MC Explains: Why congestion tax is unlikely to be implemented in Bengaluru anytime soon

Karnataka already levies one of the highest road taxes in the country in the range of 13%-20%.

For the past few days, social media has been abuzz with discussions about imposing a congestion tax in Bengaluru and levying charges on vehicles entering particular urban areas during peak hours. Karnataka already levies one of the highest road taxes in the country, in the range of 13-20 percent. Moneycontrol cuts through the noise and offers you the answers.

So, who proposed it?

In March 2023, the Karnataka government proposed a roadmap to becoming a $1 trillion economy by 2032. A committee, constituted by the Karnataka Planning Commission along with the Federation of Indian Chambers of Commerce & Industry (FICCI), and industry experts, recommended a set of initiatives to increase the state's GDP to $1 trillion. The draft report was released in March 2023, and the final report was out in September 2023.

Also read: Karnataka govt panel proposes three new Metro corridors in Bengaluru

What does the report say about congestion tax?

One of the proposals in the 374-page report titled '$1 Trillion Economy: Karnataka's Vision,'  is to implement a congestion charge in Bengaluru. It would apply to all non-exempt vehicles entering the city during busy periods.

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Which parts of Bengaluru would this target?

The levy is proposed to be levied in major arterial roads of the city. Currently, there are nine entry points to the inner city where the congestion charge could be levied: Bellari Road, Tumakuru Road, Magadi Road, Mysuru Road, Kanakapura Road, Bannerghatta Road, Hosur Road, Old Madras Road, and Old Airport Road.

How would the charge be implemented?

According to the report, 12 million vehicles travel into Bengaluru every day. Implementing a congestion charge could generate significant revenues for the city. Fastag has been successfully deployed in the city since 2021, and it is proposed to use the same for collecting the congestion tax.

When implemented in London, it was observed that traffic congestion within the operational area dropped by 30 percent within three years, with delays decreasing from 2.3 to 1.8 minutes per kilometre. Fastag is a simple-to-use, reloadable tag that enables automatic deduction of toll charges, allowing vehicles to pass through toll plazas without stopping for cash transactions, the report said.

How would it benefit the city?

The revenue from the congestion charge could be invested in public transport, leading to reduced congestion, travel time, and pollution, and lower costs for commuters and businesses, according to the report.

When will it be implemented?

Karnataka state government officials said that it is unlikely to be implemented anytime soon. "There are no plans to impose congestion pricing, at least not until the metro (rail) connects all tech corridors and other parts, which is expected by 2031. We haven't implemented the premium parking fees proposed in parking policy 2.0, which was prepared by the Directorate of Urban Land Transport (DULT) in 2020, so how can congestion pricing be implemented?" a senior government official asked.

Also, read: Bengaluru residents may get Metro access within 1-2 km from their home or place of work by 2032

What does FICCI have to say?

K Ullas Kamath, Chairman, FICCI (Karnataka), which prepared the report,  told Moneycontrol that congestion pricing is still in the discussion stage and nothing has been finalised. He said that FICCI has recommended congestion pricing along the lines of international cities, but recognises the opposition to it in India. "The government hasn't issued any order or notification in this regard yet," he added.

Have other cities implemented congestion pricing?

While cities like Singapore, London, and Stockholm have implemented congestion pricing, Mumbai and Delhi had earlier proposed similar taxes but not imposed the same due to opposition from private vehicle owners.

Why is there opposition to congestion pricing?

Those opposing congestion pricing argue that Karnataka already imposes one of the highest road taxes in the country. They have also expressed frustration over delays in completing the metro and suburban rail projects, delays in infrastructure work, inadequate buses and road maintenance, including pothole repairs. They said the development of alternative roads and an efficient public transport system should be prioritised over implementing such taxes.

Mobility experts support congestion pricing

A Comprehensive Mobility Plan for Bengaluru, prepared by the Karnataka government in 2020, advocated congestion pricing, a priced parking system, linking vehicle registration with emissions, and investing in cleaner technologies. Additionally, a report titled 'Brand Bengaluru — Agile & Sustainable Mobility for All,' drafted by the Indian Institute of Science (IISc) and the Ramaiah Institute of Management (RIM) recommended a parking policy, congestion pricing, and imposing high lifetime taxes on vehicles to discourage private vehicle usage.

Also, read: 5 reasons why Bengaluru's ORR faced unusual traffic congestion on September 27