestic and foreign contractors jointly. The total value of

this total work of road transport was of Rs. 20,000 crores. The board has prepared a

systematic plan for road transport development since last 6 years. The board has

prepared a plan of road development within the 7 phases with their specific period of

completions as given below.

NAHI’s Plan of Road Development:

Phase Total Length of Road Period

I & II 14145 km. Dec.2009

III 12109 km. Dec.2013

IV 20000 km. Dec.2012

V 1000 km. Dec.2015

VI 6500 km Dec.2015

VII

Ring Roads, Bypasses,

Grade Separators, flyover

Bridges, under bypasses

On BOT principle

Ref : Economics Survey of India 2011-12(10I)

Since 2006-07, the scope of National Highways Authority of India is increasing.

The board has made the solution for the increasing trend of road accidents through

the development of the construction of two-four, six and eight lines highways roads.

Upto Dec 2009, the board has determined target to construct roads of 5846km, for

the metropolitan cities of Delhi, Mumbai, Chennai and Kolkata. Along with this, the

board has also prepared a plan of 7142km. 4 lines road in I and II phase for East,

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West and South states in India. The total cost of I and II phase work to be completed

by NHAI was of Rs. 80826 crores.

National Highways Authority of India has made a plan to prepare 12109 km.

length of 4 & 6 lines roads up to December 2013. Which where linked to the high

density states in a country. These roads were useful to the capital cities of the

states, tourist places and economically benefisher cities. The board has also

determined to construct 20000 km. length 2 lines roads with pavers in the 4th phase.

Such type of roads will be developed with BOT principle whose total estimated cost

is of 6950 crores.

NHAI has also determined to construct 7500 km. 4 lines roads in the 5th phase

of estimated cost Rs. 41210 crores. Apart from this, the board has also made a plan

of 1000 km. length road construction upto Dec.2015 (6th phase) with the help of

Government and private sector participation whose estimate cost is of Rs.16680

Crores.

National Highways Authority of India has started to work for the problem of road

traffic in a metropolitan cities like Mumbai, Delhi, Kolkata, etc. The board has made

a solution for road safetyness through ring roads, expressways, tunnels and

overfly’s. Such type of work should be completed with BOT principle. The total

estimated cost of these road facilities is of Rs.16680 Crores. The board has also

determined to develop road facilities to eastern and north side states of the country.

Thus NHAI has made considerable progress in respect of road construction,

maintenance and the provision of qualitative roads for urban and rural areas. Since

last 10 years, NHAI has become successful for providing quality roads with the help

of public and private sector participation based on BOT principle. Due to the proper

working of NHAI, the infrastructural facilities of road transport has been developed in

a country.

3.2.4 Policy of Motor Transport, taxation city- transport in India:

Road transport has developed in India since 1951 rapidly. The number of all

types of vehicles is increasing day-by-day since 1951, The size and growth of

passenger and goods transport has also increased on large scale during planning

period. The number of all types of vehicles has increased from 3.06 Lakh to 11,495

Lakh during the period of 1951 to 2008. Due to the rapid growth of vehicles in a

country, the policy for motor transport has been emerged. So that Government of

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India and the State Governments has made proper policy for smooth working of

motor transport in a country. Now we will see the policy developed in India for

motor/vehicle transport on roads.

The first motor transport act was made in India on 1865 for goods transport.

After all, Government of India has made “Motor Vehicles Act’ on 14 October 1988.

The provisions in this “Motor Vehicles Act” are useful non-a-days also. The

important provisions of Motor Vehicles Act of 199 are as follows.

I) According to this Act, every moter-owner must have driving licence with one

year minimum 1 year experience.

ii) Motor-driver must have to obey the rules and regulations of transport.

iii) This act has cleared the rules for temporary and permanent license system.

iv) The act has given full authority to Central Government for policy determination

and implementation.

v) The act also denoted the machinary for the effective implementation of

transportation on roads. i.e. ministry of rail and road transport officer and

assistant regional transport officer, etc.

vi) This act has given full authority to charge fine for faulty motor driving-holder.

vii) R.T.O. of the state has given powers to control the rural and union transport

vehicles.

Motor Vehicle Act 1988 and Central Motor Rules 1989 have been modified later

on. The basic amendment have been made on 1994, 2000, 2001 and 2004. These

amendments are related to categorisation of motor Vehicles, encouring use of

battery CNG and solar energy. The amendment of 2000, has authorised use of LPG

as an auto fuel for vehicles. Amendments of 2004 includes the safety norms for

various components of agricultural tractors i.e. power steering, lamps, light, parking

light etc. The extension of Bharat State- II emission norms for 4 wheelers in solapur

and Lucknow with effect from 01-06-2004 and 11 mega cities in India from 1.4.2005.

The Central Government has notified the amendments in 2005 regarding the revised

norms for emissions and CNG/LPG type vehicles. Some of the state have been

empowered to prescribed special provisions such as fog lamp, power steering,

defogging and demisting systems in transport vehicles plying in the hilly areas.

Thus, In India, the various types of amendments have been made for safety road

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transportation since 1951. Due to the appropriate policy of transport, the quality of

road transport has been developed and controlled by the state governments under

Motor Vehicle Act of 1989.

Motor Transport Taxation Policy in India:

Road transport is an important infrastructural facility developed in India since

1951. As per increase in the size of passenger and goods transport in a country,

Central and State Governments have made considerable efforts to develop the

quality and extensive work regarding roads. But due to the rising trend in various

types of vehicles in India since last 20 years, the problems of road transport are also

enhancing. Here we must consider the cost and income from road transport for the

development roads in India. So that it is necessary to take into consideration the

cost of road construction, maintenance and income generated from the various

taxes charged on it. Now we will see the number of vehicles and income obtained

through the taxes to the Central and State Governments since 1951 with the help of

Table No. 3.5.

Table No. 3.5

Income from Road Transport in India

* Rs. In Crores

Year No. of Vehilcles Income from Road Transport

Central Govt, State Govt.

1950-51 30.6 Lakh 34.8 Crores 12.6

1960-61 66.5 Lakh 111.7 Crores 55.2

1970-71 186.5 Lakh 451.8 231.4

1980-81 539.1 Lakh 930.9 750.4

1990-91 2137.4 Lakh 4596 3259.6

2000-01 5499.1 Lakh 23861 12901.7

2006-07 9670.7 Lakh 54580 21770

2007-08 10533.3 Lakh 56758.2 24025.8

2008-09 11495.1 Lakh 53098 34241

2009-10 N.A. 59345.5 37733.5

Source: Economic Survey 2011-12 Government of India, New Delhi.

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Table No. 3.5 shows the trends in the income from road transport since 1950-

51 to 2009-10. It indicates the rising trend in income as per increase in the number

ofvehicles running on the roads in a country.

Nature of taxes and tax revenue from road transport in India:

Central and State Governments in India have increased their tax revenue from

road transport since independence. The government has also increased the tax

rates of road transport during planning period. In India, the taxes like registration fee

vehicle tax, maintenance tax, passenger toll etc. are charged to owner of the

vehicles. Table No. 3.6 denotes the progress of various types of tax revenue to the

states since 1980-81.

Table No. 3.6

Income from Road Transport in India

* Rs. In Crores

Year

State’s

income from

vehicle tax

The share of vehicle

tax to the total tax

revenue(%)

1980-81 687 10.38 %

1990-91 2628 8.66 %

2000-01 8740 7.41 %

2004-05 16017 8.47 %

2005-06 18417 8.67 %

2006-07 20047 7.94 %

2007-08 21951 7.66 %

Source : A) Economic Survey 2011-12

B) Various issue of State Finance RBI

Table No. 3.6 shows us the progress of the vehicle tax revenue to the states in

India since 1980-81 to 2007-08. It is clear that as per increase in vehicle tax

revenue, the states have not improved the quality of roads in india. The average

share of vehicle tax to the total tax revenue remains up to 8 to 10%. It is necessary

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to increase the infrastructure facilities in India for overall rapid economic growth of a

country. But the state Governments have to try to increase tax revenue from the

various types of taxes through road transport facility.

Urban Transport in India:

In a developing country like India, since 1951, due to the rapid growth of

population leads to the growing figures of cities and metro-Politian cities. On the

contrary, the flow of rural youth attracts towards urban areas for getting employment

on large scale. The old taluka and district level cities have created the various

problems of urbanisation. So that we have to consider the progress of urban areas

in country. Here we will also consider the problems of urban transportation in India.

Nature of Urban transport in India:

The urbanisation in India has increased due to the process of economic

development through industrialisation since 1951. As per increase in the cities and

suburban areas in big cities like Mumbai,Delhi, Kolkata etc. the number of private

and public vehicles has also increased on large scale. The number of benefishery of

local train has increased per day from 6551 to 88872 during the period of 1950-51 to

2000-2001in india. The number of all types of vehicles has increased due to the rise

and expansion of Indian metro-Politian cities. Now we will see the number of

vehicles running on roads of selected and cities in India. The table No. 3.7 shows us

the position of urbanisation of the selected cities in the country.

Table No 3.7

Private and Public Transport Vehicles in selected Metropolitan Cities in India

(As on 31/03/2000)

Metropolitan

Cities

Number of Vehicles

Total Two

Wheelers Cars

Taxiess

Rickshaws Buses Others

Ahmedabad 6,16,738 1,04,179 43,865 14,993 19,316 7,99,091

Bangolare 11,64,204 2,38,374 77,375 6,380 63,362 15,49,695

Chennai 8,48,118 2,07,860 45,016 4,409 44,223 11,49,626

Delhi 21,84,581 8,69,820 1,04,747 37,733 2,26,593 34,23,474

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Metropolitan

Cities

Number of Vehicles

Total Two

Wheelers Cars

Taxiess

Rickshaws Buses Others

Hyderabad 7,57,684 99,314 48,898 2,539 42,189 9,50,624

Jaipur 4,44,889 76,133 12,513 14,362 49,760 5,97,657

Kanpur 2,73,208 3,23,212 5,252 882 23,556 6,26,110

Kolkata 2,98,959 2,38,560 41,946 8,586 75,995 6,64,046

Lucknow 3,44,268 53,069 15,454 2,816 26,779 4,42,386

Mumbai 4,07,306 3,25,473 1,56,261 15,414 65,226 9,69,680

Nagpur 272734 27,573 10,666 2,788 17,478 3,31,239

Patna 184585 40,357 16,302 3,785 30,989 2,76,018

Pune 4,43,266 62,885 44,590 7,827 3,4,046 5,92,614

Other : includes goods vehicles, tractors and other vehicles

Source : Review of Urban Transport in India. Sanjay K. Singh page No. 83

Table 3.7 shows us the nature of various types of vehicles registered as on

31/3/2000. Since last 12 years the number of above table mentioned vehicles has

also increased on large scale. Due to the increasing number of these vehicles, the

pressure on road transport in urban areas in India has also become serious.

Since 1991, the speed or urbanisation in India has in increasing trend. As per

increase in the number of various types of vehicles the urban area people have to

face several problems i.e. the problems of housing, inadequate public transportation

facilities, the problems of infrastructural facilities, pollution and health problem etc.

The metropolitan cities like Mumbai, Pune, Kolkata, Ahmadabad, Bangalore have

become centres of pollution and health hazards. Road accident has become a

serious problem in Indian cities since last 10 years so that urban transport has to

face several problems in India.

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Urban transport problems In India:

The problems of urbanisation and urban transport have become serious now-a-

days. The important problems of urban transport in India since last 20 years are as

follows:

A) Traffic congestion and accidents: There is a serious problem of traffic

congestion in big cities like Mumbai, Pune, Delhi, Bangalore arises due to the

increasing trend off all types of vehicles. Most of the vehicle-owners do not obey the

traffic rules, hence the ratio of accidents is increasing day-by-day. Every year 8000

people avergely lost their lives in a accidents. On the contrary, the population growth

is also one of the important reason for these deaths and accidents. So that we have

considered this serious problem of urban areas transportation and make a solution

over it.

B) Environment Pollution: Noise, air and water pollution in Indian cities is

the gift of defective urban transportation and population growth in a country.

Mumbai, Kolkata, Delhi, Chennai, Hyderabad and Bangalore have crossed the

pollution level in a country. World Health organisation has given red indicator in

2001 to these cities and Government of India to control the environmental pollution.

Most of the petrol and Diesel vehicles running on the roads creates air pollution and

rising level of dust in a big cities in India. Recently Delhi and some elsewhere cities

have adopted policy of CNG, fuel, but the ratio of these vehicles is very low. So that

environment in these cities has already not apart from pollution.

C) Roadways congestion and speed of vehicles: Due to the increasing

number of vehicles in a big cities like Mumbai, Bangalore, Pune etc. The problem of

traffic congestion arised. It affects all modes of transportation as well as all socio

economic groups in a country.

In a capital city of India (Delhi) the number of vehicles is increasing around 10%

per year, Due to the rise in the number of these vehicles, the average roadway

speed for motor vehicles in Mumbai has decreased from 38 km/ph to 15 km/h during

1962 to 1993. In Delhi, the average vehicular speed come down from 27 km/h to 15

km/hour during 1997 to 2002. In a city Kolkata the average speed of motor vehicle is

of 7 km/hour in 2003. Thus, the decreasing average speed of motor vehicles in a big

cities increases the cost of transportation which leads to the inflation and low

standard of living of urban people. It is necessary to prepare a systematic plan for

urban transportation for health.

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D) Inadequate public transport facilities: Most of the metropolitan cities in

India are increasing on large scale. As per increase in the population, the public

transport facilities like buses, locals and metro-trains have not enhanced. Due to the

inadequate facilities of public transport the number of private vehicles is increasing

recently. So that the various traffic congestion problems arises in these cities. In

addition to this, most of the person using footpath are not obey the traffic rules. So

that the problems of accidents often take place in a city while developing a

metropolitan city, the planner have not considered the future traffic congestion

problems. So that these cities and suburban areas have to face a number of

transportation problems.

Thus, urban transport has to face number of problems. Central and State

Governments in India have adopted a policy of private public partnership for the

road transport development. But this policy is not sufficient to solve the acuit urban

transportation problems.

Rail-Road Coordination:

Railway and road transport in India is compliment and for each other. Due to

the development of road transport facility, the farmers living in Lakhs of villages in

India have got a way to transport their agricultural produce to the market as well as

to the railway stations in the country, Now-a-days rail transport is most useful for

solving the road transport problems arise in a country. Since last 20 years

Government has developed local trains in the metropolitan cities like Mumbai,

Kolkata, Chennai, Hyderabad as the substitute for road transport. In a capital city of

India (Delhi), metro-train facility has been playing important role in the passenger

transportation. Though we find co-ordination between the road and rail transport,

sometimes there is a competition between these two types of mode of transport.

Indian railway is competing with the goods transport of trucks and motor transport. It

is necessary to establish coordination between the means of road and rail transport

for overall development of country. The rural as well as urban economic

development is based upon these two modes of transport. So that Central and State

Government should consider the need of coordination between rail and road

transport in India.

M.A. II- Economics- Economics Transport and Communication

109

3.3 Summary:

The means of transport plays an important role in a country. Road transport,

railway and air transport are the important mode of transport for a developing

country like India. Road transport facility has been developed in India since 20th

century. The total length of roads has increased from 3.99 lakh kilometers to 41.10

Lakh kilometer during the period of 1950-51 to 2007-08 in India, Government of

India and the various state Government have developed 5 types of roads in a

country since last 60 years. These roads are as follows.

a) National Highways

b) State Highways

c) District Roads

d) Rural Roads

e) Border Roads.

Due to the rapid growth of population in India, the rural and urban areas has to

face several road transport problems since last 20 years. The various problems of

road transport in India are as follows –

a) Inadequate surface roads and poor maintenance.

b) Mixing of means of transport on roads.

c) The problem of multiple check-posts and excessive taxation.

d) Lack of facilities for astuteness.

e) Little partnership of private sector.

f) Lack of co-ordination

g) Lack of stable road transport policy.

Central Government has established National Highway Authority of India

Limited on 1989 for solving the problems of road transport in a country. This is an

autonomous board working since 1995 for all round development of rods in rural as

well as urban areas of a country. The board has prepared a plan of roads

development within the 7 different stages during 1995 to Des. 2015, with the help of

state Governments and public works departments (PWD’S)

110

During the planning period, Government of India has made a motor transport

act in 1988 for controlling the vehicles on the roads. The Government has also

made necessary provisions, in the motor vehicles act 1988, regarding the taxes and

charges for the registration of different types of vehicles. Due to this proper policy,

the total tax revenue of the Government has increased from Rs. 34.8 Crores to Rs.

39345.5 Crores during the period of 1950-51 to to 2009-10, The total tax revenue of

the states also increased from Rs12.6 Crores to Rs. 37733.5 Crores during the

same period in India.

Now-a-days a problem of urban transport has become serious in India. Most of

the metropolitan cities like Mumbai, Kolkata, Delhi, Chennai and Bengalore have to

face several transportation problems. We must have to consider the problems of

urban transport and make a proper solution over it, Central and State Government

should prepare a policy for infrastructural development of the successive economic

planning. So that it is needed to enhance transport facility quantitatively as well as

qualitatively in a country for substainable and inclusive growth economy.

3.4 Self Learning Questions:

A) Multiple choice questions

1. The rapid development of road transport in the world development was in ------------

------ century.

1) 14th 2) 15th 3) 17th 4) 20th

2 --------------------- is the base of economic development of a country.

1) Road transport 2) Rail transport

3) Road & Rail

transport 4) Air transport

3 Since 1951, --------------- type of vehicles have increased as compared to public

vehicles in India

1) private 2) buses 3) railway 4) bulletcars

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4. --------------------------- state is the most developed in respect of vehicles.

1) Maharashtra 2) Gujarat 3) Assam 4) Karnataka

5. The functioning of National Highways Authority of India Ltd was started in -----------

--------

1) 1989 2) 1995 3) 2001 4) 2005

b) Answer in One sentence

1 State two features of road transport.

2 Which are the two means of public passenger transport in India ?

3 Who gives license of vehicles in India ?

4 Who is getting maximum income from road transport in India?

5 State two problems of urban transport in India

6 Which types of vehicles are on large scale in India ?

3.5 Answer to Self Learning Questions:

(A) Rewrite the following sentences by choosing correct alternative.

1 The rapid development of road transport in the world development was in 20th

century.

2 Road transport is the base of economic development of a country.

3 Since 1951, private type of vehicles have increased as compare to public vehicles

in India

112

4 Maharashtra state is the most developed in respect of vehicles.

5 The functioning of National Highways Authority of India Ltd has started on 1995.

B) Answer in one sentence

1 Less investment and flexibility are the two features of road transport.

2 Business and Railway are the two of public passenger transport in India.

3 Central Government of India gives license of vehicles in India ?

4 Central Government of India is getting maximum income from road transport in

India.

5 Traffic congestion and accidents are two problems of urban transport in India

6 In India, we find two-wheelers on large scale

3.6 Keywords :

A) Infrastructural facility: The facilities developed for overall development of a

country.

B) Rural Roads: The roads developed in rural areas of the country for agricultural

and allied activities development.

C) National Highways: The roads linked with the metropolitan cities and states in

a country.

D) State Highways: The roads developed in the states.

D) Metro-train: A facility developed in a metropolitan cities to overcome traffic

congestion.

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3.7 Questions for Self-study:

A) Write short notes.

1) Nature of Road transport

2) Private and Public transport in India.

3) Development of road transport in India.

4) Policy of Motor transport in India.

5) The problems of urban transport in India.

6) Rail- Road Coordination

B) Essay type Question

1) State the meaning, nature and characteristics of road transport.

2) Explain the progress of road transport in India since 1951. What are the

problems of road transport in a country?

3) State the Motor transport policy of India. Explain the position of tax revenue of

the Government.

4) Explain the present position of urban transport in India. Can rail-road

coordination becomes successful to solve problems of urban transport in India?

3.8 References for Further Study:

1. Transport sector in India (1983) Mishra/ Chaudhary Prasannkumar, Kalyani

Publishers, Ludhiyana (U.P)

2. Management of Modern City Transportation System (2004) Dewan K.K/

Mustafa M. First Edition, Deep and Deep Publication, New Delhi. 110027

3. Economic of Development and Planning (2004) Lekhi R.K. 9th Edition, Kalyani

Publishers Ludhiyana,

4. Review of Urban Transport in India (2007) Singh Sanjay K. Article of website

www.urbantransportinindia.

5. Urban Transport Crisis in India, Transport Policy December (2005) Online

Journal Elsener.

6. Economic Survey (2008-08 to 2011-12) GOI Publication, New Delhi.

7. Transport- Theories and Development (1979) Kshirsagar R.N. (Marathi Book)

Continental Prakashan, Pune (Maha.) � � �

114

Unit- 4

Water Transport

Index

4.0 Objectives

4.1 Introduction

4.2 Subject Description

4.2.1 Scope and Importance of Water Transport

4.2.2 Development of Water Transport in India

4.2.3 Inland and Ocean Water Transport

4.2.4 Problems of Water Transport

4.2.5 Water Transport Policy

4.3 Summary

4.4 Self – Learning Questions

4.5 Answers to self learning questions

4.6 Keywords

4.7 Questions for Self Study

4.8 References for further study

4.0 Objectives:

Following are the objectives of this unit.

1. To understand the scope and importance of water transport

2. To study the progress of water transport in India

3. To take the review of Inland and Ocean Transport in India

4. To understand the problems or limitations of water transport

5. To study the Water Transport Policy of India.

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4.1 Introduction:

Water transport is contributing a lot in the economic development of India. We

have studied the role of road transport in economic development of India. Water

transport is very much useful for the International Trade. Shipping is an important

indicator of both commodity and services trade of any country. It plays an important

role in the Indian economy with around 95% of the country’s trade by volume and

68% in terms of value being transported by sea. As on 1st January, 2012, India had

a fleet strength of 1122 ships with Gross Tonnage of 11.06 million, the public sector

Shipping Corporation of India having the largest share of 36.17%. Of this, 372 ships

with 10.01 million Gross Tonnes cater to India’s overseas trade and the rest of

coastal trade.

4.2: Subject Description:

The unit Water Transport covers the scope and importance of water transport. It

also included the progress of water transport in India, progress of Inland and Ocean

transport, Problems of Water Transport and Policy for Water Transport.

