The COVID-19 hit to India’s transportation sector

Note: this is the fourth edition of our weekly newsletter, the Databyte. To receive it in your inbox every Sunday, subscribe here.

A world after

Since the past two weeks, my twitter timeline was flooded with tips and opinions on improving productivity while working remotely. We’re based out of Delhi, and last week all of us started working from home. While I work remotely for a large part of the year, this took me back to the dreaded times of looking for a house in Delhi. As many others who have the privilege, I would always optimise for commute time and distance over all else.

Yesterday, the Maharashtra government announced that the Mumbai locals will be shutting its services for everyone except those working in essential services till 31st March. Delhi Metro has also announced a staggered plan to reduce the number of trains. For most Indians, the next couple of months are going to look drastically different.

As Yuval Noah Harari puts it in this piece in the Financial Times, in the world after CoronaVirus, many short-term emergency measures will become a regular fixture of life. 

What happens when everybody works from home and communicates only at a distance? What happens when entire schools and universities go online? In normal times, governments, businesses and educational boards would never agree to conduct such experiments. But these aren’t normal times.

Yuval Noah Harari in FT

Public transport is huge for Indians commuting to work, especially in the cities. 44% of Mumbaikars rely on public transport to get to work. Just 9% rely on private vehicles and 20% reported to have no travel. Explore the data from Census here on this visualisation.

Not only longer commute times and distances, transportation also accounts for a sizeable chunk of the household wallet. Indian households are classified into four categories based on WHO’s global income distribution data, which rank the global population by income per capita. The lowest consumption segment corresponds to the bottom half of the global distribution, spending less than $2.97 per day (58.8% of India’s population); the low consumption segment spending between $2.97 to $8.44 a day (36.5%); the middle consumption segment ($8.44-$23.03, 4.6%); and the higher consumption segment and above (>$23.03, 0.1%).

Spending on transportation increases from the lower income households to the higher income households. However, across consumption segments, annual expenditure on transport is still greater than spending on health and personal care (here, included in Others) or even education.

These expenditures on transport include purchase of vehicles, fuel costs and other transportation costs (public + private).

Also, these are only for household expenditures. The effect on corporate expenditures on transport and travel will be much more amplified. In a video message last week, Arne Sorenson, CEO, Marriott International characterized the coronavirus crisis as more severe for the hotel chain than the Great Depression and World War 2. He added that the chain’s global business is running about 75 percent lower than normal, hundreds of hotels have closed, and some may never re-open.

According to the Periodic Labour Force Survey, 2017-18, close to 8% of India’s population is employed in transportation (4.5%) , travel and accommodation services (3.5%).

Apart from transport, the effects will be felt on a variety of sectors. In the first edition of this newsletter, I wrote on internal migration within the country. 38% of Indians, are migrants, either within the state or outside. Mumbai and Pune railway stations were packed with people on Friday and Saturday leaving for their hometowns as offices started shutting shops.

Of course, not everyone can work from home. But, people belonging to the higher consumption segment certainly can. And, 20% of their total household expenditure goes into transportation. Additionally, as employment gradually moves from agriculture and casual labour to services and skilled labour, this number will increase. 

To sum it up, a large chunk of the population commutes large distances to work, mostly using public transport, they spend more than 5% of all household expenditure on it, and the industry accounts for 8% of all people employed. If these emergency short term measures of working and communicating remotely stick, there will be significant disruptions across sectors.

In other news

The unprecedented break in European club football came at a time when tantalising battles were heading for endgames in the five big leagues. For many a club involved either in creating history or in tight races, this limbo leaves them on tenterhooks. On title races, top four finishes and relegation battles, our data story in Mint: read here.

Last year, we analysed India’s public transport challenges. The solution to this challenge has been largely centred around metro rail networks, which have had a mixed record across cities so far. Read the story for some staggering numbers in Mint here.

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