A Preliminary Assessment of the Rationale and Scope of Implementing Congestion Pricing in Delhi NCR

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 a 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 in to private decision making, thereby eliminating the externality. Given there cent interest of the Delhi Traffic Department in this policy, it is essential to examine its potential welfare impacts. This study at tempts 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. There cent 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 inframing an effective policy.