4.2.1 Scope and Importance of Water Transport:

Water Transport is the cheapest mode of traffic for both long and short

distance. However, in ancient period, shipping was one of the big industries of India,

perhaps known as the Queen of Eastern Seas. Indians were much skilled in the

building of ships and used to go to different distance countries like Persia, East

Africa, Malaya and Eastern Island on their ships. In this context, Shri. S.L. Haja has

rightly stated that Indian Naval power was undoubtedly a great achievement of

Indian civilization.

Water Transport is considered as harbinger of modern civilization, a source of

employment and an active agent of progress and the development. Water transport

is the oldest and cheapest form for moving goods from one place to another place. It

operates on natural tracks and hence does not require huge capital investments in

the construction and maintenance of water ways. The path is provided by nature

and less investment is required in laying down the track and its maintenance. This

mode of transport has the largest carrying capacity and suitable for transport of bulk

goods over long distance.

The landmass in the world is connected with various waterways through ocean.

Due to this connectivity the water transport is considered as the best means for

transport of bulk commodities. This form of transport is extensively used for the

116

international trade. Ocean transport is favourable because of geographical fact that

the ocean and seas are interconnected. British Empire could establish several

colonies all over the world due to its well-developed, wall-equipped overseas water

transport system. Water transport can easily carry goods and commodities of low

values. After discovery of various ocean routes, the economic importance of these

routes has been increased significantly. Oceans are considered to be the cheapest

and the safest highway to carry passenger and cargo. Water transport can be

classified into Inland water transport and Ocean transport. The major characteristics

of water transport are as follows:

1. Cheapest mode of Transportation: Water transport is the cheapest mode

of transportation as compared to Rail, Road and Air transport. To build the roads,

railway lines the huge capital investment is required. All types of waterways are

natural gift, so they are not required the capital investment.

2. High Capacity of Transportation: Basically, the water transport is used

for the long distance and heavy freight transportation. As against from the rail and

motor transport the freight transportation capacity is less. So all over the world the

water transport has given the priority for heavy transportation.

3. Less Consumption of Fuel: The important feature of water transport is

this mode of transporatation is fuel efficient. In the Ancient era the small ships were

used for the transportation, and these ships are working without fuel. Today also the

small ships which are using for the fish catching, they are depending on the wind

flow only. As an impact of modern technology, today we are operating very large

ships with the machine. So water transport has got the speed for travelling. But, the

cost of fuel is also less rather than the other modes of transportation.

4. Consumption of Foreign Goods: The trade between two or more

countries is possible to take place due to availability and development of water

transport. The different countries are producing the different types of goods due to

geographical differentiation and scientific revolution. No any one country is possible

to produce all kinds of commodities with their own. So, it is possible from the water

transport. Today the country like India importing the different types of goods and

commodities from the different countries with the help of water transport.

5. Development of International Trade: International trade is contributing a

lot in the development of an economy. Railway and Road transport get boost to the

internal trade. The development of water transport is the pre condition of the

development of international trade. From the ancient India is importing and exporting

the different types of goods and commodities to the various countries in the world.

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The large sized and modern ships are working for the import and export business.

The development of International trade giving the support to economic development

of the country and it is very much important to increase the prestige of the country in

the world market.

6. Less Maintenance Cost: The maintenance cost is very much less in the

water transport as compared to Rail and Road transport. There is not necessary to

build the roads or the railway lines in the water transport. So the maintenance cost

of waterways is zero. It is also not needed to make provision of separate system for

the maintenance. The cost of maintenance of ships is also very less. So water

transport is called as the cheapest mode of transport.

7. Support for Industrial Progress: The progress of Industrial sector is also

depending on the development of transport sector. The supply of raw material and

the inputs to the industrial sector and the finished products carry upto the market

places is get possible due to availability of means of transport and communication.

The progress of Industrial sector of United Kingdom, Holland, Belgium, France,

America, Germany, Japan and Portugal were possible due to the only availability of

water transport. In the economic reforms period the concept of ‘world is a Village’ is

accepted by the whole world. So, now it is possible to every country to trade the

industrial products with any country in the world with the help of the water transport.

8. Increase in International Cooperation: The water transport is important

for the increase in the international cooperation. The various countries get possible

to import and export goods and commodities to each other with the help of water

transport. International trade can fulfill the needs of the different countries. So the

countries of Great Britan, Australia, Silon and Japan are closed to each other.

9. National Defense: Water transport is contributing a lot in the national

defense. The heavy machinery and other material related to defense can transport

with the help of water transport. This transport is economically beneficial.

10. Employment Generation: The country like India facing the chronic

problem of unemployment. To solve this problem water transport is performing a

well. Water transport providing the direct and indirect employment opportunities to

the rural and urban youth. Inland water transport and Costal shipping provides the

passenger and freight transport. At the sea shower number of small business are

established, these business are creating the self-employment. The fish processing

industry also developed at the sea shower.

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11. Development of Tourism Industry: Now-a-day the tourism industry is

developing rapidly at the coastal area. The role of water transport is important for

the development of Tourism Industry. The tourists can take the advantage of costal

travelling.

4.2.2: Growth of Water Transport in India:

India is endowed with natural navigable river systems, which assisted the

growth of transport sector from time immemorial. It is more an economical mode

than other modes of transport. The long coastline and main rivers flowing down

hundreds of kilometers throughout the years provided the means of conducting

domestic as well as international trade from earliest time. In 1829, H.T.Prinsep,

secretary to the East India Company referred to the State of inland navigation as

“there is no rivers in the World, unless those of China be exceptions, on which there

is so large a navigation as on the Ganges and its tributary streams”. Major Rennel,

writing in 1780, reckoned that “no less that 30,000 boatman found their livelihood

from this source and as that was a time when trade was far less flourishing than at

present”.

During 1860 to 1925, there were 102 Indian Shipping Industries but gradually

all of them were destroyed by British. Scindia Team Navigation company was

established in 1919. The history of Indian Shipping Companies from 1925 to 1945 is

in-fact the history of Scindia Shipping Company. In 1945, Government of India

constituted a ‘Reorganisation Policy Sub Committee’ under the chairmanship of

Shri. C.P.Ramaswami Aiyyar who suggested that all the coastal trade of India

should be reserved for Indian ships and suitable opportunity should be given to the

Indian ships in foreign trade. In 1947, the Shipping Act was enacted and it was

compulsory for the ships to obtain licenses. Eastern Shipping Corporation was

established with a capital of Rs. 10 crores in March 1950. In June 1956, Western

Shipping Corporation was set up. Similarly, in 1961 two corporations were merged

into Indian Shipping Corporation with an authorized capital of Rs. 35 crores and a

working of Rs. 23 crores. New Shipping Corporation of India and Mogul Lines are

operating under public sector and 33 companies under private sector.

First Five Year Plan and Water Transport: At the beginning of the 1st Five Year

Plan, India had ships of the capacity of 2.17 lakh gross registered tonnes for coastal

trade and ships of 1.174 lakh gross registered tonnes were traded across the sea.

Rs. 18.7 crores were spent for development of Indian Shipping under the 1st five

year plans. By the end of the plan, the capacity of Indian ships increased to 4.8 lakh

gross registered tonnes. During the first five plan “Ganga-Brahmaputra Water

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Transport Board” was established as a joint programme of Central Government and

states of Uttar Pradesh, Bihar, West Bengal and Assam. The main objective of this

project was, to establish the co-ordination between the states for their efforts for the

development of water transport within the Ganga and Brahmaputra rivers.

Second Five Year Plan and Water Transport:

During the 2nd five year plan, Rs. 52.7 crores was spent on the development of

Indian Shipping. It fixed the target of increasing the capacity of ships to 9 lakh gross

registered tonnes. But the capacity of 8.77 lakh gross registered tonnes could be

achieved, out of which 2.92 lakh gross registered tonnes were for coastal trade. The

National Ship Board was established in March 1959 to guide the Government of

India for the promotion of shipping.

Third Five Year Plan and Water Transport:

Rs. 66 crore were the provision for the water transport development in the third

plan. But Rs. 41 crores were spent on the development programmes of shipping in

this plan. It was envisaged to increase the capacity of Indian Shipping to 15.4 lakh

gross registered tonnes, but the capacity of only 10 lakh gross registered tonnes

could be achieved. The efforts had been taken in this plan for the development of

water transport of the Ganga-Brahmputra, Roopnarayan, Mahanadi, Narmada and

Tapi rivers.

Fourth Five Year Plan and Water Transport:

The capacity of Indian Shipping was increased by 3.3 lakh gross registered

tonnes by the end of 1968-69 i.e. under three annual plans the tonnage capacity of

the Indian Shipping increased to 21.4 lakh gross registered tonnes by March 1969.

The fourth plan envisaged the target of 34 lakh tonnes. Rs. 135 crores were

provided for purchasing ships. Under this plan, Haldia Godi plan, Bombay Godi

Expansion plan, Tel Godi plan in Madras and Tuticorin Port Scheme were

completed. Rs. 5 crore was provided for the provision of technical consultancy for

the Central Inland Water Transport Board.

Fifth Five Year Plan and Water Transport:

Rs. 5.44 crore were allocated for the development of ports in the fifth five year

plan. The for the Indian Shipping was 65 lakh ‘GRT’ upto March, 1979. Outlay for

the central sector was kept at Rs. 40 crores. In addition, a provision of Rs. 22 crores

was made for the Farakka project.

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Sixth Five Year Plan and Water Transport:

The sixth plan proposed to increase the total tonnage from the present 5.6

million tonnes to 7.8 million tonnes by 1984-85. The total provision of expenditure for

this purpose was Rs. 720 crores. Outlay for Inland water transport was amounting to

Rs. 45 crores.

Seventh Five Year Plan and Water Transport:

Central Government and State Government made provision of Rs.225.73 crore

for the development of Indian Water Transport. Out of this outlay, Rs. 155 crore in

the central sector and Rs. 70.73 crores under state and union territories were

provided. In this way, the outlay of this sector under Seventh plan is more than

double the expenditure incurred in the six plan. Some of the major Central Sector

schemes are acquisition of vessels by Central Inland Water Transport Corporation,

Development of Rajabagan Dockyard, Hydrigraphic surveys of important water

ways, acquisition of surveys launches, development of national water ways and

setting up of Inland Waterways Authority of India. The programme of CIWTRC

consists of acquisition of 83 new vessels.

Eighth Five Year Plan and Water Transport:

The Eighth plan has the main objective of acquisition of a modern, diversified

fleet capable of fulfilling the national objective of export promotion and improve

balance of payments. It also aims at the scrapping of obsolete vessels acquisition of

modern fuel efficient vessels, and restructuring of shipping companies. Total outlay

for shipping has been of Rs. 3668.91 crores.

Ninth Five Year Plan and Water Transport:

Rs. 9428 crore provision was made in the ninth five year plan for the

development of Water Transport. Out of this outlay Rs. 4839 crores were allotted for

the port development.

Tenth Five Year Plan and Water Transport:

Tenth five year plan accepted the formula of BOT. Rs. 5415 crores were the

provision for the development of water transport. For the fulfillment of the

Government plans the Rs. 11257 crores investment from the private sector was

expected. The main objective of the tenth plan was increased the cargo handling

capacity of major ports in India. The handling capacity of the Indian Ports in the year

1951 was 20 million gross registered tonnes, and it was increased upto the 2008-09

574.77 million gross registered tonnes.

M.A. II- Economics- Economics Transport and Communication

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4.2.3: Inland and Ocean Water Transport:

There are three kinds of water transport i.e. Inland Water Transport, Coastal

Transport and Oceanic or Overseas Transport.

A) Inland Water Transport:

India has about 14,500 k.m of navigable waterways, which comprise rivers,

canals, lakes, backwaters and creeks. Inland water ways have greatly expanded

during 20th century in many countries in the world. It is playing an important role in

internal trade and commerce in many countries. Inland water ways may be natural

such as navigable rivers or lakes or may be artificial such as canals. Many rivers

provide natural water ways, which can be used for providing transport services

through small boats as well as big barges. River transport was one of the oldest

modes of the transport. It played a very important role prior to the development of

modern means of land transport.It provides transport facilities to inaccessible forest

areas and other natural regions not connected by roads.

About 45 million tonnes of cargo is being moved annually by Inland Water

Transport in India. It is a fuel-efficient and environment-friendly mode of

transportation. Its operations are currently restricted to a few stretches in the Ganga-

Hugli Rivers, the Brahmputra, the Barak River (Assam), the rivers in Goa, The

backwaters of Kerala, inland waterways in Mumbai, and the deltaic regions of the

Godavari-Krishna rivers. Besides the organized operations by mechanized vessels,

country boats of various capacities also operate in various rivers, lakes and canals.

Canals are artificial waterways basically made for irrigation or navigation or for the

both. Canals can be sued as waterways for inland water transport, but huge amount

of capital investment is required in the construction and maintenance of such man

made artificial waterways. Apart from this, providing adequate water in the canal to

facilitate movement of big boats is considered as a big problem for this mode of

transport.

The main river systems of the country, which consists of the Ganga,

Brahmputra, Indus, Bhagirathi, Hoogly, Mahanadi, Godavari, Krishna, Kaveri,

Narmada, Tapi etc. have been used for the transportation of goods and passengers

for centuries. But, water transport thrives only in the state of West Bengal, Assam,

Andhra Pradesh and Kerala and to a limited extent in other states. By virtue of

geographical advantages in northeast regions of India the natural network of

waterways continues to flourish and steamer companies were organized on sound

commercial lines. Other regions where inland water transport operated successfully

were on the Krishna and the Godavari, where similar advantages were available.

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The backwaters of the West Coast also supported an active water transport system.

After the introduction of steam vessels, water transport was developed in northeast

India during the early part of 19th century.

The State wise length of waterways in India is showing in the table no 4.1

Table No- 4.1

Length of Inland Waterways in India (k.m.)

State River Canal Total

Uttar Pradesh & Uttranchal 2268 173 2441

West Bengal 1555 782 2337

Andhra Pradesh 309 1690 1999

Assam 1983 -- 1983

Kerala 840 708 1548

Bihar & Zarkhand 937 325 1262

Orisa 761 224 985

Karnataka 284 160 444

Goa 317 25 342

Maharashtra 309 -- 309

Gujrat 286 -- 286

Tamilnadu -- 216 216

Jammu-Kashmir 200 -- 200

All India 10049 4303 14353

Development of Inland Water Transport connected from the Second Five Year

Plan and up to the end of Fifth five year plan, the total expenditure on this sector

was Rs. 34 crore. It was only in the sixth plan that this sector was given priority and

specific schemes of inter-State and National importance for development of inland

water transport were taken up. The seventh plan was an important landmark in the

development of inland water transport.The expenditure on this sector in the Plan at

Rs. 131.85 crore was more than the expenditure incurred right upto the end of the

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Sixth Plan. Three objectives were laid down in the Eighth plan for the development

of inland water transport. a) development of inland water transport in the regions

where it enjoys natural advantage, b) improvement in the productivity of assets

through modernization of vessels and country crafts to suit local conditions, c)

building up of trained and skilled manpower for inland water transport operations.

Ninth Plan efforts were made to make inland water transport as acceptable mode of

transportation by reduction in cost and time of transportation and enhancement of

safety and reliability of the cargo. The Inland Water Transport policy approved by

the government in January 2001 aims at giving aboost to the development of this

mode of transport. An outlay of Rs. 903 crore was approved for inland water

transport in the Tenth plan, against which an expenditure of Rs. 275 crore was

made. The focus of the Eleventh Plan was on putting requisite infrastructure on the

existing waterways to make them fully fuctional. In addition, three more waterways

taking their coverage to 4500 kms.

Advantages of Inland Water Transport:

1. Cheapest mode of Transportation

2. It is one of the most efficient modes of transport from the point of view of energy

consumption

3. It can provide immediate access wherever water exists without requiring

investment in line with capacities as in other mode of transport.

4. It is the labour intensive mode and generates more employment opportunities.

5. It provides transport for heavy, bulky, non-perishable and low-grade traffic with

a low price relative to weight where speed is not an important factor.

6. It provides economical means of transportation of minerals and other bulky dry

and liquid raw materials for industries.

7. It does not require the investment of ways and maintenance.

8. In mountain areas, inland water transport provides excellent service for downhill

movement of goods and passengers.

National Waterways in India:

1. The Ganga between Allahabad –Haldia (1620 km)

2. The Sadiya – Dhubri stretch of the Brahmaputra (891 km)

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3. The Kollam- Kottapuram Stretch of West Coast Canal along Champakara and

Udhyogmandal Canals (205 km) in Kerla.

B) Coastal Transport and Ocean Transport/ Overseas Shipping:

India has a long history of Shipping. The Scindhia Steam Navigation Company

was set up in 1919 on modern lines. At the time of Independence, there were only

59 ships with less than 2 lakh tonnes of Gross Registered Tonnage. Since

Independence, India has made a significant progress in shipping and the shipping

fleet had 872 ships (282 overseas and 590 coastal vessels. At present, shipping

plays a major role in the transport sector of the country’s economy. Nearly 92% of

the total trade volume is moved by sea making shipping the backbone of trade and

economic growth.

Coastal Shipping:

Coastal Shipping is the most energy efficient and comparatively cheaper mode

of transport for carriage of bulk traffics over long hauls, particularly when the origin

and destination of a traffic stream is located along the coast. India has a long

coastline of 7517 kms. Therefore, coastal shipping holds a great promise more so

because it is the most energy efficient and cheapest mode of transport for carriage

of bulky goods like iron and steel, iron ore, coal, timber etc. over long distance.

However, despite this fact, there was a sharp decline in coastal shipping operations

during 1960s and 1970s. The main factors affecting the growth of coastal shipping

adversely were high transportation costs especially for movement other than those

between a pair of water front locations, port delays, poor turnaround time of coastal

ships on account of overaged vessels, and lack of mechanical handling facilities,

etc. The coastal fleet is ageing fast. Also, there is imbalance in coastal traffic

movement as traffic is not equally available in both directions. This makes it

necessary for coastal ships to sail in ballast, at time on return journey. Moreover,

slow handling of the cargo at port undue port delays inflict heavy losses on shipping

companies.

Advantages of Coastal Shipping:

1. It reduces the pressure on rail and road transport systems

2. It is relatively pollution free

3. It is less capital intensive

4. It provides large employment

5. It is the cheapest mode of transport

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6. It promotes coastal base industries such as fisheries and corals collection

7. It promotes tourism.

Ocean /Overseas Shipping:

Navigation through the open sea is known as ocean or oversea transportation.

Navigation along indented or broken coastline is known as coastal shipping. Coastal

shipping is synonymous with domestic shipping by sea between two points in the

same country. Ocean transportation is in fact an extension of coastal shipping to

wider expanses of water. So, as far as the transportation of goods is concerned

inland water transportation and the coastal shipping are national and intra-regional

importance.

Ocean transportation is very significant and vital for growth of international

trade. As a result, the share of Indian Shipping in the transportation of India’s

overseas trade has slowly and consistently increased in the planning period.

Presently almost 95% of the country’s trade volume (68A% in terms of value) is

moved by the sea. India has one of the largest merchant shipping fleet among the

developing countries and ranks 16th amongst the countries with the largest cargo

carrying fleet with 10.11 million gross tonnage as on August 31, 2010 and average

age of the fleet being 18.03 years. Ocean transport has its origin in the beginning of

human civilization. It is considered as an indispensable means for development of

foreign trades. It has brought different parts of the world closer for developing one

big world market. On account of its operation in natural ocean tracks, this form of

transport generally requires no infrastructure investment for providing transport

facilities.

Factors determining Ocean routes:

1. Suitable weather condition

2. Deep Water

3. Availability of Harbors and Ports

4. Availability of full load of traffic

5. Availability of cheaper route and fuel supplies

6. Shipping Service.

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Types of Ships:

1. Single Deck Vessels: Such vessels have one continuous deck, which means

easy access with one hatch for each hold.

2. Twin Deck Vessels: Such vessels have additional decks below the main deck,

running the full length of the vessel.

3. Shelter Deck Vessels: These vessels have additional deck above the main

deck’s shelter deck, which provides more under deck-space for carrying light

cargoes.

4. Other Types:

a) Unitized Cargo ships and specialized vessels: These type of vessels include

pallet vessels, barge carriers, container ships, RO/LO ships, OBOs, O/Os, gas

carriers, wood carriers, car carriers, oil tankers, refrigerator ships etc.

b) Roll-on-Roll-off ships: Ferries are now employed on a multitude trade routes

based on Roll-on-Roll-off concept. This facilitates loading and unloading of all

types of cargoes which can be rolled on horizontally including cars, Lorries, and

other wheeled type of cargoes.

c) Barge ships: Barge ships are standard sized ships, which can be towed or

pushed by tugs into ports and island water ways and which can be hoisted

abroad special Barge carriers with adopted equipment for the Sea voyage.

d) Cellular Ships: Such ships have holds designed to form a series of cells into

which the containers are placed.

e) Panamax: The bulk carriers with a breadth which can pass through the Panama

Canal are described as the panama type.

f) Bulker/container carrier: The container or bulker is a recent development.

g) Very large crude carriers/ Ultra large crude carriers

Major Ports in India:

Ports are the vital link in the trade between nations. Continuous modernization

of ports and ungradation of port infrastructure are important to increase the

productivity and efficiency of ports. At present, there are 12 major ports and 200

non-major ports along India’s coastline. Because of their importance for coastal and

overseas shipping, special efforts have been made in the plans for the development

and modernization of existing ports and establishment of new ports. The National

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Harbour Board was set up in 1950 to advise the Central and State governments on

the management and development of ports, particularly minor ports. Major ports are

the direct responsibility of the Central government while non-major ports are

managed and administered by the respective State governments. The total capacity

of Indian ports has reached approximately 1160 million tonnes as on 1 January,

2012. During 2009-10 and 2010-11, traffic at major ports attained a growth of 5.67%

and 1.59 % respectively over the previous year. The American Association of Port

Authorities, ranks Shanghai at the top with regard to total cargo volume handled in

2009 relegating Singaport from its first position of 2008 to second position. Madras

Port and Jawaharlal Nehru Port Trust are ranked 55th and 56th in 2009 in terms of

total cargo volume, up from 70th and 71st position in 2008. Followings are the major

ports in India:

1. Mumbai: Mumbai is the largest and most important seaport along the

western coast of India. It was developed by the British in 1672 as a substitute to the

Surat seaport. It has a natural harbor about 12 meters in depth. This port is situated

near the Arabian Sea and has a magnificent 20 km, 10 km. wide and 25.50 feet

deep long natural harbor. This port is traditionally referred to as “Gateway of India”.

