How do free metro rides for women in Delhi affect the transport revenue?

On June 3, Chief Minister Arvind Kejriwal announced the move that the Delhi Government wants to make riding on metro trains and public buses free for all women. The move is yet to be cleared by the Central Government but is expected to be launched in the next three months.

Presently 33% of the current metro users are women, and the Delhi government with this initiative wants to increase the number of women travellers in metros as they serve as a safer option of public transport as compared to other means.

Another point to note here is that it has been observed that metro travellers are price sensitive, meaning that with a slight increase in the prices of the metro fares, the people shifted to using other modes of public transport. The statement is backed by the fact that daily ridership fell by 3,00,000 after the fares were increased by the Delhi Metro Rail Corporation in 2017. Hence providing the service of metro’s for free to women, who’s safety is an alarming issue in the capital, seems about the right thing to do.

However it’s when you take your rose coloured glasses off, you look at the failure that this move might bring along upon its execution.

First of all, even though this scheme is implemented to help out women who can’t afford to travel by metro, its advantage will be very well taken by even those who can. Offering free metro rides to almost 48% of the citizens in the city will create a huge problem of an unforeseen number of people opting to travel by metro. Next thing you know, due to the problem of overconsumption, not only will the metro’s become a very inconvenient mode of transport but will also result in problems like delay’s, stamped and chaos.

With the pros and cons out of the way, the question arises- Who is paying for these lakhs of free metro rides?

The free bus and metro travel proposal for women is expected to cost the Delhi government Rs 700 crore approximately on an annual basis. In other words, it’s the money of the taxpayers that will be used to budget this scheme. However that being said, the revenue of the Delhi Metro Rail Corporation is well protected as it will be backed by the State Government. Although this shouldn’t be an issue but the metro line stretches from Gurugram in Haryana to Noida in Uttar Pradesh, hence the taxpayers of Delhi might have an opinion on the same

The final report is yet to be issued by the State Government and the plan will then await its clearance by the Central Government. Only time will tell if this plan is successful in keeping up with the expectations of the people.

For more such blogs related to finance, planning and markets, keep following us.

---

Cedrus Wealth Partners

Pune, Maharashtra.

www.cedruswealth.com