The virtuous cycle

Prime Minister Narendra Modi recently called for lifestyle changes to realise the goal of environment-friendly development and made a specific reference to cycling - Make Sunday, Cycle Day.

There is no disagreement that 'cycle days' can help us save precious fossil energy and reduce our environmental footprint, but most would agree that we as a country have done little to preserve and promote this environment-friendly mode of transport.

India is a nation that walks and cycles. In villages and towns, cycles are the most affordable mode of transport. Cycles have enabled children, especially girls, to access schools and continue secondary education. Therefore, one would expect high levels of cycle ownership.

This, however, is not the case; only 46 out of every 100 households in rural India own cycles, whereas almost every household in rural China owns a cycle. In a recent study, we found that rural households find it difficult to purchase cycles. The price of the cheapest bicycle is almost 15 per cent of the average annual per capita income in rural areas; in China it is as low as 2.5 per cent. The rural population needs microfinance, which is usually not available for purchasing cycles, as cycles are not recognised as income-generating assets under priority sector lending. So, where is the big fat opportunity?

Create the opportunity

Well, the opportunity lies in increasing the ability of rural population to purchase cycles, which, in turn, will increase the demand and give a big boost to the domestic cycle industry. The 2011 census shows that out of 167 million rural households, 90 million did not own a cycle. A demand of 90 million cycles could be a big boost for an industry which sells about 12 million cycles a year in the domestic market.

What can we do to generate this demand? The answer lies in making cycles below the price of ?5,000 cheaper by exempting taxes on them. Taxes constitute 12 per cent of the total price of a cycle and are passed on to the consumers. If taxes are waived , the demand can be expected to go up significantly as has been seen in many international cases.

The burden on the exchequer would be around ?260 crore (in 2012-13), shared between States and the Centre. In 2012-13, the Centre shelled out nearly ?92,000 crore as petroleum subsidy, the largest chunk of which went to the transport sector. If we can give subsidies to clean electric and hybrid vehicles, we could very well bring 'clean' cycles under the ambit of a similar scheme. We can also ensure the availability of finance for cycle purchase and make a case for the inclusion of cycles under priority sector lending as they contribute to income generation.

These measures clubbed with schemes like free cycles for school children could have a significant impact in terms of generating a demand for cycles. Cycle production in India has been growing at a moderate rate of 4 per cent. We produce nearly 15 million cycles, compared to about 83 million in China. While India's main market is within the country and exports constitute only 5-7 per cent of annual production, China exports nearly 69 per cent. China ensured that its cycle industry got enough domestic demand and this is what we need to do in India. It will be a win-win for all - industry, society and the environment.

Provide the infrastructure

We also need to give a big push to cycling in our cities. We found that people in urban India want to cycle but fear meeting with a road accident as there is no dedicated road infrastructure for cyclists. Nearly 7,000 cyclists die annually on Indian roads and there is no account of how many are injured. We need to make cycling safe. Why just Sunday? Why not cycle to office and/or school every day/ For this, we will have to provide cycling infrastructure in our cities without further delay.

We also need to develop citywide cycle-sharing projects. Again we need to look at China, which has become the global capital in terms of number of cycle-sharing schemes being run in its cities. While there have been some attempts in our cities, they haven't been adequate.

Lastly but most importantly, we need to change the perception that cycles are a poor man's mode of transport. Cycling should become a style statement, it should become a culture. The Prime Minister should expand the campaign on smart cities to 'Smart cities with smart people on smart cycles'!