It is the largest and centrally located port in the West Coast in Maharashtra. It has

good infrastructure facilities including modern equipment for material handling and

warehousing facilities. It is connected to all parts of the country through rails and

roads. It has a vast hinterland, stretching over Maharashtra, Gujarat, Madhya

Pradesh, Delhi, Haryana, Uttarakhand, and Uttar Pradesh. The main exports of

Mumbai seaport include cotton- goods, cotton yarn, electrical goods, machinery and

vehicles while fertilizers, chemical, electronic goods, machinery, paper, pulp,

petroleum, petroleum-products, and raw-cotton are the main items of imports. There

are main three docks in this port, i.e. Princes Dock, Victoria Dock and Indira Dock.

The port maintains its own railway system, which serves the docks, local stations

and large numbers of sidings on the Port Trust estates.

2. Kolcutta (Haldia): The Kolkatta-Haldia port is situated along the Hugli

River. The port has a large hinterland which covers the seven states of Bihar,

Chhattisgarh, Jharkhand, north-east India, Orissa, and eastern Uttar Pradesh. This

is second largest port of India and the biggest terminal port in South Asia. The

metropolitan district of Kolkatta has also the hinterland of the port is considered as

the largest industrial and trade area of the country. This port is located on the left

bank of the river Hoogly, about 129 kms downstream from the confluence of the

Bhagirathi and Bhaireb, Jalengi, the two spill channels of the parent river Ganga.

The main export of the port include bones, bone-meal, bunker-oil, electric goods,

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iron and steel, jute products, lac, leather goods, machinery, mica, scrap, tea, and

timber. The main imports include edible-oils, fertilizers, machinery, railway

equipments and petroleum.

3. Chennai: This is an artificial harbor of about 81 hectare, encroaching into

sea upto meters contour from low waterline, enclosed with breakwaters and quays

on all sides. This post is situates along the northern coast of Tamil Nadu. The harbor

has an entry from the north. It can accommodate 22 vessels. The main exports from

the Chennai port are food-grains, hides and skins, iron-ore, mica, oil cake, sugar,

turmeric, timber and tobacco. The port imports chemicals, coal, cotton, cotton-

goods, edible-oils, fertilizers, iron and steel, machinery, metals and petroleum. The

hinterland of the port covers Tamilnadu, Andhra Pradesh, Kerala and Karnataka.

This port is also connected by national and state highways and has adequate

railway network.

4. Vishakhapatnam: This port is a well-protected deep-sea port on the east

coast of India in Andhra Pradesh. Its hinterland comprises of an area of about 341

thousand sq. kms. It has a huge hinterland in the states of the Andhra Pradesh,

Chhattisgarh, and Orissa. The port is opened to ocean going vessels in 1933. It is

the natural harbor in the country. This port ranked first in India for the last Six years

in respect of Cargo traffic. Its main imports are petroleum, fertilizers, chemicals,

machinery and metals, while iron-ore, manganese ore, leather goods, timber and

food-grains are the main items of exports. The port can accommodate 17 vessels at

a time. There are 4 quay berths on eastern side of the northern arm for

accommodating four ocean going vessels at a time, two oil refinery berths for

berthing two oil tankers on the northern side of the western arm and three jetty

berths, which can accommodate three ships.

5. Cochin: This port is situated along the coast of Kerala, Kochi is a natural

seaport, giving access to about 201 sq. km of navigable breakwaters, Cochin port

affords even in the worst monsoon accommodation for vessels which can lie

comfortably in the harbor and carry on landing and shipping operations without

interruption. It remains open for cargo traffic throughout the year. Being situated

close to the Suez-Colombo route, it has great commercial and strategic importance.

The main items of export are cashew-kernel, coconut, coir goods, copra, oil

lubricants, rubber, fish and sea products, while the main imports include chemicals,

coal, cotton, edible oils, fertilizers, iron and steel, machinery and metals. This port

plays a vita role in the economy of south India. Its hinterland includes the whole of

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Kerala, large areas of Tamilnadu, and some parts of Karnataka. The port is a natural

gateway to the vast industrial complexes and developing market of the south India.

6. Tuticorin: As a port with maritime trade, Tuticorin Port is much older than

Chennai, having been in existence with a flourishing trade in fisheries from the time

of the Pandeyan Kings. This port has been developed about 8 km to the south to the

old Tuticorin port. The port has an artificial deep sea-harbour. It has a rich hinterland

comprising the districts of Kanniyakumari, and Ramanathapuram. It is well

connected with Railways and National Highways. Its main exports include

cardamom, cotton, cotton goods, hides and skins, while the main imports consist of

coal, fertilizers, hardware and machinery.

7. Mangalore: This port has situated along the coast of Karnataka, it was

developed about 9 km to the north of old port of Mangalore. The port is linked

through Broad Gauge railway line and the National Highway NH-17 with Mumbai.

The building cost of Mangalore port was Rs. 22 crore were undertaken during third

five year plan of India. It was declared as a major port in June 1974. It is located at

Panambur, north of Gorupur River, which lies in the western part of India on the

stretch of coastline between Marmagao and Cochin ports. The main exports of this

port are cashew-nuts, coffee, forest products, iron-ore, manganese-ore, and timber,

while the imports include crude oil, fertilizers, machinery, and petroleum and

petroleum products.

8. Kandla: This port is at the head of the Gulf of Kutch, Kandla seaport was

developed after Independence to take up the Karachi which went to Pakistan. It is a

tidal harbor in the Kandla Creek with an average depth of 10 meters. The port has a

vast hinterland in the states of Gujarat, Rajasthan, Haryana, Punjab, Himachal

Pradesh, and Jammu and Kashmir. Its main imports are petroleum, fertilizers,

phosphates, and sulphur, while the export includes bones, cotton, food-grain,

naphtha, salt and sugar. A free trade zone was created at Kandla in 1965 at a

distance of 96 kms from the Kandla port as an export promotion measure. The port

has a vast hinterland of 2,56,000 sq. kms., which comprises of Rajasthan, Punjab,

Haryana, Delhi, Himachal Pradesh, Jammu and Kashmir, Western Uttar Pradesh,

Madhya Pradesh and Gujarat.

9. Jawahar Lal Nehru Port (Nhavasheva Port): It was commissioned in

October 1989 as a major computerized port near Mumbai with a cost of over Rs.

600 crore. It was constructed mainly to handle container traffic and relive the

Mumbai port from congestion. This port situated about 14 km to the south Mumbai.

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It is a world-class port equipped with all the modern facilities. The seaport is

connected by a four-lane Highway with the hinterland.

10. Paradwip: This port was declared as a major port in April 18th , 1966. At

first, it was developed by the Government of Orissa, in November, 1962, but later on

transferred to Central Government with effect from June 1st , 1965. It is the nearest

deep-sea port for the export of iron ore and other minerals from the mineral belts of

Orissa, Bihar and West Bangal. Paradeep has the deepest harbor in the country. It

exports cotton goods, iron-ore, iron and steel, manganese and scrap, while the

imports include petroleum products, edible oils, machinery and electric goods.

11. Marmagoa: Situated at the entrance of the Zuvari-estuary in Goa, it is the

leading iron –ore exporting seaport of the country. It also betel-leaves, cashew-nut,

manganese and salt. The main imports include manganese, cement, crude-oil,

fertilizers, and machinery. This port has great natural advantages, as it is capable of

berthing large steamers with mechanical ore handling facilities. The port has a quay

of 925 metres long protected by the breakwater and a mole.

12. Ennore: This port is situated about 20 km to the north of Chennai, Ennore

is a natural harbor. It was developed to ease the pressure of the Chennai-seaport.

Ennore exports hides, machinery, mica, rice and sugar. The principal imports are

cement, cotton, edible oil, fertilizers, machinery and petroleum products.

Medium and Small ports:

There are 185 medium and small ports in the country. These ports contributing

a lot in the water transport. The ports are located at the different parts of the various

states. i.e. Gujarat (40), Maharashtra (53), Goa (05), Div and Daman (02),

Karnataka (09), Kerala (13), Lakshadeep (10), Tamilnadu (14), PAndecherry (01),

Andhra Pradesh (12), Orissa (02), West Bangal (01), and Andaman and Nikobar

(23).

We can explain the development of water transport in India with different types.

In this respect the total number of ships, water transport from the Indian ports and

foreign ships, coastal transport ect. Factors are very important. The strength of

Indian ships is given in the table no. 4.2

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Table No: 4.2

Strength of the Indian Ships

Year

Coastal Trade Ocean Trade Total

No. of

Ships

Total

Tonne

No. of

Ships

Total

Tonne

No. of

Ships

Total

Tonne

1 2 3 4 5 6 7

2001 329 731367 228 6236390 557 6967757

2002 424 804868 193 5402456 617 6207324

2003 429 805594 196 5817544 625 6623138

2004 454 808392 215 6892568 669 7700960

2005 485 815759 236 7426800 721 8442559

2006 526 840719 250 7576774 776 8417493

2007 573 893139 277 8136411 850 9029550

2008 616 964311 296 8345992 912 9310303

Table No. 4.3

Water Transport from Indian Ports by Indian and Foreign Ships.

Year

Total Ocean

Transport

(Million cones)

Indian Ships

(%)

Foreign Ships

(%)

1 2 3 4

2001-02 275.83 16.70 83.30

2002-03 303.03 14.89 85.11

2003-04 346.32 12.8 87.2

2004-05 400.58 13.7 86.3

2005-06 451.39 13.8 86.2

2006-07 508.91 13.2 86.8

2007-08 (P) 596.22 9.0 91.0

132

Source: Transport Research Wing, M/o. Shipping, Road Transport &

Highways.

Note : Percentage were estimates based on the data received from the

ports and not based on the entire overseas cargo traffic handled.

Table No.4.4.

Ship Transport

Ocean and Inland Water Transport from important Ports of India

2000-01 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Quantity

Tonne

Quantity

Tonne

Quantity

Tonne

Quantity

Tonne

Quantity

Tonne

Quantity

Tonne

Quantity

Tonne

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Mumbai

Cargo 4598 33031 3672 27594 4290 28976 9675 74778 9336 66614 9443 63255 8873 68527

Indian 1497 12502 1815 13326 2380 14680 3746 18945 4869 24322 4466 18600 4820 22097

Other 3101 20529 1857 14268 1910 14296 5929 55833 4467 42292 4977 44655 4053 46430

Ships 394 98 293 83 468 131 669 172 1128 6332 1854 10058 1789 12621

Total Ships

4992 33129 3965 27677 4758 29107 10344 74950 10464 72946 11027 73313 10662 81148

Kolkatta

Cargo 1601 10333 1580 11170 1114 4071 1392 7992 2422 21563 5154 22233 1639 12822

Indian -213 -1527 -134 -882 -49 -44 -84 -605 -242 4983 -326 -5832 -209 -135

Other 1388 8806 1446 10288 1065 4027 1308 7387 16580 16580 1828 16401 1460 12687

Ships -- -- -- -- -- -- -- -- -- -- -- -- -- --

Total Ships

1601 10333 1580 11170 1114 4071 1392 7992 2422 21563 2154 22233 1639 12822

Paradeep

Cargo -- -- -- -- 525 7142 665 9346 823 11976 880 13755 879 129969

Indian -- -- -- -- 51 700 59 761 84 1200 96 1380 131 2403

Other -- -- -- -- 474 6442 606 8585 739 10776 784 12375 784 10566

Ships Total

-- -- -- -- 525 7142 665 9346 823 11976 880 13755 879 12969

M.A. II- Economics- Economics Transport and Communication

133

Madras Fort Sent Jorge

Cargo 6136 65103 6157 61970 6079 73858 7711 92336 9459 107844 9065 104083 8414 93464

Indian 3066 30699 2927 25719 2921 36722 2752 32444 3642 35640 3489 23945 2509 18550

Other 3070 34404 3230 36251 3158 37136 4959 59892 5817 72204 5576 74738 5905 74914

Ships -- -- -- -- -- -- -- -- -- -- -- -- -- --

Ships Total

6136 65103 6157 61970 6079 73858 7711 92336 9459 107844 9065 104083 8414 93464

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Coachin

Cargo 913 4747 279 2478 474 3948 406 3994 797 7326 1365 13660 619 8060

Indian 177 1138 26 215 108 849 82 1479 122 1519 192 2647 161 2014

Other 736 3609 253 2263 366 3099 324 2515 675 5807 1173 11013 458 6046

Ships 688 6230 409 3476 478 4284 697 5346 580 4800 593 5473 412 4784

Total Ships

1601 10977 688 5954 952 8232 1103 9340 1377 12126 1958 19133 1031 12844

Ahmadabad

Cargo 4290 28135 3283 31183 3499 60547 4101 34624 2856 15909 2685 19561 2299 15039

Indian 2662 9466 1892 4610 665 4254 1826 5954 1955 3133 1537 3704 1414 1380

Other 1628 18669 1391 26573 2834 56293 2275 28670 901 12776 1328 15857 885 13659

Ships 1445 1955 232 1034 -- -- -- -- -- -- 6 68 -- --

Total Ships

5735 30090 3515 32217 3499 60547 4101 34624 2856 15909 2871 19629 2299 15039

Kanaddla

Cargo 2544 15555 2972 18840 2976 19490 1492 10309 3563 25302 3895 27122 3104 21833

Indian 610 3928 243 1610 183 860 121 647 373 2371 498 2975 269 2009

Other 1934 11627 2729 17230 2793 18630 1371 9662 3190 22931 3397 24197 2835 19824

Ships -- -- -- -- -- -- -- -- -- -- -- -- -- --

Total Ships

2544 15555 2972 18840 2976 19490 1492 10309 3563 25302 3895 27172 3104 21833

Maramagoa

Cargo 1117 23276 992 28753 1207 36018 1512 54583 963 24753 1140 21905 1584 21183

Indian 735 6636 384 7454 315 2620 528 2551 361 2662 256 1584 653 2929

Other 382 16640 608 21299 892 33398 984 52029 602 22091 884 20231 931 18254

Ships -- -- -- -- -- -- -- -- -- -- -- -- -- --

Total Ships

1117 23276 992 28753 1207 36018 1512 54580 963 24753 1140 21905 1584 21183

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Table No. 4.5

Ship Transport

Import and export for Important Ports in India.

(‘000’ Tonne)

Important

Ports

2000-01 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Kolkatta

Total

Trade 23179 6821 26460 9344 30236 11024 33206 13001 30801 22342 38742 18540 38742 18540

Coastal

Trade 2925 4416 4371 409202 4657 3890 3908 4213 4392 4726 38742 18540 38742 18540

Foreign

Trade 20254 2405 22089 5252 25579 7134 29298 8788 26409 17616 -- -- -- --

Mumbai

Total

Trade 15079 9311 14027 10277 16055 10496 19764 11475 21915 11093 23404 13216 24835 12323

Coastal

Trade 2198 6624 12604 7127 1359 7533 2189 9721 1468 7661 1481 8512 2274 7832

Foreign

Trade 12872 2687 1423 3150 14696 2963 14575 3554 20447 3432 21923 4704 22561 4491

Chennai

Total

Trade 28548 12299 19605 14082 20302 16408 24745 19061 27203 20053 30759 22655 -- --

Coastal

Trade 15547 7033 7602 965 6495 1059 5793 1788 3956 1989 455564 1318 -- --

Foreign

Trade 13001 11566 12003 13117 13807 15349 18952 17273 23247 18064 26195 21337 -- --

Vishakhapatnam

Foreign

Trade 17005 18186 18544 20283 19305 21369 21290 24916 25495 25149 27929 23830 -- --

Coastal

Trade 4716 10016 4366 8889 3682 8079 2766 8992 3115 100076 2870 12176 -- --

135

Important

Ports

2000-01 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

Foreign

Trade 12289 8170 14178 11394 15623 13290 18524 15924 22380 15073 25059 11654 -- --

Cochin

Total

Trade 11061 2083 10899 2125 11119 2453 -- -- -- -- 18853 11306 19082 12889

Coastal

Trade 4783 1011 3670 1016 2750 798 -- -- -- -- 865 969 893 1567

Foreign

Trade 6278 1072 7229 1109 8369 1655 -- -- -- -- 17988 10337 18189 11322

Kandla

Total

Trade 31954 4787 30259 10374 31214 10309 32007 3545 35731 10177 39979 11732 46707 16516

Coastal

Trade 5250 387 3394 997 3308 1102 3754 890 4215 719 5645 1052 4814 1893

Foreign

Trade 26704 4400 26865 9377 27906 9207 28253 8655 31516 9458 35334 10680 41893 14623

Paradeep

Total

Trade 6840 13052 6991 16910 6705 18606 8438 21666 11424 21685 -- -- 16837 25583

Coastal

Trade -- -- -- -- -- -- -- -- -- -- -- -- -- --

Foreign

Trade 6840 13052 6991 16910 6705 18606 8438 21666 11424 21685 -- -- 16837 25583

Marmagoa

Total

Trade 3574 15938 4380 19269 4468 23406 5631 25028 6074 25614 7050 27191 7185 27943

Coastal

Trade 1016 125 1001 193 1227 80 847 287 555 359 624 203 638 404

Foreign

Trade 2558 15813 3379 19076 3241 23326 4784 24741 5519 25255 6426 26988 6547 27539

New Mangolare

Total

Trade -- -- -- -- -- -- 15512 18379 16519 17932 17922 14120 19625 16394

Coastal

Trade -- -- -- -- -- -- 4235 4172 3949 3602 4555 3098 2932 3139

Foreign

Trade -- -- -- -- -- -- 11277 14207 12570 14330 13367 11022 16693 13255

136

Important

Ports

2000-01 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

Import

Export

Total Major Ports

Total

Trade 82477 131165 139404 114071 157593 143071 175162 154045 204638 142590 173013 130188

Coastal

Trade 36435 23312 37008 23279 23478 22541 23492 28263 21650 29132 25346 45868 50293 33375

Foreign

Trade 100796 59165 34157 79385 115926 91530 134101 114808 153512 124913 146292 96722 122720 96813

Source – Directorate General of Commercial Intelligence & Statistics Ministry of Commerce.

4.2.4 Problems of Water Transport:

The problems of water transport in respect to the Inland and Ocean transport

are different. These problems are as follows:

A) Problems/Limitations of Inland Water Transport:

1. This kind of transport is slow in the speed as compared to other transport.

2. Navigable Waterways are not perennial in nature in many areas.

3. Scope of transport is less; it becomes very much limited in polar area because

freezing of water may cause hindrance.

4. Huge capital investment is required in construction, maintenance and dredging

operation of canals.

5. Climatic factors exercise greater influence in case of inland water transport.

6. Inland water transport can be used where speed and time are not important.

Perishable products cannot generally be transported by inland water transport

for a longer distance.

7. Most of craft used for mechanized operation are over-aged and inefficient.

8. Research and development along with training has not received due attention.

9. Shallow Water and narrow width of channels during dry weather, siltation and

bank erosion and lack of navigational aids affect free movement of vessels.

10. The irrigation cum navigable canals has a limited utility for navigation purposes.

11. They are not properly lined for the use by mechanized crafts.

137

B) Problems in Coastal Shipping Sector:

1. Over-aged vessels are fuel inefficient and involve high maintenance and

operating cost. This has increased transportation cost.

2. Coastal shipping carries low rated bulk commodities like coal, cement, salt for

which railway freight rates are lower with consequent consumer preference for

rail transport.

3. Inordinate delays at ports too have affected competitive advantage of coastal

shipping.

There are directional imbalances in coastal traffic movement. Thus coastal

vessels very often undertake empty movement.

C) Problems of Ocean Transport:

1. Over –aged fleets: Due to over-aged fleets the operating cost is high.

2. Lack of protection for Indian Shipping Companies.

3. Lack of Infrastructural Facilities: World ocean trade is moving towards

containerization. But, in India container fleet is almost negligible. Indian

shipping suffers from inadequate infrastructure support like ship repair facilities,

dry-docking, and cargo handling.

4. Under capacity utilization: Burdened with over utilization and under capacity,

Indian ports, the gateways of globalization may fail to achieve the goal of

attaining required export target in future. There exists a huge gap between the

present cargo handling capacity of the ports and the volume of traffic to be

handled in the future.

5. Low Productivity: The productivity achieved at Indian Ports generally falls short

of the international trade practice. The port cost of handling cargoes is also

much higher than that of neighboring ports like Colombo and Singapore.

6. Lack of Storage Facilities: The layouts of many berths are outdated along with

low draft and the storage area at the port is also insufficient. Though the ports

own vast land, there is usually a lack of back up area to poor layout and

utilization of port area for non-port activities.

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Inadequate dredging and container facilities:

Broadly, there are three agency involved in cargo handling at a port besides the

port authority. They are stevedoring-companies, custom authorities and transport

operators. Poor coordination between these organizations and different departments

of the port itself, results in duplication of works, poor dissemination of information ,

loss of time, poor equipment, space and vehicle allocation and utilization.

4.2.5: Water Transport Policy

Indian Shipping Policy:

Indian Shipping Policy aims at increasing self-reliance in the carriage of

country’s over-sea’s trade and reserving 100 % coastal trade to national shipping.

Following Liberalisation process, for promoting the development of Indian Shipping,

a new shipping policy was initiated in 1990-91. The salient features of this policy

were as under:

1. No approval is required for sale and acquisition of ships from an Indian

Shipyard.

2. Shipping companies are allowed to retain sale proceeds of their ships abroad

and utilize them for fresh acquisition. They are given freedom to time charters

out Indian Ships.

3. They are permitted to get their ships repaired in any shipyard without seeking

prior approval from the government.

4. Quartely Block Allocaation scheme for repair of ships has been dispensed with

entirely, and the Reserve Bank of India now releases foreign exchange for ship

repair/ dry docking and spares for imported capital goods without any value

limit.

5. Certain sections of Merchant Shipping Act have been amended to facilitate

Indian Shipping Companies to raise external commercial borrowings for foreign

ship acquisition.

