A preliminary assessment of the rationale and scope of implementing congestion pricing in Delhi NCR
Student name: Ms Parul Gupta
Guide: Dr Suresh Jain
Year of completion: 2011
Host Organisation: Yale School of Forestry and Environmental Studies
Supervisor (Host Organisation): Dr Ellen Brennan-Galvin
Abstract: Delhi has witnessed substantial growth in population, income and vehicles over the past few
years. The projected trends indicate further rapid growth of these variables, which could
result in worsening of the traffic congestion problem in the metropolis. Traffic congestion is
an urban menace that imposes several costs on the society. This negative externality is a
result of the social costs not being taken into account by individual decision-makers.
Congestion pricing is a manner through which the social costs can be internalized into private
decision making, thereby eliminating the externality. Given the recent interest of the Delhi
Traffic Department in this policy, it is essential to examine its potential welfare impacts. This
study attempts to achieve the following objectives: determine the congestion costs and assess
the rationale of introducing congestion pricing in Delhi; discuss the features critical to the
success of congestion pricing and identify the existing knowledge gaps scope for further
research into this area. The qualitative results offer a strong rationale for implementing a
comprehensive policy with congestion pricing as its central component. The recent
experience of other cities with this measure provides useful insights into designing and
implementing the policy to ensure maximum welfare gain. The analysis emphasizes the role
of political will and commitment and the importance of efficient design and enforcement
measures in framing an effective policy.
Keywords: traffic, congestion pricing, external congestion costs, externality, policy design,
enforcement
