It is quite possible that not being an economist, I have conflated and confused all the rich nuances of economics such as “Supply-side economics”, “Trickle-down theory”. But, I think I am better than Ronald Reagan when it comes to comprehending economic theories. If he could have talked about these concepts and sold it to the American public, so can I, to the Indian public.
“Supply side economics” was the brain child of some economist named Laffer, of the Laffer Curve fame (without the curve the name carried no fame)! Reduce taxes, economic activity picks up, receipts go through the roof, and benefits “Trickle down”. The theory has been caricatured memorably as, “If you feed the horse enough oats, some will pass through to the road for the sparrows.”
I got you precisely where I want you to be – on the road, particularly on the recently opened Mumbai Eastern Freeway. It is a 17 km long roadway (a segment of it is not completed yet) with a 17.2 m wide elevated section that provides fast corridor between south Mumbai and its eastern suburbs, as mentioned in a news dispatch Mumbai Eastern Freeway thrown open to public, in The Hindu of June 14, 2013. But, there is a catch. You cannot be on a two-wheeler or in a three wheeler, either as a driver or as a passenger on this freeway. Free or not, it is not for you. These commuter vehicles, along with “heavy vehicles” are not “allowed on the freeway.” I would imagine BEST buses are also not allowed on the freeway. After all, they have to be provided up and down ramps every ½ a kilometer or so, or bus bays of sufficient length have to be provided with up and down stairs and escalators/elevators. Too expensive. Let buses take the surface level roads. I almost sounded like Marie Antoinette, didn’t I?
Then, you start asking some stupid questions. “So, who exactly does the freeway serve?” Obvious isn’t it? People who were born in cars, grew up in them, living in them in style and will probably die in them too. “Would the freeway benefit the others?” Yes, of course. “How?” Bring on “Supply side economics.”
“Why was the Eastern Freeway built?” To reduce the travel time from about 45 minutes to 20 minutes. “OK, but this will be only for the cars, will it not?” No. You do not understand “Supply-side economics”. It was these cars that had created the traffic jam on surface level roads in the first place, which made the trip so tedious, over 45 minutes. Now that the cars have been taken on to the elevated road, traffic down below will be eased and even the two-and three-wheelers, not to mention the “heavy vehicles”, will negotiate the distance in 20 minutes flat. True, the cars were “supplied” with additional road space but so have the other less privileged vehicles, at one remove. See how the “Trickle-down theory” works!
“But, what is this I am hearing, that there will be no toll on this freeway? It is truly ‘free’!” Again, you do not understand. Have you ever heard of double jeopardy or double taxation? The cars on the freeway are already subsidizing the commuters below, time is money, you would agree. Why should they pay again for using the freeway? Think before asking such questions that expose your stupidity.
A few other interesting tidbits. It cost Rs. 1,260 crore; taking that as the cost for the 14. 3 km stretch already constructed, the rate per square meter of road surface is about Rs. 50,000. Some of that money has come from JNNURM.
Oats to the horses, the subsidy to the cars, does not necessarily pass through to the swallows, the other vehicles on the road below. We live in strange times.
Raghuram Ekambaram
.
“Supply side economics” was the brain child of some economist named Laffer, of the Laffer Curve fame (without the curve the name carried no fame)! Reduce taxes, economic activity picks up, receipts go through the roof, and benefits “Trickle down”. The theory has been caricatured memorably as, “If you feed the horse enough oats, some will pass through to the road for the sparrows.”
I got you precisely where I want you to be – on the road, particularly on the recently opened Mumbai Eastern Freeway. It is a 17 km long roadway (a segment of it is not completed yet) with a 17.2 m wide elevated section that provides fast corridor between south Mumbai and its eastern suburbs, as mentioned in a news dispatch Mumbai Eastern Freeway thrown open to public, in The Hindu of June 14, 2013. But, there is a catch. You cannot be on a two-wheeler or in a three wheeler, either as a driver or as a passenger on this freeway. Free or not, it is not for you. These commuter vehicles, along with “heavy vehicles” are not “allowed on the freeway.” I would imagine BEST buses are also not allowed on the freeway. After all, they have to be provided up and down ramps every ½ a kilometer or so, or bus bays of sufficient length have to be provided with up and down stairs and escalators/elevators. Too expensive. Let buses take the surface level roads. I almost sounded like Marie Antoinette, didn’t I?
Then, you start asking some stupid questions. “So, who exactly does the freeway serve?” Obvious isn’t it? People who were born in cars, grew up in them, living in them in style and will probably die in them too. “Would the freeway benefit the others?” Yes, of course. “How?” Bring on “Supply side economics.”
“Why was the Eastern Freeway built?” To reduce the travel time from about 45 minutes to 20 minutes. “OK, but this will be only for the cars, will it not?” No. You do not understand “Supply-side economics”. It was these cars that had created the traffic jam on surface level roads in the first place, which made the trip so tedious, over 45 minutes. Now that the cars have been taken on to the elevated road, traffic down below will be eased and even the two-and three-wheelers, not to mention the “heavy vehicles”, will negotiate the distance in 20 minutes flat. True, the cars were “supplied” with additional road space but so have the other less privileged vehicles, at one remove. See how the “Trickle-down theory” works!
“But, what is this I am hearing, that there will be no toll on this freeway? It is truly ‘free’!” Again, you do not understand. Have you ever heard of double jeopardy or double taxation? The cars on the freeway are already subsidizing the commuters below, time is money, you would agree. Why should they pay again for using the freeway? Think before asking such questions that expose your stupidity.
A few other interesting tidbits. It cost Rs. 1,260 crore; taking that as the cost for the 14. 3 km stretch already constructed, the rate per square meter of road surface is about Rs. 50,000. Some of that money has come from JNNURM.
Oats to the horses, the subsidy to the cars, does not necessarily pass through to the swallows, the other vehicles on the road below. We live in strange times.
Raghuram Ekambaram
.
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