6. As per the amendment to section 42 of Merchant Shipping Act 1958, from

October 1993 no prior permission from Director General of Shipping is required

for sale of vessels either for further trading or scrapping by the Indian Shipping

Companies.

7. The Multi Modal Transportation of Goods Act 1993 was introduced to facilitate

the exporters and give them a sense of security in transporting their goods.

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Door to door delivery is ensured by this Act, which reduces the logistic cost to

the exporter, making his products more competitive in International market.

Maritime Agenda for the decade 2010-2020:

Ministry of Shipping has prepared a Maritime agenda for the decade 2010-20 to

give a vision and road map for comprehensive development of shipping. The

agenda envisages to create, build and sustain the maritime infrastructural needs of

the country of the next decade. The overall vision of the Ministry as per the Maritime

agenda aims towards navigating and steering the Indian Maritime sector realistically

into the premier maritime nations of the world. This ten year period agenda of the

Ministry of Shipping covers the last two years of the 11th five year plan, the entire

period of 12th plan and the first three years of the 13th plan. This document basically

presents an agenda in the Shipping sector for consideration within overall objective

to increase efficiency of the delivery system and overall pace of growth in the sector.

Indeed, this is a pathbreaking document which will serve as road map for all ports

and shipping sector during the decade 2010-2020, which includes maritime sector

development by maritime states.

4.3 Summary:

Transport and Communication plays an important role in the economy. The

water transport is an ancient mean of transportation. In ancient period water

transport were using for the passenger and traffic transport. In era of globalization

each and every country in the world tries to develop the trade relations to another

country. The international trade is basically depends on the water transport. So, to

develop the water transport is the main objective of the every country. The capacity

of handling of freight and passenger is very high of the water transport. The cost of

operation and transportation of water transport is very less than other means of

transport.

The efforts for development of water transport in India have taken from the pre

–independence period. But, special efforts with the proper planning have been taken

from the Five Year Planning process. From the first five year plan to till 12th plan

Government has trying to development the water transport. The policies for the

water transport development also be changed with the changing nature and

challenges of the globalization. Government has spent the crores of rupees for the

development of port, inland, coastal and ocean transport. From last sixty years

Indian water transport has been strengthened with the modern technology, signaling

140

system, security, diversification in transportation, creation of steamers, ship building

factories etc.

There are three types of water transport: Inland water transport, Coastal water

transport and Ocean or Overseas water transport. There is continuous increase in

the inland and ocean water transport, but Indian water transport sector has various

weaknesses. Such as, low handling capacity, high cost of transportation, lack of

proper infrastructure, lack of modernization, more time required for the handling of

ship, lack of rail, road and port coordination, competition from the private ships, lack

of proper policy etc. So, it necessary to tackle the obstacles from the water transport

with the help of proper policy and implementation of the policy.

4.4 Self – Learning Questions:

A) Choose the correct answers from the following and rewrite the answer.

1. ----------------------- is the characteristics of water transport.

a) Speedy transport b) Costly transport c) Cheap transport d) useful for shorter

distance

2 2. The Steam Boat is firstly operated in India in ------------------

a) 1901 b) 1910 c) 1823 d) 1850

3 3. “Central Waterways, Irrigation and Water Transport Commission” has been

established in ----------------- year in India.

a) 1945 b) 1950 c) 1955 d) 1956

4. 4. The length of Inland Water Transport in India is -------------------

a) 15540 km b) 14440 km c) 14544 km d) 14900 km

5. 5. Jawaharlal Nehru Port Trust has opened for transportation in --------------------

a) 1910 b) 1990 c) 1991 d) 1989

M.A. II- Economics- Economics Transport and Communication

141

B) Answer in One Sentence

1. What are the types of Water Transport?

2. State the two limitations of Water Transport

3. What is the deep Port in India?

4. In which state Tuticorin Port has located?

5. Which port is known as a Western Gateway of India?

4.5: Answers of self learning questions:

A) 1) b 2) c 3) a 4) c 5)d

B)

1. Inland water transport and Ocean water transport.

2 . Old Ships, Lack of security, Wastage of time, Traditional technology etc.

3. Paradeep

4. Tamilnadu

5. Mumbai

4.6: Key words:

1. Steamers: The ships which run by the steam.

2. Port: The place of rest for the vessels.

4.7: Questions for Self Study:

A) Broad Questions:

1. Take a review of major ports in India.

2. State the scope and importance of water transport.

3. Take the review of progress of water transport in India.

B) Short Notes:

1. Water Transport Policy in India

2. Problems of Water Transport

3. Inland Water Transport in India

4. Ocean Water Transport in India

142

4.8 References for further study:

1. Bimalend Mishra and Choudhary, Transport Sector in India, Kalyani Publishers,

New Delhi, 1st edition, 1998.

2. Datta & Sundaram, Indian Economy, S. Chand and Company, New Delhi, 62nd

edition, 2010

3. Misra & Puri, Indian Economy, Himalaya Publishing House, New Delhi, 29th

edition, 2011

4. Economic Survey of India, Government of India, 2010-11

5. Directorate General of Commercial Intelligence and Statistics Ministry of

Commerce

� � �

143

Unit- 5

Air Transport

Index:

5.0 Objectives

5.1 Introduction

5.2 Subject Description

5.2.1 Need, Characteristics, Significance and Scope of Air transport

5.2.2 Growth and Problems of Air Transport

5.2.3 Pricing of Passenger and Air Cargo Transportation

5.2.4 Airports Authority of India

5.3 Summary

5.4 Key words

5.5 Self-Learning Questions

5.6 Answer to Self-Learning Questions

5.7 Questions for Self Study

5.8 Field Work

5.7 References for further Study

5.0 Objectives:

After studying this unit we will able-

i. To understand need of air transport in India.

ii. To learn significance of air transport in India.

iii. To learn characteristics of air transport.

iv. To understand scope of air transport in India.

v. To understand growth and problems of air transport in India.

vi To learn about pricing of passenger and air cargo transportation.

144

vii. To learn about Airports Authority of India.

5.1 Introduction:

In previous unit, we have studied scope and significance of water transport,

growth of water transport in India. The inland and ocean transport is also covered in

previous unit. Besides this, we have studied problems of water transport in India as

well as Government policy regarding water transport. In this unit, we will study the

need, characteristics, significance and scope of air transport in India, growth and

problems of air transport in India. Besides, this unit also covers the pricing of

passengers, cargo transportation and Airports Authority of India.

5.2 Subject Description:

Air transport being the most modern and the quickest mode of transport has

been gaining popularity. However, the exorbitant rates have made it the mode of

travel of the rich or of the business community for whom time is more expensive

than air travel. But the entry of private airlines and their various schemes have

reduced airfare drastically. The recent tax relaxation on air fuel and such sops will

further make air travel within the reach of a greater section of the Indian Populace.

5.2.1 Need, Characteristics, Significance and Scope of Air transport:

Need of Air Transport: Transport in the India is an important part of the

national economy. Since the economic liberalization of the 1990s, development of

infrastructure within the country has progressed at a rapid pace, and today there is a

wide variety of modes of transport by land, water and air. However, India's relatively

low GDP has meant that access to these modes of transport has not been uniform.

The 9th largest aviation market in the world is India. Taking the help of the

statistics from the Ministry of Civil Aviation, approximately 29.8 million passengers

traveled to or from India in 2008, showing a surge of 30% from 2007. The prediction

stated that international passengers will touch 50 million by 2015. More

opportunities in the aviation industry in India are likely to make way for about 69

foreign airlines from 49 countries. At present, private airlines account for around

75% portion of the domestic aviation market. India has perhaps a greater need for

air transport. It has a less extensive system of waterways and, while it has a large

rail system, it is in need of considerable modernization. And though it has a huge

network of roads, unknown percentages remain unpaved and there are but 200km

of expressway type roads in the nation. Unlike Brazil, that is struggling to get its

145

primary airports modernized in time for the upcoming Olympics and World Cup,

India has upgraded and added airports in an attempt to keep pace with air traffic

growth and fleet expansion. A booming aviation sector has come only recently to

India and the airlines, both domestic and foreign, continue to operate in a complex

and convoluted regulatory system.

Characteristics of Air Transport

1. Outdated Infrastructure: Despite ongoing improvements in the sector,

several aspects of the transport sector are still riddled with problems due to outdated

infrastructure, lack of investment, corruption and a burgeoning population. The

demand for transport infrastructure and services has been rising by around 10% a

year with the current infrastructure being unable to meet these growing demands.

According to recent estimates by Goldman Sachs, India will need to spend US$1.7

trillion on infrastructure projects over the next decade to boost economic growth, of

which US$500 billion is budgeted to be spent during the 11th FYP.

2. More Affordable Air Travel: Rapid economic growth in India has made air

travel more affordable. Air India, India's flag carrier, presently operates a fleet of 159

aircraft and plays a major role in connecting India with the rest of the world. Several

other foreign airlines connect Indian cities with other major cities across the globe.

3. Popular Domestic Air Travel: Kingfisher Airlines, Air India and Jet

Airways are the most popular brands in domestic air travel in order of their market

share. These airlines connect more than 80 cities across India and also operate

overseas routes after the liberalization of Indian aviation.

4. Untapped Large Part: However, a large section of country's air transport

system remains untapped, even though the Mumbai-Delhi air corridor was ranked

6th by the Official Airline Guide in 2007 among the world's busiest routes.

5. Low Cost Carriers: India's vast unutilized air transport network has

attracted several investments in the Indian air industry in the past few years. More

than half a dozen low- cost carriers entered the Indian market in 2004-05. Major new

entrants include Air Deccan, Kingfisher Airlines, Spice jet, GoAir, Paramount

airways and Indigo Airlines. To meet India's rapidly increasing demand for air travel,

Air India recently placed orders for more than 68 jets from Boeing for US$7.5 billion

while Indian placed orders for 43 jets from Airbus for US$2.5 billion.

146

6. Huge Investment: The Jet Airways, India's largest private carrier, has

invested millions of dollars to increase its fleet, but this has been put on hold due to

the recent economic slowdown. This trend is not restricted to traditional air carriers

in India. Indigo Airlines entered the limelight when it announced orders for 100

Airbus A320s worth US$6 billion during the Pairs Air Show; The highest by any

Asian domestic carrier. Kingfisher Airlines became the first Indian air carrier on June

15, 2005 to order Airbus A380 aircraft. The total deal with Airbus was worth US$3

billion.

7. Busiest Passenger Airport: Chhatrapati Shivaji International Airport in

Mumbai is currently India’s busiest airport in terms of passenger traffic. There are

more than 335 (2008 est.) civilian airports in India - 250 with paved runways and 96

with unpaved runways and more than 20 international airports in the Republic of

India.

8. International Airports: The Indira Gandhi International Airport and the

Chhatrapati Shivaji International Airport handle more than half of the air traffic in

South Asia. The Indira Gandhi International Airport in Delhi is India's busiest in

terms of the number of daily flights.

9. Heliports: As of 2007, there are 30 heliports in India. India also has the

world's highest helipad at the Siachen Glacier a height of 6400 metre (21,000 ft)

above mean sea level. Pawan Hans Helicopters Limited is a public sector company

that provides helicopter services to ONGC to its off-shore locations, and also to

various State Governments in India, particularly in north-east India.

10. Quickest Mode of Transport: Speed is the greatest merit of air transport

over land and sea transport. Air transport has brought the World closer and fact the

people can reach the other parts of the World within the shortest possible time. Air

transport is used as a very efficient means for speedy transport men, mail and

goods. Air transport being the most modern and the quickest mode of transport has

been gaining popularity. However, the exorbitant rates have made it the mode of

travel of the rich or of the business community for whom time is more expensive

than air travel. But the entry of private Airlines and their various schemes have

reduced airfare drastically. The recent tax relaxation on air fuel and such sops will

further make air travel within the reach of a greater section of the Indian Populace.

11. Linking Remote and Inaccessible Areas: This mode of transport does

not encounter the geographical barriers of earth’s surface like mountains, hills,

147

rivers, deserts, sea etc. and this allows the air transport to provide gradually faster

services. It has also the advantages of linking remote and inaccessible areas across

the world.

12. Weather Conditions: Weather conditions play a vital role in air

transportation. The meteorological elements have significant impact on aviation. The

sub tropical belts of high pressure are the most favorable and in most places, almost

ideal areas for aviation. Development of air transport requires better landing

equipment in the airports for safe landing of aircraft. Technological improvements

and aids like radar, de icing device, beacons for night flying and many other help in

developing the air transport.

Significance of Air Transport: (Advantages)

The Significances of air transport are as follows:

1. High Speed: Air transport is the fastest mode of transport and therefore

suitable carriage of goods over a long distance requiring less time. They maintain a

system of high speed transportation requirement of the government and of military in

war as well as in peace.

2. Urgent Transport: There is no substitute for air transport when the

transport of goods is required urgently. Air transport savings the time of

transportation, which is very significant in process of economic development. Trade,

commerce and other activities can be fulfils within shortest time.

3. Quick Service: Air transport provides comfortable, efficient and quick

transport service. It is regarded as best mode of transport for transporting perishable

goods. Better international understanding is essential for the welfare of the human

race. This requires frequent visit of top dignitaries of the nation to the other country

for international discussions and summit.

4. No Infrastructure Investment: Air transport does not give emphasis on

construction of tracks like railways, as no capital investment in surface track is

needed; it is a less costly mode of transport.

5. Easy Access: Air transport is regarded as the only means of transport in

those areas which are not easily accessible to other modes of transport. It is

therefore accessible to all areas regardless the obstruction of land. The air transport

aids the land transport in the economic development of areas where other means of

transport are practically absent. In regions where road cannot be constructed or land

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transport links cannot be established, this mode of transport is to be pressed into

service because of necessity. Settlement in various mining areas or in the snow-fed

areas is only possible because of air transportation links.

6. No Physical Barrier: Air transport is free from physical barriers because it

follows the shortest and direct routes where seas, mountains and forests do not

obstruct. The air transport aids the land transport in the economic development of

areas where other means of transport are practically absent. The difficulty, slowness

and high cost of land transport have encouraged the flying of some type of valuable

cargo and passengers by air.

7. Natural Route: Aircrafts travels to any place without any natural obstacles

or barriers. Because the custom formalities are compiled very quickly. It avoids

delay in obtaining clearance. In regions where roads are not constructed, the air

transport is to be pressed into service because of necessity.

8. National Defence: It plays a significant role in the national defence of the

country because modern wars are conducted with the help of aero planes. Airways

has an upper hand a destroying the enemy in a short period. The military

importance of air transport generally prompts the government to attach more

importance for the development of this sector. Air transport serves the boarder

areas to strengthen national security.

9. Employment Generation: An Air transport industry also creates

employment opportunities. Development of civil aviation offers jobs in its different

segments of operation. Skilled and semiskilled persons can be employed in a larger

scale with better coordination of road and air transport.

10. Increase Foreign Currency: A national airline can help in saving foreign

exchange. Receipts from foreign travellers, export freight and airport expenditure by

abroad airlines provide revenues of great value in terms of foreign currency for

various airlines. Its related economic benefits are enjoyed by smaller and less

developed countries. Economic gains are achieved by the use of air transport.

11. Market Extension: Air transport has prompted a number of firms to

expand their market at international level and introduce just-in-time innovative

distribution technique. The globalization of production market has contributed

significantly the growth of air transport.

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12. International Tourism: Air transport helps to developing world tourism by

offering attractive travel package to the people. The growth of export of floriculture is

possible because of speedy transport. Faster delivery of export products is required

because of its perishable nature and air transport fulfils this condition.

13. Relief Operations: Air transport immediate provides relief operations

during drought, flood, cyclone, tsunami and other natural calamities. When all the

land a route of a particular place is cut off due to natural and other calamities, air

transport is the only means of connect that area. At the time of drought, artificial rain

can also be affected by air crafts.

5.2.2 Growth and Problems of Air Transport:

Origin of Air Transport in India : In January 1911, the first airplane flight in

India took place and in February of that year the first ever carriage of mail was

affected in the World’s aviation history by a French pilot, who flew across the river

Yamuna from Allahabad to Naini, a distance 9.66 KM and delivered official mails.

The first proposal to use aviation for commercial purposes was made by Mr. G.R.

Clark, director general of Posts and Telegraph in August 1919. He suggested

starting a service for the carriage of mails. In the same year Indian Aircraft rules

were framed which came into effect from 1921. The growth of civil aviation industry

in India, by and large, influenced by the journey division of the then British

government. The British’s developed aviation in India not for the sake of this country

but for ruling this empire efficiently and profitably. Then the government of India

initiated the first air services in India in January 1920. It continued only for six

weeks. By an agreement with the air Ministry in 1925, imperial airways entered into

a contract to operate air services between England and India connecting the

London- Karachi service.

Growth of Air Transport after Independence

Air transport played a vital role in situation created by the refugee migration

which arouse in east and West Bengal in 1949 and the carriage of an

unprecedented volume of traffic between West Bengal owing to the cutting off the

surface route between these areas. During the year of 1948- 49, the GOI tried to

offer night mail and passenger services to their customers. As a result, the ground

facilities, the communication organizations and the navigation aids on the Delhi-

Nagpur- Madras and Bombay- Nagpur -Calcutta routes were improved. Air India

International was formed on 8th March 1948, exclusively for international services. It

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marked a progressive phase of Indian air transport. The GOI jointly with Air India

sponsored the new company with 49% of the paid up share capital contributed by

the government, 25% by the Air India and their associated and the remaining 26%

was acquired by the public. A weekly Bombay- London service via Cairo and

Geneva was inaugurated on the 8th June 1948 and in May 1950; a weekly service to

Nairobi via Aden was opened.

Growth of Air Transport after 1991

The stars of development and promise in the first decade of the 21st Century,

Brazil, Russia, India and China (collectively known as the 'BRICs') are being closely

watched by economists, seen as key indicators of the new world economy. They all

have large populations, abundant resources, generally stable politics and a rising

standard of living, each creating a new block of consumers. As has been proven

over and again, air transport networks are key to development, both internally and

with relation to the rest of the globe. Therefore the growth and health of this industry

can be one indicator of overall progress. Looking at the BRICs, we find vastly

different levels of infrastructure available to the aviation sector.

Table 5.1

Growth in Air Transport in India

Year Aircraft Movements in 000 Passenger in Million Cargo in 000 Tonnes

International Domestic International Domestic International Domestic

2005-06 190.89 647.4 22.36 50.98 920.15 483.8

2006-07 216.14 737.94 25.85 60.91 1028.66 531.64

2007-08 243.91 843.1 29.85 72.87 1151.05 584.61

2008-09 275.58 965.54 34.53 87.31 1289.26 643.31

2009-10 311.74 1108.39 40.01 104.75 1445.5 708.39

2010-11 353.09 1275.38 46.45 125.84 1622.33 780.6

2011-12 400.45 1470.99 54.04 151.36 1822.69 860.78

Source: Eleven Five Year Plan, GOI

Table 5.1 explains that the aircraft movements, passengers and cargo at

national and international level during 2005-06 to 2011-12. There were 190.89

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thousands and 647.4 thousands of aircraft movements at international and national

level in 2005-06. It was increased against 400.45 thousand and 1470.99 thousand in

2011-12. The numbers of passengers are also increased from 22.36millions and

50.98 million to 54.04 million and151.36 millions at international and national level

respectively during 2005-06 to 2011-12. Besides this transportation of cargo is

increased from 920.15 thousand to 1822.61 thousand tonnes at international level

during 2005-06 to 2011-12 and 483.8 thousand to 860.78 thousand tonnes at

national level during same period.

Though in some places aviation may play a greater role, like Alaska where

aircraft perform functions normally accomplished by surface vehicles, most high

functioning economies depend on more than just air transport for logistics. A

majority of goods and people travel by surface transport making aviation but one

part of the equation. So these other pieces of infrastructure are also closely allied

with aviation in development.

Table 5.2

Other Transportation Modes Global Rankings

Country Rail Rank Road Rank % Paved Waterways

China 3 2 80 1

India 4 3 n/a 9

Russia 2 7 79 2

Brazil 10 4 6 3

Source: CIA Fact book

Despite all the talk about their growing economic influence, there is only

minimal air connectivity between them. Brazil, because of distance, is linked to none

of its peers, with all passengers being routed over Europe, or increasingly, the Gulf.

For the other three, with much closer proximity, the weekly seat offers are

minimal. The 50,000+ seats between Russia and China are fewer than are operated

domestically in China between Guangzhou and Hangzhou—a route that ranks 80th

globally in terms of seats. This indicates that while the four nations are externally

viewed as some sort of “group”, their individual economies and populations are far

less interlinked.

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Table 5.3

New Aircraft Demand 2010-2030

Sr.No. Country Passenger

Aircrafts Demand

Value in US

Billion$

1 USA 5389 495.5

2 PRC 4041 545.1

3 Germany 1038 132.7

4 India 1019 141.4

5 UK 938 119.6

6 UAE 813 177.0

7 Brazil 701 82.3

8 Russia 689 72.8

9 Australia 609 80.2

10 Ireland 588 NA

Source: Airbus 2011

Current Travel Patterns and Global Rank

For the week in question (31-Oct to 06-Nov-2011), the top 100 international

routes for each of the four nations—400 city pairs—were analysed, a cumulative

total of 1,546,866 seats. In terms of each nation’s contribution, the leader is China,

while India has the second largest share.

M.A. II- Economics- Economics Transport and Communication

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Percentage, by country of total BRIC seats (31 Oct-6 Nov, 2011)

Source: CAPA - Centre for Aviation & Innovates

The top 100 leading international routes for the week in question generated

3,837,485 seats. In the next chart we use that number as a point of comparison for

each of the top 100 of the countries in the chart. Remember, these percentages are

not of global traffic but rather how their top 100 compares to the global 100. Looking

at the UK, its top 100 generated a seat total that is roughly 22% of the

corresponding global total, making it a truly global aviation centre.

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Percentage of global international seats (31 Oct-6 Nov, 2011)

Source: CAPA

In looking at the graphs, bear in mind the bars represent the number of

destinations, not seats, though there is usually a close correlation. In the

supplement charts, the numeric positions are associated with ranking of the seat

offer between regional city pairs.

