I propose a people-friendly, incentive-based alternative to the Delhi government’s odd-even automobile scheme. It will impose less burden on the people while achieving the same objective, which is to reduce the number of vehicles on Delhi’s roads.

Let’s look at the basic concept underlying the scheme. Start with 30 days in a month. On taking out four free Sundays, we get 26 regulated driving days a month. The odd-even scheme allows you to drive only on 13 regulated days. Thus, the basic concept of the current scheme is to issue 13 ‘right-to-drive’ certificates each month to each car. No physical or electronic certificate is issued; instead, the certificate is linked to the last digit on the car’s licence plate.

The problem area



It is this link to the licence plate that creates problems for drivers. The main constraint is that there are 13 specified days when you just cannot drive your car, and each permitted day comes after skipping a day. This is easily a major disruption. For example, if you are involved in a three-day event — a crucial office meeting, an illness in the family, a social gathering — then there is a good chance that you may not be able to drive your car for two of those three days, and it is sure that you will not be able to drive for one of those three days. Not acceptable on a sustained basis.

The proposed solution is to break the link to the licence plate. Instead, the government would issue ‘right-to-drive’ certificates, and let people choose the days on which they want to drive. Specifically, the government would issue electronically, 13 right-to-drive certificates valid for one day each, every month, to each vehicle. Then, each driver is free to choose the 13 days on which to take out the vehicle based on need and preference. Under the current scheme, a car without a valid certificate attracts a hefty fine.

The certificates would be non-lapsable and transferable. Non-lapsable means that you can save your certificates for use in the future. Transferable means that you can transfer them to another car. In order to transfer, you would have to drive on fewer days, and give or sell your ‘surplus’ certificates to someone else, who wants to drive more frequently. This provides a financial incentive for those who can take out their vehicle on fewer days, to do so, while allowing those who need to take it out on more than 13 days, to do so. The government would set up a convenient electronic marketplace to facilitate these transfers and sales. It could charge a small fee for each transaction. None of these transfers would increase the number of cars on the road because the number of certificates will not change when a transfer takes place.

Room for improvement



This basic concept of issuing non-lapsable, transferable, right-to-drive certificates is open to refinement. First, there is no compelling reason to issue exactly 13 free certificates a month. The government could adopt a 10/3 formula — 10 free certificates, and an option to buy 3 more at a low price. This would provide the government with some revenue to operate the scheme. Second, instead of exempting select groups, the government could issue a larger number of monthly certificates to them. For example, for women drivers, who were exempted from the January scheme, the government could adopt a 15/5 formula — 15 free certificates with an option to buy 5 more at a low price. And why not apply the same 15/5 formula to private two-wheelers? Let everyone make some contribution to the solution.

Cars from outside Delhi could be easily accommodated under this scheme. Drivers in adjacent areas that are virtually part of Delhi, such as Gurgaon and Noida, could be offered some free and some low-cost certificates each month. Drivers from further away would have the option of buying some, say 3, low-cost certificates, when they enter Delhi.

Preliminary discussions make it clear that there would be no problem in setting up this entire issue-transfer-sale system to operate on smartphones as well as on older phones. In fact, instead of a single government-issued app, it may make sense to permit multiple, private, authorised firms/apps to be offered to drivers.

There is no doubt that a serious effort would have to be made to work out the technical and administrative details. But it would be worth it because there is little doubt that the proposed scheme would keep the desired number of cars off the road without imposing frustrating disruptions on Delhi’s drivers.

The writer is an adjunct professor of economics at American University, Washington, and a consultant with the World Bank