Replacing Kolkata trams with battery operated electric buses is a bad financial move

The recent announcement by West Bengal transport minister Firhad Hakim has practically signaled the death knell of Kolkata tramways the only city in India which still operates trams. The plan is no more to revive the tram route in the popular north Kolkata route. The plan now is to operate trams only in routes where dedicated carriage way exists for trams. This in turn implies one or two routes in south Kolkata where trams can operate if we go by the minister’s policy decision. There is a plan to operate trolley bus on trial basis in the coming year in north Kolkata tram routes using the existing overheard electricity wires of tram though substantial modification is required to amend it for trolley bus including installation of additional wires. The final decision to introduce trolley bus will be made if the trial operation is found to be successful. In the meantime the focus is on battery operated electric bus (BEB) for which the Kolkata Transport Corporation has given substantial order. Given the financial condition of the Kolkata Transport Corporation ideally the choice should be primarily based on what mode is the least costly taking into account the life cycle of the transport medium which basically includes all-inclusive operation costs in addition to the capital cost of purchasing the vehicle (electric bus tram trolley bus). This also needs to be normalized based on the carrying capacity of the vehicle.

Trams are three times more energy-efficient than most buses. Their use of mains electricity is more efficient than rechargeable batteries in electric buses. They provide a higher capacity service (you can get more people on them and can add and remove cars as you need) with just one driver. Research in Europe and North America shows that car commuters are willing to transfer some trips to rail-based public transport but not to buses. Typically light rail systems attract between 30-40% of their patronage from former car trips. Controlled acceleration and braking make for a more comfortable passenger experience. Incidentally the tram workshop at Nonapukur has successfully built several trams. It would be cheaper to use the facility to build new trams there than acquiring new BEBs. By all evidence electric bus seem to be the preferred choice of Kolkata State urban transport. Incidentally this is also a costly proposition which may aggravate the financial health of the corporation. Somehow CNG/biofuel based bus does not seem to a preferred choice for the corporation. Ideally one should have looked at the cost estimate before making an informed choice.

If we go by the current price acquisition costs of electric buses is more than twice of a normal CNG based bus. Of course the price of trolley/hybrid bus is about 20% lower than that battery operated electric bus.

Coming to Vehicle Operating Costs (VOC) fuel represents 40% of the total life-cycle costsof CNG buses. Lower consumption by hybrid and electric buses translates into savings of up to 15% in VOC for hybrids and 40% for electric buses.

A major cost of battery operated electric bus is battery replacement. The batteries typically need replacing after 6 to 8 years while the lifespan of buses ranges from 10 to 12 years meaning batteries needto be replaced at least once during the life-cycle of a bus. Battery replacement represents 15% of the purchase price of a hybrid bus and 50% of the price ofan electric bus. If the battery needs to be replaced twice for a battery operated electric vehicle obviously it would be a heavy burden on the transport authority. There are other cost issues which need to be accounted when one considers BEB. Firstly because of issues like charging downtime and maximum passenger load restrictions caused by battery weight a BEB fleet using depot charging needs to be at least 20% larger than a diesel or trolleybus fleet to maintain the same timetable and passenger throughput. Thus a BEB fleet of 300 is needed to replace a bus or trolleybus fleet of 250 vehicles. The comparison with tram is starker as the carrying capacity of two-carriageway tram is more than two BEBs.

Secondly a BEB fleet typically needs to be 20% bigger than for the equivalent diesel or trolley bus fleet. The installation of large transformers Energy Storage System (ESS) and backup generators together with the individual charging units will also take up additional space. Thus one needs large depot space which may cost a lot in a city like Kolkata which suffers from chronic space shortages.

BEB is not a good option considering the financial health of Kolkata urban transport corporation. And of course not at the cost of the tram when we see a revival of trams in many European cities. The off-repeated assertion that trams cause congestion is not right as the congestion mostly takes place due to other vehicles encroaching upon tram routes.

Sanjib Pohit is a Professor at National Council of Applied Economic Research. Views are personal.

India Policy Forum 2021

The 18th India Policy Forum 2021 Volume comprises papers and brief details of the proceedings of the IPF Conference held virtually during 12-15 July, 2021. Apart from presentation of four papers, the IPF Conference also included two lectures, the 3rd T.N. Srinivasan Memorial Lecture, titled, “Responding to COVID-19 amidst Market and Government Failures”, delivered by Professor Shanta Devarajan, Georgetown University and NCAER, and the Annual IPF Lecture, titled, “Federalism during the Pandemic”, delivered by Mr N.K. Singh, Chairman, Fifteenth Finance Commission and former member of the Rajya Sabha. In addition, the 2021 IPF featured two Roundtables focusing on “Future of India’s Economic Reforms: 30 Years after ‘bata teri raza kya hai (What’s your wish?)’, Looking Back to Look Ahead” and “India Emerging from the Long Shadow of COVID-19”.

2021, Volume 18, Papers




Policy Roundtables



The complete set of IPF Volumes, can be viewed and downloaded here.

Input Output Transactions Table 2017-18 Himachal Pradesh

Input-Output Transactions Table (IOTT) is the matrix representation of a nations or a regions economy, and is used to analyse the inter-industry relations therein, depicting how the output of one industry is used as input in other industries, thereby making each industry dependent on other industries both as an user and as a supplier. It, therefore, is the depiction of all monetary transactions that take place among the production sectors (industries in the case of industry approach and commodities in the case of commodity approach) and also with the final users. The construction of an IOTT starts with the preparation of two of its key pre-requisite matrices, that is, Supply Table and Use Table. The present study prepares these matrices first and then converts these into IOTT for the state of Himachal Pradesh, which makes this study the first of its kind for any state in India.