The Indian carriers offering international service continue to struggle for viability

and the regulatory framework as established only makes the goal of profitability

more remote. There is little to indicate that the current predominance of the Gulf

carriers will be diminished any time soon.

Asian aviation is growing strongly, with airlines expanding their seating capacity

by 7.4% this month May-2011, well ahead of the global 6% increase, according to

Innovated. The Indian Subcontinent is leading the Asian charge, while China is

surprisingly down in 18th place in terms of Asian growth rates, with just a 5.2%

increase in seats (domestic and international) in May 2011. Global air freight posted

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a 2.7 per cent contraction for the last month as compared to September 2010, but

air travel demand was strong in India and China which showed good domestic

growth.

Traffic results for the month of September show diverging trends for cargo and

passenger traffic, the International Air Transport Association (IATA) has announced.

Passenger traffic was 5.6 per cent higher than the same month last year and

stronger than the 4.6 per cent year-on-year growth recorded in August. Air freight on

the other hand posted a 2.7 per cent contraction for September compared to

September 2010. This is a further deterioration from the 2.4 per cent decline

recorded in August, IATA said in a statement released here.

Underlining the growth potential for air transport in India, the next ten years,

domestic air traffic is slated to touch 160 to 180 million passengers per annum, while

international passenger traffic will be 80 million. India is already the ninth largest and

fastest growing aviation market in the world that the country expected to be amongst

first five in the next ten years. But in global comparison of air travel penetrations

shows that India, at 0.04 air trips, per capita per annum stands far behind developed

countries with more than two air trips, per capita per annum. The importance of an

economic regulator to create a level playing field, to promote competition, protect

consumer interests and ensure better service levels. One of the key achievements

of India in the last decade has been to set-up an independent regulator for economic

regulation of airports by an Act of Parliament, with appropriate provision of an

appellate body. Deregulation of the domestic sector and liberalization of bilateral

traffic rights in the past decade has brought choices of carriers, choices of timings

and fares.

Outlining the importance accorded by the Indian government to the civil aviation

sector between 2005 -2010 US$ 10 billion have been invested in airport

development in the country. India has 128 airports, including 15 international

airports. Indian airports handled 142 million passengers in 2010-11 and 1.6 million

tonnes of cargo in year 2009-10. The CAGR for the domestic passenger and freight

growth over the last decade has been 14.2% and 7.8% respectively. The dramatic

increase in air traffic for both passengers and cargo in recent years has placed a

heavy strain on the country's major airports. Passenger traffic is projected to grow

more than 15% annually over 2011-13 and it is estimated that the aviation industry,

currently 9th largest in the World, will require 30 billion USD investments in the next

15 years to keep pace with the growing demand.

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Airport Infrastructure is Strained

Air traffic has been growing rapidly leading to severe strain on infrastructure at

major airports, especially in the Delhi and Mumbai airports which account for more

than 40 percent of nation’s air traffic. Air India (AI) posted a minor growth in

passenger loads and revenue in June this year. Compared to last year, when the

passenger load recorded was 69.3%, the airline registered a growth of around 3%

with 72.4% load. AI also carried 1,121 million passengers in June this year,

compared to 1,080 million during the same period last year. Its revenue also grew

from Rs.876 crore to Rs. 917 crore. AI has been earning revenue of Rs. 30 to 31

crore per day from passenger load. This figure dwindled in May to Rs. 25 crore per

day due to the pilots' strike. The growth is minimal compared to the losses the airline

has been suffering. Its losses have grown from Rs. 5,552.44 crore in 2009-10 to Rs.

6,994 crore in 2010-11. Air India's performance has improved in terms of passenger

load factor and revenue yield per KM in June as compared to the corresponding

month last year. The national carrier, however, is facing an estimated loss of Rs.

6,994 crore. The airline has witnessed a jump of 3.1% in passenger load factor

(PLF) in June 2011 as compared to last year. The national carrier has registered an

increase in yield per route per milometer (RPKM) from 3.33 in June 2010 to 3.53

June2011. Also, its revenue has increased to Rs. 917 crore from Rs. 876 crore

June, 2010.

Problems of Air Transport

Air transport faced under noted problems-

1. Risky: Air transport is the most risky form of transport because a minor

accident may put a substantial loss to the goods, passengers and the crew. The

chances of accidents are greater in comparison to other modes of transport. In air

transport, risks are increasing day by day due to crime and terrorism, violence,

hijacking, etc. all over the world. The chances of breakdown due to various factors

are high and the changes of survival in case of any accident during the journey are

very remote.

2. High Costs: Air transport is regarded as the costliest mode of transport.

Air transport in India is becoming very costly day by day with rising operational

costs. The operating cost of aero-planes is higher and it involves a great deal of

expenditure on the construction of aerodromes and aircraft. Because of this reason

the fare of air transport are so high that it becomes beyond the reach the common

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people. Air transport can only be availed by rich and affluent class of the society

because of its high freight cost. This means only the privileged class of the society

can avail this opportunity. Air transport, presently is a luxury in the developing

countries. Only a small fraction of the total population uses this service.

3. Not Economical over Short Distance: Air transportation is unable to be

advantageous or economical over short distances. It is because of this unavoidable

limitation that all domestic airlines run for short distances have either been

abandoned or are heavily subsidized by governments.

4. Small Carrying Capacity: The aircrafts have small carrying capacity and

therefore these are not suitable for carrying bulky and cheaper goods. The load

capacity cannot be increased as it is found in case of rails. Its cargo and passenger

carrying capacity is low as compared to road, rail and water transport.

5. Unreliable: Most of the air transports are uncertain and the unreliable

because these are controlled by weather condition. It is seriously affected by

adverse weather conditions. Fog, snow and heavy rain weather may cause

cancellation of some flights.

6. Huge Investment: Air transport requires huge investment for construction

and maintenance of aerodromes. It also requires trained, experienced and skilled

personnel which involves a substantial investment. Creation of aviation facilities

requires huge investments. The Government is least capable of increasing the

number of planes and airports in the country. The private sector has its own

limitations.

7. Non Co-operation of Staff: Indian airlines are facing problems due to

non-cooperation of the staff, such as, strikes by pilots, etc.

8. Outdated Planes: Aviation technology is changing very fast. But our

planes are outdated and not very safe. Consequently Indian airlines find it difficult to

compete with the world airlines.

9. Inadequate Training Facilities: There are no adequate facilities to train a

large number of pilots in the country. On privatization of airlines we are again facing

the problem of sufficient trained staff.

10. Adverse Weather Conditions: Air transport services are affected by

adverse weather conditions. Weather condition of the region plays an important role

in setting up an airport. Before the air flight technology this natural factor played an

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important role. However, with the development of air fight technology, the airplane

can fly at a higher level, thus avoid the weather hazard. However other weather

hazards such as cloud, of, smoke, dust storms, which either interfere with visibility or

affect performance of the air transport.

11. Legal Restrictions: Many countries imposed several legal restrictions on

the foreign airlines in the interest of their own national unity and peace.

5.2.3 Pricing of Passenger and Air Cargo Transportation:

Pricing of Passengers

Transport Rates: Transport systems face requirements to increase their

capacity and to reduce the costs of movements. All users (e.g. individuals,

enterprises, institutions, governments, etc.) have to negotiate or bid for the transfer

of goods, people, information and capital because supplies, distribution systems,

tariffs, salaries, locations, marketing techniques as well as fuel costs are changing

constantly. There are also costs involved in gathering information, negotiating, and

enforcing contracts and transactions, which are often referred as the cost of doing

business. Trade involves transactions costs that all agents attempt to reduce since

transaction costs account for a growing share of the resources consumed by the

economy. Rates are the price of transportation services paid by their users. They

are the negotiated monetary cost of moving a passenger or a unit of freight between

a specific origin and destination. Rates are often visible to the consumers since

transport providers must provide this information to secure transactions. They may

not necessarily express the real transport costs.

Components of Passenger Pricing

Transportation offers a spectrum of costs and level of services. Among the most

significant conditions affecting transport costs and passenger pricing.

1. Geography: Its impacts mainly involve distance and accessibility. Distance

is commonly the most basic condition affecting transport costs. The more it is

difficult to trade space for a cost, the more the friction of distance is important. It can

be expressed in terms of length, time, economic costs or the amount of energy

used. It varies greatly according to the type of transportation mode involved and the

efficiency of specific transport routes. Landlocked countries tend to have higher

transport costs, often twice as much, as they do not have direct access to maritime

transportation.

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2. Type of product: Many products require packaging, special handling, are

bulky or perishable. Coal is obviously a commodity that is easier to transport than

fruits or fresh flowers as it requires rudimentary storage facilities and can be

transshipped using rudimentary equipment. Insurance costs are also to be

considered and are commonly a function of the value to weight ratio and the risk

associated with the movement. As such, different economic sectors incur different

transport costs as they each have their own transport intensity. With containerization

the type of product plays little in the transport cost since rates are set per container,

but products still need to be loaded or unloaded from the container. For passengers,

comfort and amenities must be provided, especially if long distance travel is

involved.

3. Economies of scale: Another condition affecting transport costs and

passenger pricing is related to economies of scale or the possibilities to apply them

as the larger the quantities transported, the lower the unit cost. Bulk commodities

such as energy (coal, oil), minerals and grains are highly suitable to obtain lower

unit transport costs if they are transported in large quantities. For instance, moving a

barrel of oil over 4,000 km would cost $1 on a 150,000 deadweight tons tanker ship

and $3 on a 50,000 deadweight tons tanker ship. A similar trend also applies to

container shipping with larger containerships involving lower unit costs.

4. Energy: Transport activities are large consumers of energy, especially oil.

About 60% of all the global oil consumption is attributed to transport activities.

Transport typically account for about 25% of all the energy consumption of an

economy. The costs of several energy intensive transport modes, such as air

transport, are particularly susceptible to fluctuations in energy prices.

5. Trade Imbalance: Imbalances between imports and exports have impacts

on transport costs. This is especially the case for container transportation since

trade imbalances imply the repositioning of empty containers that have to be taken

into account in the total transport costs. Consequently, if a trade balance is strongly

negative (more imports than exports), transport costs for imports tend to be higher

than for exports. The same condition applies at the national and local levels where

freight flows are often unidirectional, implying empty movements.

6. Infrastructure: The efficiency and capacity of transport modes and

terminals has a direct impact on transport costs. Poor infrastructures imply higher

transport costs, delays and negative economic consequences. More developed

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transport systems tend to have lower transport costs since they are more reliable

and can handle more movements.

7. Mode: since each has its own capacity limitations and operational

conditions. When two or more modes are directly competing for the same market,

the outcome often results in lower transport costs.

8. Competition and Regulation. Concerns the complex competitive and

regulatory environment in which transportation takes place. Transport services

taking place over highly competitive segments tend to be of lower cost than on

segments with limited competition e.g. oligopoly or monopoly. International

competition has favored concentration in many segments of the transport industry,

namely maritime and air modes. Regulations, such as tariffs, cabotage laws, labor,

security and safety impose additional transport costs, particularly in developing

countries.

9. Surcharge. Refer to an array of fees, often set in an arbitrary fashion, to

reflect temporary conditions that may impact on costs assumed by the transporter.

The most common are fuel surcharges, security fees, geopolitical risk premiums and

additional baggage fees.

Air transport passengers carried in India

The Air transport; passengers carried in India was reported at 49877935.00 in

2008, according to the World Bank. Air passengers carried include both domestic

and international aircraft passengers of air carriers registered in the country. Indian

Airlines, the country's major domestic airline, files extensively across the nation and

to neighboring countries as well. Alliance Air, India's second domestic airline, covers

small towns not touched by Indian Airlines. Foreigners must pay in foreign currency,

traveller's cheques or currency exchange forms. The dollar tariff is applicable on

domestic section for foreigners and NRIs. Misplaced tickets are not the responsibility

of these airlines.

Indian Airlines has a 21 day 'Discover India' fare which costs US $ 400. Also

available are India wonder fares prices at US$ 200 valid for 7 days. Other excursion

fare circuit trips providing 20% or 30% discount on the regular fares are also

available. Foreign Nationals below 30 years are entitled to youth fare discount of

25% on US dollar tariff in domestic or Indo-Nepal flights.

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Air Cargo Transportation: AAI handles export cargo on behalf of operating

airlines. Export cargo is required to be brought in ready for carriage condition with

proper packing, labeling, marks and numbers etc. prominently marked on all sides of

packages, duly accompanied by a carting order from concerned airline or through

Electronic Data Interface (EDI), Air Waybill, Shipping Bill, Baggage declaration, for

admission of cargo. Terminal storage and processing charges are to be paid to the

AAI at the Bank or AAI counter in export wing or through EDI.

Import Cargo: A free storage for 72 hours (3 working days) from the date of

landing is allowed for import cargo or unaccompanied baggage. During the free

period only Terminal Storage Processing (TSP) charges are levied. Thereafter,

demurrage charges are livable as per the applicable schedule of rates. 24 hours

services for acceptance or processing or handling of export, import, and

transshipment cargo as well as release and delivery of urgent nature of import

cargo.

Import cargo is received by AAI from Airlines on said to contain and said to

weigh basis as per Import General Manifestation (IGM). Delivery of the consignment

is affected against the delivery order from the airline and after customs out of charge

on payment of applicable AAI charges. Import cargo which remains unclaimed

beyond 30 days of landing is liable to be disposed off in terms of section 48 of the

Customs Act, 1962. AAI is not associated in examination of contents of packages at

any stage. Examination is carried out by customs in the presence of consignee or

their authorized representative.

Export Cargo: The free period of one working day (24 hrs) for examination and

processing by shippers is allowed. Round-the-clock deployment of Duty Officers for

managing import and export operation.

Air India's modern fleet of Boeing and airbus aircraft carries just about

everything. From emeralds to elephants, pins to pigments, shrimps to super

computers. An option which lack of corporate and international enterprises has

made. We have the infrastructure and the network to ensure smooth transportation

and delivery of cargo, worldwide. Air India’s cargo operations give a capacity

advantage, combined with a 13-city network in India alone. So arrange for hassle-

free and direct customs clearance both for export and import cargo. In India, fly to

Mumbai, Delhi, Chennai, Thiruvananthapuram, Hyderabad, Bangalore, Kolkata,

Ahmadabad, Goa, Kochi, Kozhikode and Lucknow.

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Care of Export Cargo: Cargo remains under the care and responsibility of

passenger, shipper and agent in the examination area till it is handed-over to AAI

after customs let export order. If cargo is cleared by customs after issue of export

order, passenger, shipper and agent shall hand over the same to AAI for transfer to

bonded area. AAI, after receiving on said to contain basis, is responsible for the

cargo handed-over to it at the bonded gate by the agent and shipper till the cargo is

released to the airline for upliftment. The cargo is received, processed and handled

by AAI on said to contain basis and AAI is not associated in the examination of

contents of packages at any stage. The examination is carried out by customs in the

presence of the shipper or his authorized agent. Loaders services for physical

handling of packages are available at no extra charges.

Internationally, Air India has tied up with various foreign airlines and trucking

companies. To support our cargo operations, we have a highly skilled and

experienced team of professionals backed by our Training Division of international

repute to constantly upgrade skills of our personnel. At our warehouse in Mumbai,

we have developed an indigenous system of inventory management for cargo

handling of import or export functions. This takes care of the entire management of

cargo, supports EDI messages with Indian customs and replaces to a great extent

existing paper correspondence between customs, airlines, and the custodians. This

also replaces manual handling and binning of cargo at the warehouse in Mumbai by

Air India in our role as custodian and helps to identify large number of pieces for one

air waybill with different weights and commodities binned in separate locations, track

and identify arrival of part shipments under the same Air waybills on different flights

and maintain information on house goods for a consol air waybill at the house bill

level.

Types of Cargo

Air India’s cargo operation flies everything; to just about anywhere. Not very

surprising, when consider how far and wide Indians have settled. Vast populations

have settled in the Gulf, the US, UK, Africa and the Far East. It is to enable them to

maintain links with their friends and families back home. And to let the entrepreneurs

conveniently go about their business, that Air India has fine tuned its cargo services

to their needs. An active member of IATA, Air India carries all types of cargo

including dangerous goods and live animals, provided such shipments are tendered

according to IATA Dangerous Goods Regulations and IATA Live Animals

Regulations respectively. Following are the main types of Cargo.

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1. Postal Mail: Air India is undoubtedly the major carrier of postal mail out of

India. We have also successfully bagged postal contracts from various foreign

postal administrations for uplift of Postal mail from their countries. For any enquiries,

you may contact to local offices in the countries concerned or mail to offices.

2. Odd-Sized Cargo: Do have any odd sized cargo or heavy pieces to carry.

Don't worry. Like airlines handle valuables and livestock, it also possesses expertise

in logistics to carry heavy and odd-sized.

3. Dangerous Goods: India being an industrial and nuclear power, air

transport regularly carry Dangerous Goods such as flammable, corrosive, poisonous

and radioactive substances. Our cargo staff is qualified under dangerous Goods

regulations, to handle such consignments.

4. Valuables: In order to ensure security of valuables, it is provided a

container with a security locker, on flight. In fact, the entire operation of loading and

unloading is carried out under the vigilant eyes of security personnel. India's largest

foreign exchange earner is gems and jewellery, for which Air India gets its due

share. White and yellow metals are our frequent flyers and a woman's best friend,

diamonds, are our regular companions. The carriage of valuables is not only

restricted to gems and jewellery but also transportation of exquisite museum

artifacts and paintings. Among other valuables, once had the privilege of carrying

exquisite paintings, the Padshahnama from Queen Elizabeth's Windsor Castle

collections, dating back to the 17th Century Mughal period.

5. Livestock: Over the years, we have acquired considerable expertise in

carriage of livestock such as elephants, tigers, leopards, horses, cattle and pets.

Recently Air India transported two plane loads of high breed horses from Europe to

India.

6. Tips for Unaccompanied Baggage: For facilitating in customs clearance

for your unaccompanied baggage at Indian airports, you or your representative

should approach Indian Customs at the airport through our office with the following:

A) Copy of Airway bill B) Passenger's passport C) Baggage Declaration Form

(BDF), duly completed.

7. Mishandled Baggage: Any loss or damage to baggage must be reported

immediately on arrival. All mishandled baggage is traced through the worldwide

computerized tracer system. Passengers can check the status of their missing bag

on this site.

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8. Couriers: Courier traffic is a rapidly growing market. Air India has been in

the courier business transporting small packages and documents between

destinations for years. As airlines now allow drop-off facility en-route, the on-board

courier can carry courier loads to more than one destination, considerably saving on

cost.

5.2.4 Government Policy, Airports Authority of India- Functioning:

Government Policy

The recent growth in the air transport sector and strength of Indian economy,

has reassured entrepreneurs about healthy growth prospects for civil aviation in

India. Therefore, it is not surprising that a number of new airlines are proposing to

enter the market while existing airlines are going for significant fleet expansion or

renewal. Five new airlines viz. Air Deccan, Kingfisher, Spice Jet, Paramount Airways

and Go Airlines have started operations in past 1 ½ year or so.

1. Open Sky Policy during Peak Season: In order to ensure sufficient

availability of seats, a limited open sky policy was adopted by Government from

November 2004 to March 2005, under which designated airlines operated additional

services to or from India subject to the existing terms of commercial agreement with

Air India/Indian Airlines.

2. Air Services Agreement with USA: A revised Air Services Agreement

between India and USA was signed on 14th April, 2005 replacing the earlier

Agreement signed in 1956. The earlier agreement between India and USA already

permitted either side to designate any number of airlines to operate air services

between the two countries. The India-USA sector is one of the biggest markets for

Indian carriers.

3. Liberalization of Air Services with UK: GOI was taken a major step-

forward in respect of air services between India and UK as a result of the successful

negotiations with UK held in August, 2005. Consequently, entitlements for operation

of air services between India and UK, which is the biggest market for Air India, has

eased existing capacity constraints.

4. Private Carriers: In pursuance of the policy framework to permit the

designated airlines of all countries having Air Services Agreements with India to

operate 7 flights/week each to any two international airports in India, the designated

airlines of Austria, Finland, Republic of Korea, Maldives, Armenia, Yemen etc. have

M.A. II- Economics- Economics Transport and Communication

165

been offered additional capacity, as requested by the respective Governments,

subject to reciprocal rights to the Indian carriers.

5. Policy Regarding Commercial Agreements: : All new operations by

foreign carriers, both on new destinations as well as on existing routes would be free

from the obligations of mandated commercial agreements. All existing Government

mandated commercial agreements would be reviewed and phased out over the next

5 years. However, the airlines will be free to enter into such co-operative marketing

arrangements as are mutually agreed upon between them.

6. Foreign Direct Investment: Central Government has increased the

Foreign Direct Investment limits in Air Transport Services (Domestic Airlines) and

revised limits 49% through automatic route; and 100% by Non-Resident Indians

through automatic route. No direct or indirect equity participation by foreign airlines

is allowed.

7. Restructuring of Airports: Government is upgrading and modernizing

airports of Airports Authority of India (AAI) at Delhi and Mumbai through

restructuring process by adopting the Joint – Venture route. The process is likely to

be completed by the end of year 2005. The Joint Venture Companies will be

mandated to undertake capital expenditure of Rs.28 billion at Delhi and Rs. 26

billion at Mumbai in the first 5 years. The expenditure on development of Mumbai

airport is expected to be Rs.59 billion for the period 2005 – 2019 whereas for Delhi

airport, it is likely to be of the order of Rs.79 billion over the period 2005-2024.

8. Modernization of Non Metro Airports: AAI has proposed to modernize

35 tentatively selected non metro airports to world-class standards in phases with

focus on airside and city side development and enhancement of non-aeronautical

revenue. Indian financial consultants and global technical advisors were appointed

to conduct techno-economic feasibility study of 10 identified airports to evolve an

appropriate model based on viability of the project.

9. Cargo Hub at Nagpur: There is a proposal from Government of

Maharashtra (GOM) to construct International Multi Model Passenger and Cargo

Hub (MIHAN) at Nagpur. Ministry of Civil Aviation / Airports Authority of India is

willing to transfer the Nagpur airport to Government of Maharashtra subject to

finalization of modalities. On the advice of the MCA, GOM conducted a due

diligence study of Airport infrastructure at Nagpur and submitted a report on October

26, 2004. The report is under examination. Cabinet has approved international

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status to Nagpur Airport and has also approved re-naming it as Dr. Ambedkar

International Airport.

