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Table of Content
Urban traffic congestion is one of the most pressing challenges facing India’s cities. The Economic Survey 2025-26, released on January 29, highlights congestion pricing and parking reforms as essential tools to reduce traffic bottlenecks, improve travel speeds, and prioritise sustainable mobility over private vehicle use.
The Survey draws attention to global best practices, demonstrating how demand-based pricing mechanisms can significantly reduce congestion while encouraging public transport and non-motorised mobility.
Global Lessons: Singapore and London Lead the Way
Cities like Singapore and London have shown how targeted measures can improve urban mobility. Singapore’s Electronic Road Pricing (ERP) system dynamically charges vehicles during peak periods. Decades of data demonstrate that ERP effectively reduces traffic volumes, raises travel speeds, and lowers emissions.
Similarly, London’s Congestion Charge employs a cordon-based licensing system, requiring vehicles to pay daily fees to enter or move within central city zones. Both examples highlight the effectiveness of economic incentives in managing road space and curbing vehicle dependency.
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Indian Initiatives: Parking and Demand Management
The Economic Survey also recognises domestic efforts, such as the Chennai Metropolitan Area Parking Policy (2025), which treats parking as valuable urban real estate. By discouraging private vehicle use and promoting walking, cycling, and public transport, such policies complement transit infrastructure investments and offer a scalable model for other cities.
Economic Costs of Traffic Congestion
Traffic congestion has a direct impact on productivity and economic efficiency. According to estimates highlighted in the Economic Survey, unskilled workers in Delhi may lose ₹7,200–₹19,600 per year due to congestion, while highly skilled workers could lose up to ₹25,900 annually.
A study by the Institute for Social and Economic Change (ISEC) found that Bengaluru alone lost around 7.07 lakh productive hours in 2018 due to late arrivals, translating to an economic cost of approximately ₹11.7 billion. Additionally, the Uber–BCG report estimated congestion costs in Delhi, Mumbai, Bengaluru, and Kolkata at $22 billion annually.
Commuter Time Loss: A Critical Metric
The Economic Survey 2025-26 highlights data from the TomTom Traffic Index 2024, showing commuters in Bengaluru, Mumbai, and New Delhi lose 117, 103, and 76 hours per year respectively due to rush-hour traffic. These figures underline the urgent need for policy interventions that prioritise mobility efficiency.
Prioritising People Over Vehicles
The Survey emphasises a fundamental urban design principle: cities must be built for people, not cars. Roads are often misused as storage for low-occupancy vehicles, reducing space for actual movement and leading to chronic congestion.
“This diagnosis leads to the guiding principle: design cities to prioritise the movement of people, not vehicles,” the Economic Survey states, advocating a shift in urban planning mindset.
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Policy Recommendations
To tackle congestion effectively, the Economic Survey recommends:
- Scaling up city bus fleets – Ensuring high-capacity transport options reduce reliance on private vehicles.
- Accelerating e-bus adoption – Promoting sustainable, low-emission mobility solutions.
- Mainstreaming last-mile and shared mobility – Encouraging ride-sharing, cycle sharing, and feeder services to improve accessibility.
- Implementing congestion pricing – Dynamic, demand-based charges in high-density areas to rationalise vehicle use.
- Managing parking strategically – Treat parking as valuable urban real estate, using pricing and restrictions to influence demand.
Conclusion
The Economic Survey 2025-26 makes it clear that decongesting India’s cities requires a holistic approach combining congestion pricing, parking reforms, and public transport investment. By prioritising people over vehicles, urban centres can improve mobility, reduce emissions, and increase economic productivity.
With strategic implementation of these measures, Indian cities can transition toward sustainable, liveable, and efficient urban ecosystems, setting a global example in mobility management.
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Ans 1. Congestion pricing is a demand-based system that charges vehicles for using roads during peak hours or in high-traffic zones. It helps reduce congestion, encourages public transport use, and improves travel speeds.
Ans 2. Singapore and London are leading examples. Singapore uses Electronic Road Pricing (ERP) to dynamically charge vehicles, while London applies a daily congestion fee for vehicles entering central zones.
Ans 3. Indian cities like Chennai have adopted parking policies treating parking as valuable urban real estate. These policies discourage private vehicle use, promote walking, cycling, and public transport, and complement transit investments.
Ans 4. Traffic congestion reduces productivity and efficiency. For example, unskilled workers in Delhi can lose ₹7,200–₹19,600 per year, while skilled workers may lose up to ₹25,900. Congestion in Bengaluru cost about ₹11.7 billion in lost productive hours in 2018.
Ans 5. According to the TomTom Traffic Index 2024, commuters lose an average of 117 hours in Bengaluru, 103 hours in Mumbai, and 76 hours in New Delhi per year due to rush-hour traffic.
Ans 6. Prioritising people over cars ensures better movement, reduces low-occupancy vehicle storage on roads, and alleviates chronic congestion, creating more liveable and efficient urban spaces.
Ans 7. By reducing private vehicle use, lowering emissions, and promoting public transport, these measures contribute to cleaner, greener, and more energy-efficient cities.
Ans 8. Effective congestion management can enhance mobility, increase economic productivity, reduce pollution, and create sustainable and liveable urban environments.
Ans 9. Delhi, Mumbai, Bengaluru, and Kolkata face the highest congestion levels, with commuters losing significant hours annually and cities incurring billions in economic costs.