Should we have been surprised by the Agnipath protests?

A government job with its benefits and safety net is an aspiration for most Indians. Any perceived rollback in such employment opportunities is bound to fuel anxiety.

What is surprising about the protests is that the government appears to be surprised that there should be any protest. To appreciate the anguish underlying these protests we must look to the importance of government protests service in the lives of individuals.

Despite the widespread belief that multinational employers shape private sector salaries only a select few manage to get these high-paying jobs. For most private-sector employees wages are far lower than for their brothers and sisters fortunate enough to get a job in government. Data from the Periodic Labour Force Survey (PLFS) of 2019-20 document these differences.

 The PLFS provides data on salaried monthly income for employees and self-employment income for individuals working on family farms and businesses. In round figures based on my calculations from these data for men ages 15-59 monthly government salaries are about 128000 wages in private companies are about 17000 and monthly self-employment earnings are ₹6000. The public sector advantage is even starker for individuals without a college education. Among men with Class 10-12 education government employees earn 125000 per month more than double the salary of 12000 in private companies.

The benefits of public sector employment are not limited to higher salaries. These jobs come with many benefits that are not available in the private sector particularly for individuals without higher education. Among government sector employees with Class 10-12 education 72% are eligible to receive PF (provident fund) or a pension while 47% receive gratuity often in addition to a pension. In contrast among employees in a private firm 53% are eligible to receive PF or a pension and 26% receive gratuity. Those working for private employers have even lower claims to any benefits.

Security of employment

Most importantly government employees can look forward to a relatively secure position even during emergencies like the COVID-19 pandemic. A survey of the Delhi NCR region in June 2020 by the National Data Innovation Centre at NCAER shows that during the first sudden lockdown during COVID-19 56% of private sector employees experienced income loss compared to 21% of government employees.

When coupled with predictable salary revisions and an increase in dearness allowance it is not surprising that being employed by the government has emerged as the pinnacle of ambition for young Indians. The India Human Development Survey of 2011-12 conducted by NCAER and the University of Maryland shows that most parents and young people fervently hope for a government position. When asked about the jobs they would like to see in their teenage children’s future two-thirds of the respondents said they preferred government jobs.

Herein lies the challenge faced by the Agnipath scheme. It offers many benefits to the nation allowing India to draw on its demographic dividend and keep its armed forces consistently enriched by young fit and technologically savvy jawans. It offers well-paid jobs and training for individual recruits allowing them to leave the service with a capital of ₹11 lakh at the end of the four-year contract. Moreover there is an opportunity for one-fourth of the Agniveers to be absorbed by the armed forces as regular recruits.

Following the protests the government has offered various other incentives including priority employment in defence-related public sector undertakings and Central Armed Police Forces.

Anxieties over Agnipath

However this scheme also withholds the dream of lifelong security where a 40-year-old after 20 years of service is completed can expect to draw a pension for the remainder of his natural life. This security has become even more precious after implementing the “One Rank One Pension” scheme which will allow this pension to grow over time.

The strident demand for regular employment in the armed forces echoes other youth movements India has seen over the past two decades. The requests for reservations among Jats Patels and Gujjars are also rooted in worries over the employment situation and perceived benefits of a “ sarkari naukri” (government job). Although employment generation remains on the national agenda government employees’ disproportionate benefits compared to their brothers and sisters in the private sector have received little attention. Most government employees belong to Class C and Class D categories and most military personnel belong to lower ranks. The options in the private sector are limited for this category of employees and they have the most to gain from a government position.

It seems likely that the Agniveer protests and other protests of this kind (for example protests for reservations) would become even more strident if inflation continues to rise and government salaries keep pace with the inflation with continuous adjustment in DA (dearness allowance) while the private sector incomes languish. Recent newspaper reports about the likelihood that the DA arrears from the past 18 months will be paid in July will add to the current protests’ tensions. Until government salaries are on par with private-sector salaries government jobs including jobs in the military will remain the lodestar and competition for these jobs will be fierce.

Role of government as employer

The present protests highlight the need to reflect on the role of government as an employer and examine the underlying philosophy governing the social contract between the State government employees and society at large. Two contradictory philosophies add to the tension. The first viewpoint argues that the State as the first employer of the nation is supposed to set the standards for fair wages and decent working conditions. The second viewpoint suggests that government workers are public servants whose salaries depend on direct and indirect taxes paid by the rest of the nation’s workers. Hence privileging their working conditions over those of their equally qualified brothers and sisters is not justified.

Our public policy has seesawed between these two principles. At Independence the nation made a conscious choice to dismantle the privileges enjoyed by the colonial civil servants refusing to let the Indian Administrative Services enjoy the perks and privileges available to the elite recruits in the Raj-era Indian Civil Services (ICS). However successive Pay Commissions have moved in the opposite direction by increasing the salaries and benefits of the government workers including the armed forces. Therein lies the root of our present dilemma.

As the government debates future salary adjustments for government workers and whether to set up the 8th Pay Commission the Agnipath protests combined with a host of other protests for reservations suggest a need to develop a more holistic perspective on government employment.

(Sonalde Desai is Professor and Centre Director NCAER National Data Innovation Centre and Professor of Sociology University of Maryland. Views are personal.)

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