10. New Civil Aviation Policy: The Ministry constituted a Committee under

the Chairmanship of Shri Naresh Chandra, former Cabinet Secretary to prepare a

roadmap for civil aviation sector that will provide the basis for a New National Civil

Aviation Policy. The Committee had submitted the first part of the report on 08-12-

2003 and second part on 02-11-2004. The recommendations made in these reports

have been examined. A comprehensive “National Civil Aviation Policy” has been

drafted in consultation with the stakeholders in the aviation sector. The draft Civil

Aviation Policy was circulated for inter ministerial consultation in March, 2005.

Comments of other Ministries have since been received. Subsequently, the

Department of Space also requested to be consulted in the matter. The draft Civil

Aviation Policy is now being revised to take on board the views of other Ministries.

The matter will be submitted for the consideration of the Cabinet shortly.

Airports Authority of India

Airports Authority of India (AAI) manages a total of 125 Airports, which include

11 international airports, 08 Customs Airports, 81 domestic airports and 25 civil

enclaves at defense airfields. AAI also provides air traffic management services over

entire Indian air space and adjoining oceanic areas with ground installations at all

airports and 25 other locations to ensure safety of aircraft operations.

The airports at Ahmadabad, Amritsar, Calicut, Guwahati, Jaipur, Trivandrum,

Kolkata and Chennai, which today are established as international airports, are open

to operations even by foreign international airlines. Besides, the international flights,

national flag carriers operate from Coimbatore, Tiruchirappalli, Varanasi, and Gaya

Airports. Not only this but also the tourist charters now touch Agra, Coimbatore,

Jaipur, Lucknow, Patna airports etc.

All major air-routes over Indian landmass are Radar covered (29 Radar

installations at 11 locations) along with VOR/DVOR coverage (89 installations) co-

located with distance measuring equipment (90 installations). 52 runways are

provided with ILS installations with night landing facilities at most of these airports

and automatic message switching system at 15 airports.

AAI's successful implementation of Automatic Dependence Surveillance

System (ADSS), using indigenous technology, at Calcutta and Chennai air traffic

control centres, gave India the distinction of being the first country to use this

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advanced technology in the South East Asian region thus enabling effective air

traffic control over oceanic areas using satellite mode of communication. Use of

remote controlled VHF coverage, along with satellite communication links, has given

added strength to our ATMS. Linking of 80 locations by V-Sat installations shall

vastly enhance air traffic management and in turn safety of aircraft operations

besides enabling administrative and operational control over our extensive airport

network. Performance Based Navigation (PBN) procedures have already been

implemented at Mumbai, Delhi and Ahmadabad airports and are likely to be

implemented at other airports in phased manner.

AAI has undertaken GAGAN project in technological collaboration with Indian

Space and Research Organization (ISRO), where the satellite based system will be

used for navigation. The navigation signals thus received from the GPS will be

augmented to achieve the navigational requirement of aircrafts. First phase of

technology demonstration system has already been successfully completed in

February 2008. Development team has been geared up to upgrade the system in

operational phase. AAI has also planned to provide Ground Based Augmentation

System (GBAS) at Delhi and Mumbai airports. This GBAS equipment will be

capable of providing category-II landing signals to the aircrafts thus replacing the

existing instrument landing system in the long run, which is required at each end of

the runway.

AAI's endeavor, in enhanced focus on 'customer's expectations', has evinced

enthusiastic response to independent agency, which has organized customer

satisfaction surveys at 30 busy airports. These surveys have enabled us to

undertake improvements on aspects recommended by the airport users. The

receptacles for our 'Business Reply Letters' at airports have gained popularity; these

responses enable us to understand the changing aspirations of airport users. During

the first year of the millennium, AAI endeavors to make its operations more

transparent and also make available the instantaneous information to customers by

deploying state-of-art information technology.

The specific training, focus on improving the employee response and the

professional skill up-gradation, has been manifested. AAI's four training

establishments’ viz. Civil Aviation Training College (CATC) - Allahabad, National

Institute of Aviation Management and Research (NIAMAR) - Delhi and Fire Training

Centres (FTCs) at Delhi and Kolkata are expected to be busier than ever before.

AAI has also undertaken initiatives to upgrade training facilities at CATC Allahabad

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and Hyderabad Airport. Aerodrome Visual Simulator (AVS) has been provided at

CATC recently and non-radar procedural ATC simulator equipment is being supplied

to CATC Allahabad and Hyderabad Airport. It’s having a dedicated Flight Inspection

Unit (FIU) and it has fleet of three aircrafts fitted with latest state-of-art fully

automatic flight inspection system capable of inspecting. In addition to in house flight

calibration of nav aids, AAI also undertakes flight calibration of navy aids for Air

force, Navy, Coast guard and other private airfields in India.

Organization of AAI

Airports Authority of India (AAI) was constituted by an Act of Parliament and

came into being on 1st April 1995 by merging erstwhile National Airports Authority

and International Airports Authority of India. The merger brought into existence a

single Organization entrusted with the responsibility of creating, upgrading,

maintaining and managing civil aviation infrastructure both on the ground and air

space in the country.

AAI manages 125 airports, which include 11 international airport, 08 customs

airports, 81 domestic airports and 27 civil enclaves at defense airfields. AAI provides

air navigation services over 2.8 million square nautical miles of air space. During the

year 2008- 09, AAI handled aircraft movement international 270345 and domestic

1036187, passengers handled international 1047614 and domestic 33785990 and

the cargo handled international 318242 and domestic 181176.

Functions of AAI

1. Passenger Facilities: The main functions of AAI inter-alia include

construction, modification and management of passenger terminals, development

and management of cargo terminals, development and maintenance of

infrastructure including runways, parallel taxiways, apron etc., Provision of

communication, navigation and surveillance which includes provision of DVOR /

DME, ILS, ATC radars, visual aids etc., provision of air traffic services, provision of

passenger facilities and related amenities at its terminals thereby ensuring safe and

secure operations of aircraft, passenger and cargo in the country.

2. Air Navigation Services: In tune with global approach to modernization of

air navigation infrastructure for seamless navigation across state and regional

boundaries, AAI has been going ahead with its plans for transition to satellite based

communication, navigation, surveillance and air traffic management.

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3. Memoranda of C-operation: A number of co-operation agreements and

memoranda of co-operation have been signed with US federal aviation

administration, US trade and development agency, European Union, air services

Australia and the French government co-operative projects and studies initiated to

gain from their experience. Through these activities more and more executives of

AAI are being exposed to the latest technology, modern practices and procedures

being adopted to improve the overall performance of airports and air navigation

services.

4. Safety of Airports: Induction of latest state-of-the-art equipment, both as

replacement and old equipments and also as new facilities to improve standards of

safety of airports in the air is a continuous process. Adoptions of new and improved

procedure go hand in hand with induction of new equipment.

5. Security: The continuing security environment has brought into focus the

need for strengthening security of vital installations. There was thus an urgent need

to revamp the security at airports not only to thwart any misadventure but also to

restore confidence of traveling public in the security of air travel as a whole, which

was shaken after 9/11 tragedy. With this in view, a number of steps were taken

including deployment of CISF for airport security, CCTV surveillance system at

sensitive airports, latest and state-of-the-art X-ray baggage inspection systems,

premier security and surveillance systems. Smart cards for access control to vital

installations at airports are also being considered to supplement the efforts of

security personnel at sensitive airports.

6. Aerodrome Facilities: In Airports Authority of India, the basic approach to

planning of airport facilities has been adopted to create capacity ahead of demand in

our efforts. Towards implementation of this strategy, a number of projects for

extension and strengthening of runway, taxi track and aprons at different airports

has been taken up. Extension of runway to 7500 ft. has been taken up to support

operation for Airbus-320 and Boeing 737-800 categories of aircrafts at all airports.

7. HRD Training: A large pool of trained and highly skilled manpower is one

of the major assets of AAI. Development and technological enhancements and

consequent refinement of operating standards and procedures, new standards of

safety and security and improvements in management techniques call for continuing

training to update the knowledge and skill of officers and staff. For this purpose AAI

has a number of training establishments, viz. NIAMAR in Delhi, CATC in Allahabad

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and so on. Foreign students have also been participating in the training programme

being conducted by these institutions.

8. IT Implementation: Information technology holds the key to operational

and managerial efficiency, transparency and employee productivity. AAI initiated a

programme to indoctrinate IT culture among its employees and this is most powerful

tool to enhance efficiency in the organization. AAI website with domain name

www.airportsindia.org.in or www.aai.aero is a popular website giving a host of

information about the organization besides domestic and international flight

schedules and such other information of interest to the public in general and

passengers in particular.

9. Design, Development, Operation and Maintenance of international and

domestic airports and civil enclaves.

10. Control and Management of the Indian airspace extending beyond the

territorial limits of the country, as accepted by ICAO.

Board Members of AAI

Chairman

� Member ((Human Resource)

� Member (Planning)

� Member (ANS) & Addl.Charge-Member (Finance)

� Member (Operations)

� Additional Secretary and Financial Advisor Ministry of Civil Aviation

(Official) and Director General of Civil Aviation

� Joint Secretary, Ministry of Civil Aviation (Official)

� Non-Official

� Non-Official

� Non-Official

Indian Aviation Academy

1. Sponsored by AAI, Indian Aviation Academy has been created as an

autonomous body under the aegis of NIAMAR SOCIETY to cater to

requirement of training employees of AAI, Director General of Civil Aviation and

171

Bureau of Civil Aviation Security under one roof. Memorandum of

Understanding (MoU) has been become centre for e in areas of education,

training and research in aviation in Asia pacific region. Its aim is to become a

Deemed University in due course.

2. Spread over an area of 5 acres having beautiful ambience and healthy

environment. It has provided world class training modern infrastructure, training,

hostel facilities and best in-house and visiting aviation experts comparable with

the renowned Civil Aviation Training Institutes around the world.

3. Erstwhile National Institute of Aviation Management and Research (NIAMAR)

was one of the prestigious premiere institutes of AAI established in the year

1986, basically to cater to the in-house training needs of Airports Authority of

India in all disciplines of Airport Management and for the overall development of

their human resources. Started as Institute of Aviation Management (IAM) at

Paterson Farms, Nangal Diary-New Delhi.

4. Human resources development (HRD) is an integral field of any organization

whose vision is very broad and meaningful for the overall success of that

organization in the field it has been dealing with. AAI is not an exception to that

and also given emphasis by the top management to develop the best human

resources with required skills, knowledge and attitude, not only to cater to its

own training needs but to that of entire civil aviation fraternity.

5. This institute is one of the strongest pillars to shoulder the responsibility

towards human resources development in various fields of airport management

such as airport operations, airport engineering - construction, maintenance and

project management, cargo management, airport finance, human resource

management, airport commercial and land management and aviation law.

Role of Airport Infrastructure in National Economy

1. Airports being nuclei of economic activity assume a significant role in the

national economy. The quality of airport infrastructure, which is a vital

component of the overall transportation network, contributes directly to a

country's international competitiveness and the flow of foreign investment.

2. While cargo carried by air in India weighs less than 1% of the total cargo

exported, it accounts for 35% of the total value of exports. Better cargo handling

facilities lead to enhanced levels of importation, especially of capital goods and

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high-value items. Likewise, 97% of the country's foreign tourists arrive by air

and tourism is the nation's second largest foreign exchange earner.

3. Airports also represent a country's window on the world. Passengers form their

first impressions about a nation from the state of its airports. They can be

effectively used as symbols of national pride, if we pay sufficient attention to

their quality and maintenance.

4. In many remote, hilly and inaccessible areas of the country, air transport is the

quickest and sometimes the only mode of travel available. This is especially

true of sensitive regions on the borders with our neighbors in the west, north

and north-east.

5. Airports need to be integrated with other modes of transport like Railways and

Highways, enabling seamless transportation to all parts of the country.

1.3 Summary:

A. Transport in the India is an important part of the national economy. Since the

economic liberalization of the 1990s, development of infrastructure within the

country has progressed at a rapid pace, and today there is a wide variety of

modes of transport by land, water and air. The 9th largest aviation market in the

world is India. At present, private airlines account for around 75% portion of the

domestic aviation market. Air transport is the fastest mode of transport and

therefore suitable carriage of goods over a long distance requiring less time.

They maintain a system of high speed transportation requirement of the

government and of military in war as well as in peace. But Air transport is the

most risky form of transport because a minor accident may put a substantial loss

to the goods, passengers and the crew.

B. The Indian Civil Aviation market grew at a CAGR of 18%, being valued round

US$ 5.6 billion in 2008. Further statistics revealed that the air traffic in August

2009 was a double digit figure. The domestic airliners flew 3.67 million

passengers in August 2009, as against 2.92 million in the corresponding period

of 2007, up by 26%. The Centre for Asia Pacific Aviation (CAPA) has estimated

that the domestic traffic will go up by 25% to 30% till 2010 along with a surge in

the international traffic by 15%. There would be more than 100 million

passengers by 2010. Then again by 2020, Indian airports will in all probability

handle over 100 million passengers every year. The investment plans to the

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tune of US$ 9 billion has been made by the Aviation Ministry for modernizing the

existing airports by 2010.

C. Indian Airlines has a 21 day ‘Discover India' fare which costs US $ 400. Also

available are India wonder fares prices at US$ 200 valid for 7 days. Other

excursion fare circuit trips providing 20% or 30% discount on the regular fares

are also available. Foreign Nationals below 30 years are entitled to youth fare

discount of 25% on US dollar tariff in domestic or Indo-Nepal flights. Air India’s

cargo operation flies everything; to just about anywhere. Not very surprising,

when consider how far and wide Indians have settled. Vast populations have

settled in the Gulf, the US, UK, Africa and the Far East. It is to enable them to

maintain links with their friends and families back home.

D. GOI was taken a major step-forward in respect of air services between India and

UK as a result of the successful negotiations with UK held in August, 2005.

Consequently, entitlements for operation of air services between India and UK,

which is the biggest market for Air India, has eased existing capacity constraints.

GOI has increased the FDI limits in air transport services e.g. domestic airlines

and revised limits 49% through automatic route; and 100% by NRIs through

automatic route. No direct or indirect equity participation by foreign airlines is

allowed. In order to ensure sufficient availability of seats, a limited open sky

policy was adopted by GOI from November 2004 to March 2005, under which

designated airlines operated additional services to or from India subject to the

existing terms of commercial agreement with air India and Indian airlines.

5.4 Key words:

���� Liberalization: In general, liberalization refers to a relaxation of previous

government restrictions, usually in areas of social or economic policy.

���� Economic liberalization: Economic liberalization is a very broad term that

usually refers to fewer government regulations and restrictions in the economy in

exchange for greater participation of private entities; the doctrine is associated with

classical liberalism.

���� International trade: International trade is the exchange of capital, goods

and services across the international boarders or territories.

���� Infrastructure is basic physical and organizational structures needed for

the operation of a society or enterprise or the services and facilities necessary for an

economy to function. It can be generally defined as the set of interconnected

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structural elements that provide framework supporting an entire structure of

development.

���� Economy: An economy consists of the economic system of a country or

other area; the labour capital and land resources and the manufacturing, trade,

distribution and consumption of goods and services of that area.

5.5 Questions for self-learning:

A) Choose the correct alternatives from the following.

1. Air transport being the most -------------------- mode of transport has been gaining

popularity.

1) Modern 2) Traditional 3) Both 4) None of above

2 ---------------- largest aviation market in the world is India

1) 5th 2) 9th 3) 10th 4) 2nd

3 ----------------- air corridor was ranked 6th by the Official Airline Guide in 2007

among the world's busiest routes

1) Delhi- Calcutta 2) Mumbai-Delhi 3) Delhi- Pune 4) None of above

4. Indian Airlines has a 21 day 'Discover India' fare which costs ------------

1) US$ 200 2) US$ 500 3) US$ 100 4) US $ 400

5. A revised Air Services Agreement between India and USA was signed on -----------

------

1) 2000 2) 2005 3) 2010 4) 2012

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B) Write an answer into single sentence.

1. How much portion of private airlines in domestic aviation market.

2. State any two characteristics of air transport in India.

3. State any two problems of air transport in India.

4. How many international airports are managed by AAI?

5. When Airports Authority of India was come into exist.

5.6 Answers of self-learning questions:

A) 1) Modern 2) 9th 3) Mumbai- Delhi 4) US$ 400 5)2005

B) 1) Private airlines account for 75% portion of the domestic aviation market.

2) Popular Domestic Air Travel & International Airports

3) Risky & Adverse Weather Conditions

4) 11 international airports are managed by AAI.

5) Airports Authority of India was come into exist in 1995.

5.7 Questions for Self Study:

A) Broad answer Type Questions

1. What are the characteristics of air transport in India?

2. What is the significance of air transport in India?

3. What are the problems faced to air transport in India?

4. Discuss the growth of air transport in India.

5. Explain the Government policy regarding air transport in India.

B) Short Notes

1. Need of air transport

2. Airports Authority of India

3. Air cargo transportation

4. Functioning of AAI

5. Scope of air transport

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5.8 Field Work:

In order to know and understand the air transport the student should collect the

information about air transportation in India and write report.

5.7 References for further study:

1. Aboncher Allan (1976), Transportation Economics and Public Policy with Urban

Extension, Wiley Inter Science Publishing, New York.

2. Bimalendu Mishra and Prasannkumar Chaudhary (1998), Transport Sector in

India, Kalyani Publishers, Ludhiyana.

3. Economic Survey of India, Ministry of Finance, Govt. of India 2009-10.

4. Economic Survey of Maharashtra- 2010-11.

5. Eleven Five Year Plan, GOI.

6. Nawab, K. W. (1967), Economic Development of Indian Air Transport, National

Publishing House.

� � �

M.A. II- Economics- Economics Transport and Communication

177

Unit- 6

Transport and Environmental Pollution

Index:

6.0 Objectives

6.1 Introduction

6.2 Presentation of the Subject

6.2.1Transport and Environmental Pollution

6.2.2 Road Transport and the Environment

6.2.3 Railway Transport and the Environment

6.2.4 Water Transport and the Environment

6.2.5 Air Transport and the Environment

6.3 Terms to Remember

6.4 Summary

6.5 Answers to Check Your Progress

6.6 Exercise : Answer the following questions

6.7 References

6.0 Objectives:

The study of this unit will enable us in materializing following objectives.

1. To know about transport system and environmental pollution relationship;

2. To understand the contribution of surface transport means like road and

railway;

3. To explain the environmental pollution arising due to the air and water transport

system.

6.1 Introduction:

Infrastructural facilities play a very significant role in economic development of

the economy. In brief, in absence of infrastructural facilities it is impossible to begin

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even a single productive activity in an economy. In this backdrop, all the previous

units endeavour to study transport and communication system, their means,

progress, problems and policy of the government as well. Transport and

environment is a missing aspect in all the previous units discussed. Hence, it is

desirable and appropriate to discuss the various issues and aspects concerning

transport system and the environment. It is therefore, the present unit attempts to

discuss all the issues relating to transport and environment in detail to the extent

possible.

6.2 Presentation of the Subject:

It is a fact that the transport system plays a pivotal role in the socio-economic

development of the economy. Likewise, with regard to that, the environment is also

of greater importance. Because the environment along its important contribution in

the development of the economy, it also facilitates the existence of all the living

things and can have evil effects on the human beings prominently. It is against this

overall backdrop, it is inevitable to study the relationship between the transport

system and the environment.

6.2.1Transport and Environmental Pollution:

The nature of the relationship between transport system and the environment is

a contradictory type. It is because, transport system makes dynamic passengers

and goods on the one hand, but increasing number of vehicles results in traffic jam

and conjunction and contributes very significantly to the number of environmental

problems. Transport system is responsible for the environmental problems like air,

water, noise and land pollution with the number of impacts. These impacts are

classified into three categories :

1. Direct impact or effect in which the effects of transport system on the

environment and their causes are realised.

2. Indirect impact of transport undertakings on the environment are of higher level,

but effective relationship between them is not known.

3. In joint effects of transport system on ecosystem, are direct and indirect. But it

is very difficult to predict them.

These are the number of aspects of the relationship between transport system

and the environment. Transport system contributes to the environmental pollution

that can be of air pollution, water pollution, noise pollution, land pollution types,

which very badly affects their quality and biosphere. The relationship between

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transport system and the environment can be explained as follows. They are the

various aspects or dimensions of the transport system and the environment

relationship.

Air Quality/Pollution:

Vehicles on the highways, submarine engines, railway coaches, aircrafts

discharge smoke and particles and contribute to air pollution and adversely effect on

the health of human beings as well as other living things. Toxic air pollutants cause

to cancer, respiratory diseases and diseases relating to brain as well. Carbon

monoxide breathing adversely affects blood and reduces the level of oxygen, which

is very much dangerous to public health. Likewise, nitrogen dioxide (No2) being

emitted by the transport system badly affects the working of the lungs. Sulphur

dioxide (So2) and nitrogen oxide (Nox) gases create acidic compounds and their

mixing with raindrops results in acid rain, which very badly affects agricultural

production and living things also. Suspended particles by the transport vehicles very

significantly deteriorate air quality in the atmosphere.

Climate Change:

Transport industries discharge the number of gases in million tonnes per year in

the atmosphere. They consist of carbon monoxide (Co), Carbon dioxide (Co2),

Methane (Ch4), Nitrogen oxide (Nox), Cluro Fluro Carbons (CFCs), heavy metals

(copper, cadmium) and particles (ash, dust), etc. Some gases from them are

responsible for green house effect, global warming and climate change as well.

Besides this, Nitrous oxide helps in depletion of ozone layer, which enables to reach

ultra violet rays on the planet earth, which have the number of evil effects especially

living things.

Noise Pollution:

When the sound level increases beyond bearable limit that creates the problem

of noise pollution, which can have the number of evil consequences to be suffered

especially by the human beings. Noise heard by the people vanishes satisfaction

and happiness in human life. In general, when the level of sound remains upto 75

dB, that very badly affects hearing capacity of humans and physical as well as

mental well being also. The actual working of the transport vehicles and noise

generated in harbours, railways and airports can very badly affect human health.

Besides this, it can also result in heart related diseases as well as, it can reduce

productive uses of the land whereby their prices can fall in the urban areas.

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Water Quality/Pollution:

Transport undertakings affect the state of water quality. Aeroplanes, cars,

trucks, railways transport and at their stations oil, chemicals, toxic particles are

discharged which mix up into rivers, lakes, seas and pollute their water. There is

increasing demand for the shipping transport and submarines are contributing to the

water pollution. Submarine transport discharges solid waste, waste water, spirit

mixed water and oil layers are very significantly contributing to the problem of water

pollution. Water transport in the harbours is contributing to micro organisms,

bacteria and virus to the higher level possible, which has resulted in endangering

group eco systems. The solid waste generated by this transport system comprises

of heavy metals, plastics that does not degrade which consequently contributes to

the pollution of the sea water. The seepage of oil ships to the greater extent possible

is resulting in pollution of the sea water, which has endangered the aquatic

biodiversity.

Soil Quality/Pollution:

Transport system adversely affects land through soil erosion and contributes to

the land pollution. Shipping transport creates huge waves in the water and thereby

helps in the land pollution on the banks of seas and rivers. The use of land for the

construction of the highways, harbours and airports is resulting in falling fertility and

quality of the soil and thereby land. The use of toxic thing and materials in the

transport industries is causing to the soil pollution. The transport vehicles on the

roads are helping in the land pollution on both the sides through their oil and oil

layer. The lands in the surroundings of the railways, roads, harbours and airports

are polluting through poisonous metals, heavy metals, and toxic chemicals.

Loss of Biodiversity:

Transport systems are very badly affecting the natural flora. In huge quantity

forest cutting is undertaken for the production of necessary tools, equipments,

vehicles and roads which is very significantly helping in the rapid deforestation. The

growth of some trees and plants is restricted by the road and railway systems.

Likewise, bad and undesirable changes are taking place in some trees and plants

due to the transport systems and their working. Further, this is helping in the

extermination of species of some plants. The cutting of trees and deforestation is

resulting in the destroy of habitats of the many animals and birds, and consequently

contributing to the scarcity of their some species.

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Changes in Shapes of Land:

Transport systems and facilities are affecting shapes and sizes of lands.

Harbours and airports are a salient feature of urban areas. But they are very

significantly contributing to the rapid changes in the sizes of the lands. Railways and

highways go through cities or nearby cities as the result of which the borders of the

cities are changing very significantly. The use of land in urban areas is depending

on the transport system and their facilities. The main transport system and transport

services are helping in deteoritaing the quality of air, water and land as well.

Likewise, noise level is increasing in urban areas and very significantly contributing

to the degradation of the urban environment.

6.2.2 Road Transport and the Environment:

Transport facilities are considered as a basic facilities. They play a very

important role in making dynamic the process of economic development in the

economy. Road transport facilities are one of the important transport facilities in the

economy. There is an inverse relationship between transport system and the

environment. Likewise, the inverse relationship between road transport and the

environment is found. Increasing road transport facilities are increasing

environmental pollution and increasing its intensity. It is therefore very much

essential to study the relationship between road transport system and the

environment.

Road transport facilities are provided by the buses, trucks, tempos, cars, autos,

etc. These are the road transport means or vehicles. Road transport facilities

contribute to the environmental pollution. The environmental pollution being created

by the road transport system comprises of air pollution, noise pollution.

1. Air Pollution:

It is real and confirm that air pollution arises because of road transport vehicles.

This air pollution is determined by the factors like travel distance, travel load, nature

and extent of energy use, state of transport, vehicle age, and so on. Besides these,

temperature, passenger and goods load, vehicle speed, etc. also affect air pollution

by road transport system.

Road transport means or vehicles emit the poisonous gases like carbon

monoxide (Co), carbon dioxide (Co2), Hydro carbons (Hc), Nitrogen oxides (Nox),

Sulphur dioxide (So2), particulates into the atmosphere and contribute to the air

pollution. All road transport means, especially goods transport vehicles discharge

per kilometer 0.90 gram carbon monoxide, 211 gram carbon dioxide, 0.68 gram

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hydro carbons, 2.97 gram nitrogen oxide, 0.20 gram sulphur dioxide and 0.19 gram

particulates into the atmosphere and contribute to air pollution. The speed of

vehicles and travel of vehicles determine the magnitude of the air pollutants emitted

into the atmosphere, and thereby the air pollution.

2. Noise Pollution:

Road transport means generate higher level sound and contribute to the

problem of air pollution. They comprise mainly of trucks, tempos which are

prominently goods transport vehicles. Besides these, the passenger transport

vehicles like buses, cars, also help in arising the noise pollution, and increasing its

intensity as well. This type of noise pollution is determined by the factors like vehicle

travel, speed, load, use of petrol or diesel. According to a study by Kurer (1993),

generally petrol vehicle with 100 km speed generates sound of 77-78 dB. And a

diesel vehicle generates the noise of 79 dB. Likewise, 70 to 105 kw sized truck

creates the noise of 82 to 83 dB level. The size of vehicle does not affect much

significantly on the level of noise. The noise created by the road transport vehicles

pose social cost on the society in the form of human health, value of property and

assets, noise control expenditure. It is indicated by their willingness to pay (WTP) to

control the problem of noise pollution.

Besides these, while creating road transport facilities the use of the land is

made, which results in land degradation. The movements of the vehicles on the

roads pollute the lands on both the sides of the road. Road transport vehicles have

increased the number of accidents, which destruct the human resources. It is a fact

that now a days the number of vehicle accidents has increased rapidly and

significantly.

It is clear that road transport means and facilities are contributing to the

environmental pollution. It is very much essential to control such environmental

pollution. For this, following could be the measures for its control. They are

formulate proper transport policy and its implementation, measure the state of

vehicles, traffic rules and their strict enforcement necessary, training and knowledge

of traffic rules to the drivers, transport knowledge and eco friendly facilities, control

over adulteration of petrol, diesel and other energy sources.

6.2.3 Railway Transport and the Environment:

Railway transport system is one of the important modes of transport and

transport facilities. It is supposed that railways meagerly contributes to

environmental pollution. But it can adversely affect eco systems. Besides this, it is

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inevitable to know and study environmental pollution being contributed by the

railways.

1. Air Pollution:

It is observed that railways very meagerly contribute to the air pollution

compared with the road transport means and facilities. The type of energy being

used in railways determines the nature and extent of air pollution. In general,

railways discharge the air pollutants like carbon monoxide (Co), Carbon dioxide

(Co2), Hydrocarbons (Hc), Nitrogen oxides (Nox), Sulphur dioxide (So2) and

particulates into the atmosphere, but in very meager quantity. According to Kurer,

railway discharges per tonne per kilometer 0.15 gram carbon monoxide, .48 gram

carbon dioxide, 0.4 gram nitrogen oxides, 0.18 gram sulphur dioxide and 0.07 gram

particulates. These emissions depend upon type of engine and type of energy used.

2. Noise Pollution:

The noise being created by the railways is lower than the road transport means

like trucks. It is because; the noise of the railways is of intermittent in nature. But if

sound of one railway is measured, it is greater than the truck. According to Kurer,

railways create noise worth of 100 dB on an average. But per tonne sound of the

railways can be 63 dB, which can be 64 dB for trucks.

From the foregoing analysis it is clear that the contribution of railways to the

environmental pollution is lower and hence meager. But it is not correct that railways

do not contribute to the environmental pollution in the form of air and noise pollution.

The use of modern technology in railways can enable us in controlling

environmental pollution in the economy.

6.2.4 Water Transport and the Environment:

Water transport is a constituent of the transport system in an economy. The

water transport facilities are created and provided, where other modes and facilities

of the transport can not be created and supplied. But when we try to study the

relationship between the water transport and the environment. It is true and clear

that water transport facilities and the environmental pollution in the economy. Both

the inland and sea transport facilities help in the environmental pollution. Oil, oil

mixed waste water, nondegradable solid waste, seepage of oil and toxic chemicals,

air pollutants, harbour and channel construction and management contribute to the

environmental pollution, and it can also be harmful to the eco systems as well.

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1. Oil Pollution:

Ships are used for the transport of oil, other materials and passengers also.

While transporting of oil, other materials, and passengers by the ships oil seepage in

the sea water prominently takes place. If oil, other materials and passengers are not

there in the ship, water is filled in for the balance of the ship in the sea. That water is

discharged into the sea and then oil, other materials and passengers are

accommodated in the ship. The released water, oil, chemical mixed water and other

wastes from the ships mix up into the sea water and help in the water pollution.

2. Disposal of Solid Waste:

Ships discharge a lot of solid waste into the sea, and contribute to the pollution

of the sea water. That solid waste is of the plastics prominently. Fishing boats use

plastic nets in the sea water and contribute to the water pollution. Goods

transporting ships use plastics and wood for dunnage and packaging, but all that is

thrown in the sea water only and helped in the pollution of the sea water. Of these,

plastics very badly affect aquatic biodiversity as well as, sea shore biodiversity also.

The dunnage, packaging materials and plastics very badly affect fishes, birds and

other living things as well. But it is very difficult to measure the nature and extent of

solid waste in the sea water.

3. Accidental Spills:

The seepages of oil carrying ships create oil spills on the sea water and very

significantly contribute to the pollution of the sea water. The sea water pollution

arises at the times of filling in and down loading of the oil from the ships in the seas.

The bad climatic conditions result in breaking of ships in the sea, which also

contributes to the sea water pollution, due to seepage of oil from ships. The

seepage of oil in the sea takes place especially at the time of arrival or departure of

the ships from the harbours. In 1994, in all 9440 oil seepage accidents took place in

the USA only, that oil seepage was worth of 34,149 m3. But it is very much

expensive to purify the polluted sea water. According to UNCTAD, the cost of

purifying sea water by destroying oil spills is $7000 for some cubic meter oil.

4. Air Pollution:

Goods transport ships is not a major source of air pollution. The energy which is

provided to these ships does not discharge the air pollutants. But the materials used

for providing the light, heat and ventilation contributes to the problem of air pollution.

Ships discharge the air pollutants like Carbon monoxide (Co), Carbon dioxide (Co2),

Hydrocarbons (Hc), Nitrogen oxides (Nox), Sulphur dioxide (So2), particulates in very

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lesser quantity. According to the study by Befahy, per tonne – per kilometer the

discharge of Carbon monoxide is 0.20 gram, 0.08 gram hydro carbons, 0.58 gram

nitrogen oxide, 0.04 gram particulates respectively. In inland water transport the

discharge of these air pollutants is lesser than what is mentioned above.

5. Construction and Maintenance of Harbours and Channels and

Environmental Pollution:

The construction, repairs and maintenance of harbours and channels in the sea

adversely affects the sea water and more importantly aquatic biodiversity. It requires

deep digging for the construction of the harbours as well as channels. This results in

accumulating sludge in huge quantity, which badly affects fishes and other living

things. As a result, the turbidity of the sea water increases which creates hindrances

to reach the sunrays and heat in the water, this restricts the photosynthesis process

and inadequate supply of food and heat to the living things in the sea water. This

also adversely affects on the sea water flows, sea and salty water, dissolved oxygen

(DO) and other pollutants also. Besides these, oil in sea water, oil spill, heavy

metals, chemical compounds in the sea water results in the pollution of the sea

water.

6.2.5 Air Transport and the Environment:

Air transport system is an important transport system and facility. Its salient

feature is, it is the fastest mode of the transport. It provides both the goods as well

as passenger transport facility. It is therefore, very much necessary to study the

relationship between air transport and the environment. Air transport is dangerous to

the environment in three ways. Aeroplane contributes to the air pollution and thereby

helps to the global warming during its take off and landing. It creates the problems

like air pollution, noise pollution, land use also.

1. Low Attitude Air Pollution:

The aircraft at low attitude discharges the air pollutants like nitrogen oxides,

carbon monoxide, and hydrocarbons and helps in the air pollution. These gases

convert into ozone and other compounds that creates mists, fogs in the atmosphere.

But it is lesser air pollution than that of air pollution by the road transport system.

2. Global Air Pollution:

The high altitude aeroplanes discharge green house gases and contribute to

the air pollution and global warming also. The contribution of the carbon dioxide to

the air pollution remains comparatively lower. But emissions of the nitrogen oxide

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and other gases create ozone and thereby green house gases. The evaporation of

the water helps like that of green house gases and air pollution. According to

Vedantram, Sign altitude aeroplanes discharge per tonne – per kilometer 1.61 gram

carbon dioxide, 5.56 gram nitrogen oxide.

3. Airport Externalities:

Air transport system is very much troublesome to the people working and

staying near to the airports. The problem of noise pollution arises during the take off

and landing of the aircrafts. Road transport system is attached to the airport, which

creates the problem of air pollution. The airports are surrounded rushing by the road

transport vehicles that creates the problem of traffic jam to the greater extent

possible and air pollution as well. The expansion of the airport creates the problem

of the land utilization. But it is a fact that, it is very much difficult to measure the

effects of the air transport system on the environment.

It is very much essential to think of the measures/remedies to control evil

effects of the air transport on the environment. They could be, use of a mechanism

control the level of noise during the take off and landing of the aircraft. It is

necessary to think seriously of the norms of the sound level. It is essential to replace

the old and outdated aeroplanes from the air transport system. The total life span of

the aircraft should be maximum of 25 years only. It is necessary to attempt for

controlling the level of noise in and surrounding of the airport. It is urgent need of the

hour to stop the use of the old and excessive sounding aeroplanes.

Check Your Progress:

A) State whether the following statements are correct or incorrect.

1. Transport facilities are eco friendly.

2. Transport system helps in increasing environmental quality.

3. Road transport system does not create the environmental pollution.

4. Railway transport contributes to the environmental pollution lesser than the

road transport system.

5. Water transport system largely contributes to the water pollution.

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B) Answer in one sentence.

1. What do you mean by the environmental pollution?

2. What is meant by the water pollution?

3. What do you mean by the air pollution?

4. What is meant by the noise pollution?

5. What do you mean by the environment?

6.3 Terms to Remember:

1. Transport : A system that facilitates the movement of the goods and people

from one place to another.

2. Road Transport : A transport system which enables the movement of the

goods and passengers on the roads only.

3. Rail Transport : The movement of the people and goods through the railways.

4. Air Transport : The movement of goods and passengers through the

atmosphere or air.

5. Water Transport : A transport system in which the medium of movement of the

goods and people is water.

6.4 Summary:

Transport facilities are important infrastructural facilities. It is difficult to begin

even a single economic development activity. It is therefore, very much necessary to

provide for adequate and qualitative transport facilities. The transport facilities are of

type such as road transport, railway transport, air transport, water transport etc.

There is an inverse relationship between the transport system and the environment.

This means, the transport system contributes to the environmental pollution and

thereby environmental problems. It is against this overall background, the present

unit discusses the important issues relating transport and the environment, such as

the relationship between the transport system and the environment, road transport

and the environment, railways and the environment, air transport and the

environment, water transport and the environment.

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6.5 Answers to Check Your Progress:

A) State whether the following statements are correct or incorrect.

1) Incorrect 2) Incorrect 3) Incorrect 4) Correct 5) Incorrect

B) Answer in one sentence.

1. The decrease of the quality of the environment.

2. The decrease in the quality of the water.

3. The excessive concentration of the air pollutants in the atmosphere.

4. The excessive level of noise in the ambient.

5. Air, water, land, life.

6.6 Exercise : Answer the following questions:

1. Discuss the relationship between the transport system and the environment.

2. What can be the effect of the road transport on the environment?

3. Explain how railways contribute to the environmental pollution.

4. Discuss on the environmental pollution by the air transport.

5. Explain the relationship between the water transport and the environment.

6.7 References:

1. Savage, C. I. (1970), An Economic History of Transport, Hutchinson.

2. Sharp, C. H. (1973), Transport Economics, Macmillan.

3. Tripathy, P. C. (1972), Rural Transport and Economic Development, S. Chand

& Sons.

4. Nanjundappa, D. H. (1973), Transport Planning and Finance, Karnataka

University.

5. Shrivastav, S. K., Economics of Transport.

6. Cucchi, C. and M. Bidault (1991), Current and Future Emission Standards for

Exhaust Gases and Noise, and Test Procedures for Goods Vehicles, in Kroon

et. al. eds.

7. Eno Transportation Foundation (1994), First Session of the Transport Public

Policy Forum : Intermodalism, Summary of a forum held July 28, 1994, at the

M.A. II- Economics- Economics Transport and Communication

189

Eno Headquarters in Lansdowne, VA, Prepared in cooperation with Apogee

Research, Inc., Bethesda, MD.

8. European Conference of Ministers of Transport (1993), Transport Growth in

Question. 12th International Symposium on Theory and Practice in Transport

Economics, Paris, 1993.

9. European Conference of Ministers of Transport (1995), Estimates of

Externalities, Paris, March 1996.

10. European Conference of Ministers of Transport, Efficient Transport for Europe :

Policies for Internalization of External Costs, Paris (forthcoming).

11. Filippi, Federico (1991), Prospects for the Reduction of Noise from Heavy Duty

Diesel Vehicles, in Kroon et. al., eds.

12. Kroon, Martin, Ruthger Smit, and Joop van Ham, eds. (1991), Freight Transport

and the Environment, Studies in Environmental Science 45 (Amsterdam :

Elsevier, 1991).

13. Kurer, R. (1993), Environment, Global and Local Effects, in ECMT (1993).

� � �

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Unit- 7

Communication and Economic Development

Index:

7.0 Objectives

7.1 Introduction

7.2: Subject Description

7.2.1 Definitions of Communication

7.2.2 Communication and Development

7.2.3 Role and Importance of Communication in the Development

7.2.4 Role of Communication: Some Views of Wilbur Schramm

7.2.5 Means of Communication

7.2.6 Public and Private Communication Service Providers

7.2.7 The Telecom Regulatory Authority of India (TRAI)

7.2.8 Telecom Policy in India

7.2.9 Problems of Communication Means in India

7.3 Summary

7.4 Keywords

7.5 Self-Learning Questions

7.6 Answer to Self-Learning Questions

7.7 Questions for Self Study

7.8 References for further study

7.0 Objectives:

After studying this lesson, you will be able to

� define communication;

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� explain the importance of communication in the development;

� describe different means of communication;

� describe the communication service providers in India

� explain the communication policy in India; and

� describe the problem of communication

7.1 Introduction:

In the last unit we have discussed contents of road transport, rail transport, air

transport, water transport and related environment. Now we will discuss the topic of

communication, traditional and modern means of communication, major services

providers providing communication services in India, problems of communication

services in India and policy regarding communication services in India.

7.2 Subject Description:

Communication is the process of sending and receiving messages through

verbal or nonverbal means--speech, writing, signs, signals, or behavior. It is the act

of communicating; transmission; the exchange of thoughts, messages, or

information, as by speech, signals, writing, or behavior; It is the art and technique of

using words effectively to impart information or ideas and it is a system, such as

mail, telephone, or television, for sending and receiving messages. Communication

is giving, receiving or exchanging ideas, information, signals or messages through

appropriate media, enabling individuals or groups to persuade, to seek information,

to give information or to express emotions.

7.2.1 Definitions of Communication:

The exact meaning of the word communicate is ‘to share’ or ‘to participate’.

However, there is various definition of communication as follows;

���� G.G. Brown – “Communication is transfer of information from one person to

another, whether or not it elicits confidence. But the information transferred must be

understandable to the receiver”

���� Fred G. Meyer - “Communication is the intercourse by words, letters or

messages”

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a) Human communication: Human communication occurs on the

intrapersonal, interpersonal, and public levels. Intrapersonal communication is

communicating with yourself. It encompasses such activities as thought processing,

personal decision making, listening, and determining self-concept.

b) Interpersonal communication: Interpersonal communication refers to

communication that takes place between two or more persons who establish a

communicative relationship. Forms of interpersonal communication include face-to-

face or mediated conversations, interviews, and small-group discussions.

c) Public communication: Public communication is characterized by a

speaker's sending a message to an audience. It may be direct, such as a face-to-

face message delivered by a speaker to an audience, or indirect, such as a

message relayed over radio or television."

7.2.2 Communication and Development:

Communication is used for more than just passing on information from one

person to another. It is often used as a tool to facilitate the participation of people in

developmental activities. Such form of communication is known as development

communication. According to Everett Rogers “Development communication refers to

the uses to which communication are put in order to further development.” The

practice of development communication can be traced back to efforts undertaken in

various parts of the world during the 1940s, but the widespread application of the

concept came about because of the problems that arose in the aftermath of World

War II. The rise of the communication sciences in the 1950s saw recognition of the

field as an academic discipline, with Daniel Lerner, Wilbur Schramm and Everett

Rogers being the earliest influential advocates. The term "development

communication" was first coined in 1972 by Nora C. Quebral, who defines the field

as “the art and science of human communication linked to a society's planned

transformation from a state of poverty to one dynamic socio-economic growth that

makes for greater equality and the larger unfolding of individual potentials”

� Everett M. Rogers - defined development communication as - It refers to the

uses to which communication is put in order to further development.

� Rosario Braid - defined that development communication is “an element of the

management process in the overall planning and implementation of the

developmental programs”

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7.2.3 Role and Importance of Communication in the Development:

Economic development depends on accessible information and communication

to everyone in the nation; even it is required to all levels. Therefore, the

governments should try to ensure that traditional as well as new information

technologies are available to everyone in the nation. Communication also lies at the

heart of marketing system, distribution and sharing information as well as good

governance, where governments are responsive, accountable and capable of

fulfilling their functions with the active engagement of civil society.

1. Social Interaction: Communication activities can help people to

communicate each other’s even from different social groups within a community, to

share information and exchange ideas in a positive and productive fashion. Rural

radio too can be a popular forum where local people do most of the talking about

technical and cultural topics. These activities can lead to a serious diagnosis of

problems and a search for solutions.

2. Communication and Sustainable Development: Communication and

Sustainable Development that has been identified as one of the key issues to be

discussed at the World Congress on Communication for Development (WCCD) in

October 2006. It is conceived as the planned and participatory use of

communication methods and tools that facilitate the sharing of knowledge and

information, participation and change of attitude and practices aiming at achieving

development goals agreed among all stakeholders.

3. Economic Planning: According to Human Development Report 1993,

Communication is central to this task in many ways. For example, it enables

planners, when identifying and formulating development programmes, to consult

with people in order to take into account their needs, attitudes and traditional

knowledge. Only with communication will the project beneficiaries become the

principal actors to make development programmes successful.

4. Agricultural Development : Development communication can play a

significant role in educating, influencing, persuading the farmers, in winning over the

groups who are resistant to change and to speed up the pace of agricultural,

development in order to bring social and economic change. There are two

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perspectives viz., communicator's needs and audience's needs for which we need

communication for development.

5. Circulation of Knowledge: Media plays an important role in development

communication through circulation of knowledge, providing forum for discussion of

issues, teach ideas, skills for a better life and create a base of consensus for

stability of the state

6. Education: Today television in our country is also used as a medium for

social education, weapon against ignorance and awareness among the people,

through its different programs like Educational Television (ETV), Countrywide

Classroom (CWC), Teleconferencing etc.

7. Awareness to Development: Many social institutions and the government

agencies as well as social activists trying to sharing different types of messages to

change the socio-economic condition of people. These messages are designed to

transform the behaviour of people or for improving their quality of life. Therefore,

development communication can be defined as the use of community to promote

development.

8. Public Health Advocacy: Communication plays significant role to aware

people regarding health. It is engaging and empowering, and provides individuals

and populations with evidence-based options for positive action are critical to

enhancing health literacy in society. The Human Rights Commission; Ministry of

Health & Family Welfare [MHFW], Ministry of Women and Child Development

[MWCD]; National Institute of Public Cooperation and Child Development (NIPCCD);

National Rural Health Mission trying to public health through various means of

communication in India.

9. Communication, Entertainment and Human Resources: Today life is

full of stress and anxiety and especially in metropolitan cities situation is the worst

which adversely affecting on efficiency of human resources. Hence, there in need of

entertainment; Entertainment plays a huge importance in human life, because

entertainment does not only provide us with an awesome free time, but it also

influences us. It can give us ideas and it will make us ponder on certain things.

Stimulation of the mind by a subject that interests a person is entertainment.

However, entertainment and communication goes hand in hand therefore the

communication means plays significant role in the entertainment activities.

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10. Communication for Poverty Reduction: Recent advances in information

communication technology (ICT) infrastructure can help alleviate poverty in rural

communities. It will primarily focus on the issue of how to build local capacity, which

has been widely identified as one of the most pressing issues in poverty reduction

globally. Through the means of communication we can provide required information

to them.

7.2.4 Role of Communication: Some Views of Wilbur Schramm:

Wilbur Lang Schramm (August 5, 1907 – December 27, 1987) is sometimes

called the "father of communication studies," and had a great influence on the

development of communication research in the United States, and the establishing

of departments of communication studies in US universities. According to Wilbur

Schramm, the role of media in development can be divided into three parts i.e. (i) to

inform (ii) to instruct and (iii) to participate.

� To inform: for the development of the society, correct social, political and

economic influence is the main criteria. This information should be both national

and international. People should be aware of the areas or facts which hamper

the development process. The communication system makes aware the

peoples about it.

� To instruct: Mass literacy is an essential criteria to development. This is

possible by imbibing basic skills among the people. Mass media plays an

important role in this because it can instruct people and educate them.

� To participate: Voluntary and steady participation of the citizen of the country

is necessary for its overall development. Such participation is possible in a

liberal society. Such awareness is possible through debate, conflict and

discussion.

7.2.5 Means of Communication:

Communication is the sending and receiving of spoken or written messages

between people and places. Traditionally letters are the most common means of

communication. The means of communication assist us to send our messages and

ideas from one place to another and one person to another person. In the modern

world the means of communication have become very important because of busy

schedule of human every one want to faster means of communication which may

save time and money along with efficiency and quality of massage. In old days it

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was very difficult to send our messages and receive messages from remote places

due to the lack of connectivity and non-availability of efficient means of

communication. In modern times we can communicate with far off places easily and

quickly due to the support of technology and innovative ideas in the communication

sector. In this unit we study the traditional and modern means of communication.

7.2.5.1 Traditional Means of Communication:

Traditional means of communication are those which used since long back by

the human to communicate each other. These are also called as local means which

based on use of local materials and methods of communication and based on the

daily lives of ordinary people. The term traditional means of communication refers to

methods used in a specific culture for communication of ideas and dissemination of

information. Sometimes traditional media are closely linked with folk media,

alternative media or folklore. We shall examine some of the important characteristics

of traditional means of communication. According to Lan Mc Donad and David

Hearle (1984) Defined traditional channels of communication as “Those

communication methods which have been used for centuries in rural areas. Such as

songs, plays, stories, puppet shows etc. They are often neglected, though in many

societies they may be most powerful ways of communicating. There are following

traditional means of communication;

1. Human Communication: Human communication is an intentional act

performed by a human agent for the purpose of causing some effect in an attentive

human recipient. Our ability to use language to build words, combine these into

meaningful sequences. It is referred to as verbal, as it encompasses all spoken

words, conversation, folk-tables, proverbs, riddles and jokes, songs, town criers etc

explaining how message is disseminated verbally. Human communication is the act

of conveying a message to another. Talking is the most common form of

communication. However there are also non-verbal communication methods such

as facial expressions and body language.

2. Symbolic Communication: Symbolic communication is exchange of

messages that change a priori expectation of events. Symbolic communication

refers to communication that involves a shared message between the sender and

the receiver. Examples of symbolic communication include speech, sign language,

writing (print or braille), picture communication systems, and tactile communication

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systems. A number of times communication goes on without anybody necessarily

opening his/her mouth to say a word

3. Letters & Telegrams: Letters are a written form of communication which

is used in domestic communication as well as commercial. These can be sent or

received by individuals or organisations. Written messages in the form of letters can

be delivered to the receivers through special messenger, post offices or private

couriers. Telegrams are also a form of written communication by which messages

can be sent rapidly to remote places. It is generally used when there is an urgency

of communicating any important message. However, due to availability of cellular

services in remote areas now telegram communication is almost closed.

4. Folkmedia: Folk media is an effective means of communication in today’s

world since it not only helps connect people with their cultures but also revives the

lost culture of the society. Folk music is yet another popular form of folk media.

Music is governed by the language, colloquial accent, and instruments used by the

local people. Thus, each territorial area has a distinct folk music of its own. Folk-

Media to be used as a most effective way of rural community development

communication. A folk-media can be defined as the ways of transferring the

knowledge and the wisdom to new generation from the past generation. Flokmedia

consists Folk songs, Folk dances, folk dramas, skits and role plays etc.

5. Pigeon Post: Pigeon (Kabutar) post is the use of homing pigeons to carry

messages. Pigeons were effective as messengers due to their natural homing

abilities. The pigeons were transported to a destination in cages, where they would

be attached with messages, then naturally the pigeon would fly back to its home

where the owner could read his mail. The first known use of pigeons as postal

messengers was in ancient Egypt. In 2900 B.C.E. in Egypt, incoming ships released

pigeons as an announcement of important visitors. Even, During World War I, The

American army kept several thousand homing pigeons. The pigeon post which was

in operation while Paris was besieged during the Franco-Prussian War of 1870–

1871 is probably the most famous. There are number of evidences in the Indian

history shows that Mughals and Maratha Kings was used Pigeon post services in

their states.

6. Horses Messengers:Relays of horses were used for long distance postal

services, to keep the Caliphate and the invaders posted about the happenings

throughout their vast territory; There is mention of frequent use of the horse-collar,

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the breast strap, the cross-bow, the stirrup, and even the wheelbarrow for rendering

the horse service swift.

7. Printing: History of print media and written communication follows the

progress of civilization which, in turn, moves in response to changing cultural

technologies. The transfer of complex information, ideas and concepts from one

individual to another, or to a group is easy with printed material. The invention of

printing was preceded by the manufacturing of paper. Printing was first invented in

China in 846 B.C. The Chinese used wooden plates for printing. A method of

printing for decoration and ornaments existed in India already in 200 BC. Printing is

one of the best methods for transferring massage. Even, this method is very useful

in the business as well as domestic sector. Now there are various type of printing

methods available i.e. Offset printing, Offset printing, Digital printing, Flex printing

etc.

8. Postal Communication: Postal communication is one of the important

communication service provided by the public and private sector in India. This is

very rational method of communication in ancient as well as modern India. Even this

means are common in the rural as well as urban areas of the Indian peoples. Today

almost all communications are performaed based on postal services in India. One of

the earliest evidence of a systematic postal service using foot messengers is found

during the reign of Chandragupta Maurya (322-298 B.C.). A courier service between

the capital and the outlying provinces of the vast kingdom served the needs of

intelligence gathering and collection of revenue data, whence regular messengers,

doots (emissaries) and pigeons were used for conveying the royal communication.

The origin of the postal system during the Muslim rule can be traced to the conquest

of Sind by the Arab ruler of Iraq, Mohammad bin Qasim, in 712 A.D. The Arab chiefs

established many territories which necessitated maintenance of a regular line of

communication with the Caliph of Bagdad, for military intelligence and administrative

instructions. The special horse couriers carried letters from Caliph to Qasim on

every third day and from Iraq to Sind in seven days.

The British East India Company opened a post office in Bombay in 1688 under

the name “Company Mail”, followed by similar offices in Calcutta and Madras.

Although courier services connected larger towns with their regional seats of

government, there was no integrated postal service operating before 1837; existing

services were not generally intended for personal mail Lord Clive established a

postal plan (known as Jamidara Pratha) on 24 March 1766 in West Bengal. The

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system was reorganised and made available for public use on 31 March 1774, in

1778 in Madras and 1792 in Bombay. Now, the Government of India has a

department of Posts and Telegraphs. It has thousands of post offices all over the

country. The postal department carries our mail, money orders and parcels to all

parts of India and the world and delivers it to our friends and relatives for whom they

are meant. As of 31 March 2011, the Indian Postal Service have 1,54,866 post

offices, of which 1,39,040 (89.78 percent) were in rural areas and 15,826 (10.22

percent) in urban areas. Mail is collected from 573749 letter boxes in the country.

This is processed by a network of 387 Mail Offices, and conveyed by road, rail and

airlines all over the country.

Major Highlights of Postal Services in India

� India has the largest Postal Network in the world with 1,54,866 Post Offices

� On an average, a Post Office serves an area of 21.23 Sq. Km. and a population

of 7,814 people.

� Mail is collected from 573749 letter boxes in the country.

� Speed Post service was introduced in 1986 to provide fast and time bound

delivery service between seven major cities in the country.

� Instant Money Order (IMO) is an online domestic money transmission service

intended for a market clientele requiring instant money remittance.

� The Department of Posts launched Electronic Money Order-eMO on

10.10.2008. Electronic Money Order is a system that facilitates remittance of

MOs electronically

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� Money Order Videsh facilitates remittances to foreign countries and receipt of

remittances from foreign countries through the medium of Post Office

� India Post launched a pilot project for e-Commerce business with the brand

name ‘e-Post Office’.

� There is a separate wing called the Army Postal Services (APS) to take care of

postal needs of the Armed forces.

� Department of Posts has introduced a number of business products and

services such as Speed Post, Express Parcel Post, Business Post, Bill Mail,

ePost, Direct Post, Logistic Post, Retail Post, eBill Post etc

9. Newspapers and Magazines: Newspapers are the oldest kind of

communication but it is most important mean of communication in the every country.

The earliest newspaper was issued in 17th century Europe when printed periodicals

began rapidly to replace the practice of hand-writing newssheets. In the world of

magazine The Gentleman's Magazine, first published in 1731, in London, is

considered to have been the first general-interest magazine. Edward Cave, who

edited The Gentleman's Magazine under the pen name "Sylvanus Urban", was the

first to use the term "magazine", on the analogy of a military storehouse of varied

materiel, originally derived from the Arabic makhazin "storehouses". However, The

history of newspaper in India began in 1780, with the publication of the Bengal

Gazette from Kolkata. The first Marathi fortnightly newspaper 'Darpan' was started

by Balshastri Jambhekar on 6th January 1832. On 27th April 1832 'Darpan' became

weekly, which was having 8 pages But it was closed on 26 June 1840. First Marathi

daily 'Dyanprakash' was started on 12 Feb. 1849. On 2nd Jan 1881, 'Mahratta' in

English and on 4th Jan 1881 'Kesari' were founded by Lokmanya Tilak. Kesari &

Mahratta were founded as a mean to educate people against the slavery of British

Rule. Now there are number of newspapers and magazines published in various

languages in India i.e. Sakal, Loksatta, Times of India, Indian Express, Navbharat

Times etc. and Magazines like Business India, Economic and Political Weekly

(EPW), India Today, Readers Digest, Lokprabha, Baliraja etc. India has four news

agencies namely, the Press Trust of India (PTI), United News of India (UNI),

Samachar Bharti and Hindustan Smachar. Newspapers and magazines in India are

independent and usually privately owned. About 5,000 newspapers, 150 of them

major publications, are published daily in nearly 100 languages. Over 40,000

periodicals are also published in India. These newspapers and magazines

M.A. II- Economics- Economics Transport and Communication

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contribute a great deal to the development of our knowledge and information

regarding various issues as well as current affairs. Through valuable and subtle

critical and commentary articles on culture, social civilization, new life style we learn

a lot of interesting things. Newspapers and magazines supply us with a variety of

news every day. They keep us informed of the political situation of the world.

7.2.5.2 Modern Means of Communication:

In the modern world the means of communication have become very important.

In old days it was very difficult to send our messages and receive messages from far

off places. This sending and receiving of messages and ideas is known as

communication. In modern times we can communicate with far off places easily and

quickly.

1. Radio Broadcasting: Radio is a scientific device that functions as an

effective auditory instrument for communication. It also plays an important role in

education. It is not only informs, but also inspires human being for learning more

and more. The concept of the radio first came about in 1879 however it was not

really perfected until 1922 when the first radiobroadcast occurred in 1922 in

Pittsburgh. Broadcasting by radio takes several forms. These include AM- and FM

stations. AM broadcasting is the process of radio broadcasting using Amplitude

Modulation-AM. AM was the first method of impressing sound on a radio signal and

is still widely used today. FM broadcasting is a broadcasting technology pioneered

by Edwin Howard Armstrong which uses Frequency Modulation (FM) to provide

high-fidelity sound over broadcast radio.

2. Cinema :Cinema is the most effective mass media instrument which is

transmitting massage efficiently in the society. Besides proving cheap entertainment

for masses, it can easily become a means of mass instruction and mass education

in all over the world. The social and moral values are conveyed through the medium

of cinema. This is proved as instrument of change of society and passing massage

and instruction to the masses.

3. Television: Television has been given considerable importance in many

countries especially in India as a source and a tool of teaching and communicating

to masses. The television is used for formal, non-formal and informal education in

India. To support formal education, television usually function as supportive and

reinforcement tool. Television act for communicate information, idea, skills and

attitudes etc.

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4. Telegraph & Fax: Telegraph is the long-distance transmission of

messages without the physical exchange of an object bearing the message. The

first commercial electrical telegraph was constructed by Sir Charles Wheatstone and

Sir William Fothergill Cooke, and its use began on April 9, 1839. Morse successfully

demonstrated this system on September 2, 1837. Fox sends exact copy of a printed

message or picture to another machine located anywhere in any part of the world

which is connected with telephone line or other networking system. Scottish inventor

Alexander Bain worked on chemical mechanical fax type devices and in 1846 was

able to reproduce graphic signs in laboratory experiments. He received the first fax

patent in 1843. Fax machine is basically connected to telephone line and it having

scanner which scan the paper inserted in the fax machine and send its digital image

to intend fax machine located in another side. Machine located at another side

receive digital image and print it on another page. Using a fax machine is much

faster than sending an item through the Postal or courier service.

5. Telephone: A telephone is a device for communications that transmits and

receives sound. Telephones are a point-to-point communication system based on

digital technology whose most basic function is to allow two people to talk to each

other from different locations. This technology was developed by Alexander Graham

Bell in the mid-1870s. In an analog telephone network, the caller is connected to

the person he wants to talk to by switches at various telephone exchanges. The

switches form an electrical connection between the two users and the setting of

these switches is determined electronically when the caller dials the number.

6. Satellite telephone: A satellite telephone, satellite phone, or satphone is a

type of mobile phone that connects to orbiting satellites instead of terrestrial cell

sites. They provide similar functionality to terrestrial mobile telephones; voice, short

messaging service and low-bandwidth internet access are supported through most

systems. Satellite phones send and receive signals from satellites orbiting the earth.

The biggest advantage of a satellite phone is that subscriber can make calls in

remote locations there is no need of coverage of towers of cellular service providers

because it works through satellite directly. The satellite phones are capable of

making and receiving calls anywhere in the world excluding those areas restricted

by the governments. But is not used by everyone because it is costly than common

cellular service.

7. Mobile Phone/Cell Phone: A mobile phone also known as a cellular

phone, cell phone and a hand phone; is a device that can make and receive

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telephone calls over a radio link while moving around a wide geographic area. It

does so by connecting to a cellular network provided by a mobile phone operator,

allowing access to the public telephone network. By contrast, a cordless telephone

is used only within the short range of a single, private base station. In addition to

telephony, modern mobile phones also support a wide variety of other services such

as text messaging, MMS, email, Internet access, short-range wireless

communications (infrared, Bluetooth), business applications, gaming and

photography. Mobile phones that offer these and more general computing

capabilities are referred to as smartphones. The first hand-held mobile phone was

demonstrated by John F. Mitchelland Dr Martin Cooper of Motorola in 1973, using a

handset weighing around 2.2 pounds (1 kg). In 1983, the DynaTAC 8000x was the

first to be commercially available. From 1990 to 2011, worldwide mobile phone

subscriptions grew from 12.4 million to over 6 billion, penetrating about 87% of the

global population and reaching the bottom of the economic pyramid.

� This devices are uniquely identified by an International Mobile Equipment

Identity (IMEI) number

� It works based on SIM- Subscriber Identity Module card it is a small microchip

� A hybrid mobile phone can hold up to four SIM cards.

� GSM (Global System for Mobile Communications, originally Groupe Spécial

Mobile), is a standard set developed by the European Telecommunications

Standards Institute (ETSI) to describe protocols for second generation (2G)

digital cellular networks used by mobile phones.

� Code Division Multiple Access (CDMA) is a channel access method used by

various radio communication technologies.

� In many countries, mobile phones are used to provide mobile banking services,

which may include the ability to transfer cash payments by secure SMS text

message.

� General packet radio service (GPRS) is a packet oriented mobile data service

on the 2G and 3G cellular communication system's global system for mobile

communications (GSM).

� Enhanced Data rates for GSM Evolution (EDGE) (also known as Enhanced

GPRS (EGPRS). It is a digital mobile phone technology that allows improved

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data transmission rates as a backward-compatible extension of GSM. EDGE is

considered a pre-3G radio technology

8. 3G & 4G Mobile Telecommunications: 3G, short for third Generation, is

a term used to represent the 3rd generation of mobile telecommunications

technology. Also called Tri-Band 3G. This is a set of standards used for mobile

devices and mobile telecommunication services and networks that comply with the

International Mobile. In telecommunications, 4G is the fourth generation of mobile

phone mobile communications standards. It is a successor of the third generation

(3G) standards. A 4G system provides mobile ultra-broadband Internet access, for

example to laptops with USB wireless modems, to smartphones, and to other mobile

devices. Conceivable applications include amended mobile web access, IP

telephony, gaming services, high-definition mobile TV, video conferencing and 3D

television. In India, Bharti Airtel launched India's first 4G service, using TD-LTE

technology, in Kolkata on 10 April 2012.

9. Videotelephony: The development of Videotelephony involved the

historical development of several technologies which enabled the use of live video in

addition to voice telecommunications. The concept of Videotelephony was first

popularized in the late 1870s in both the United States and Europe. Video telephony

is full-duplex, real-time audio-visual communication between or among end users. It

is two-way communication comprising both audio and video elements. Participants

in a video telephone call can both see and hear each other in real time. Now, fast

telecommunication services like 3G or 4G are enabled these services in most of

cities in India.

10. Websites: Websites are one of the advanced methods of communication.

Using websites we can place the information or data to intend users or precipitants.

There are two types of websites one is informative website which only provides

information and another is interactive website which interactive web page is such a

web page that allows it's visitors to communicate with it. Visitors are allowed to

make actions related to web page's content.

11. Electronic Mail-email: Electronic mail, commonly referred to as email or

e-mail, is a method of exchanging digital messages from one account to another

account. Email account is digital account which is unique account for specific person

or sender of mail which offer mailing service through the internet. With the use of

email we can send text massage and any digital attachment like word, excel, PPT

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file, video, image, music file and other specified digital items other than software.

Email ID and password are important things for sending email, we cannot open

email account and send or read email without proper email ID and password. There

are number of email service providers in the world i.e. Gmail, Hotmail, Yahoo mail,

AOL Mail, Pobox, Inbox, Fast mail etc.

13. Teleconferencing: Teleconferencing in the innovative idea of

communication; it is fully based on modern communication technology. Through this

method meeting conducted by using internet, telephones or cell phones without

requiring attendees to be physically present in the same physical area. In the

teleconferencing audio or audio-visual meeting conducted between geographically

separated persons or parties connected by advanced telecommunication networks

such as telephones or internet. Teleconferencing allows discussions and meetings

between two or more than two (multiple) parties in different locations.

14. Audio Teleconferencing: Audio Teleconferencing is meeting or

communication based on telephone or cellular technology of communication. It is

based on vice transferring system only there is no video or visual appearance of the

parties involved in the meeting. Audio Teleconferencing earliest version of

conferencing where telephone, cellphones and other electronic devices are used

conferencing.

15. Video Teleconferencing : Video conferencing is one of the advanced

versions of teleconferencing where either parties or multiple parties can listen and

watch each other’s through video cameras or web cameras connected through

internet and communication technology. Video Teleconferencing avails parties to

make face to face contact with video or visual effects. Sometime it called Internet

based Teleconferencing also. The web/internet conferencing service allows users

from multiple locations across the world to join a single conference and collaborate

at the same time. Now there are various communication service providers are

providing these type of services to their clients i.e. Skype, iChat, Video chat by

Gmail, VSee etc.

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Other Internet Based Means of Communication:

The Internet is a worldwide network of computers and computer networks that

can communicate with each other using the Internet Protocol. Now, there are