How much money does India lose due to traffic congestion?

What are the type traffic congestions and who gets stuck in it?

• Regular
  • central areas of big and small cities 
  • highways/toll
  • small roads or alterante roads that people take to avoid traffic
• Irregular
  • Accidents
  • Blockage of Roads due to construction or other activities
  • Crowd during Festivals casuing Traffic

First let me identify personas which are affected by the traffic congestions

• office commuters (morning and evening)
• school goers (morning and afternoon)
• shoppers/home makers (afternoon and weekends)
• tourists
• travelling business owners and employees 

Out of all the above personas losses to office goer, travelling business owners and school goers is significant

Population of India  ~ 1200 Million

Family size ~ 4 Members per family

Hence, There are 300 Million families

Assume equal distribution of people between 1 to 60 age

Hence, we get 20 Million in each age group

From age 6 to 22 people travel for education

17 * 20 Milllion * 0.25% = 85 Million travel

from age 22 to 60 people travel for work and shopping

40 * 20 Million * 3/8 work * 0.5% travel = 150 Million

40 * 20 Million * 1/8 shop * 0.5% travel = 50 Million

We get Total of 

285 ~ 300 Million

Roughly 20% dont get stuck in traffic - short distance and time of travel / night shift etc

Hence we get rest 80% people who get stuck in traffic on regular basis 

Total 240 Million

We will bucket these people by buckets based on minutes they get stuck in traffic

10  Minutes = 40% = 96 = 960 Milllion Minutes

20  Minutes = 30% = 72 = 1440 Milllion Minutes

30  Minutes = 15% = 36 = 1080 Milllion Minutes

60  Minutes = 10% = 24 = 1440 Milllion Minutes

120 Minutes = 5%  = 12 = 1440 Milllion Minutes

Total  6360 Million minutes = 106 Million hrs per Day

 

Now we'll Calculate Loss to Indian Economy

Fuel 5% hrs =   106 * 10% = 5 Million hrs

Hourly fuel needed = 60 Rupees

 = 300 Million

 = .3 Billion Rupees

 

vehicle losses

240 mn * 0.05% = 0.12 mn * 1000 

= 0.12 Billion Rupees

 

Total Real Loss = 0.3 + 0.12 = .44 Billion Rupees

 

Total Opportunity Loss

106 mn * (20% people may work) = 20 Million hrs * min wage 50 rs =  1 Billion Rupees

Public Property loss

= electicity + signals + traffic cops = 1 Billion Rupees Daily

Total Daily Loss

0.44 + 1 + 1 = 2.44 Billion Rupees

Annual Loss 

 2.44 * 365 = 890 Billion Rupees = $ 12 Billion 

There are many approaches to solve. I will go from what is known and extrapolate.

Known population and traffic of Mumbai. 20m population. 2000 km of roads. roughtly 1500 vehicles/km.. based on avg size.

Assume 3 people per vehicle. that is 3 x 1500 x 2000 = 9 mil people on road.

Assume this is 2 peak hours per day => 18m people hours  on road per day.

Assume Rs 50 per hour then Rs 900m per day. or 200 days... Rs 180b/year.

Assume 10 equivalent size of Mumbai for Rest of India.. then Rs 1800 b/year = $25b per year.

 

Now need to add Child Care, Elder Care, Health issues care cost, accidents, psychological issues, productivity loss: equal to at least $25b.

Cost of incremental fuel.. assume Rs 60/liter. Mumbai case 2000km x 1500 vehicles/km x 2 hours = 6m km/ 20km/liter x rs 60 = Rs 18m/day in fuel. or Rs 18x200 days x 10 cities equal for India = Rs 36b round to $1b.

Cost of air pollution :   $2b estimate.

Total cost $25b time cost + $25b health and other.   $1b fuel and $2b air pollution  ~ $50b/year.

The population of India -1.3 billion

Urban population - 30% -> contribution to overall India -> 50% GDP -> so adujstment 40%

Traveling during peak times when there is traffic congestion - 30% - Net-> 30% of 40% -  12%

Productivity loss of the population - 20% -> Net -> 20%*12% -> 2.4%

GDP of India ->  2600 Billiomn

Loss - 2.4% of 2600 Billion -> 62 Billion

As I am using GDP which automatically averages out contribution, I am not diving into personas and such

Not sure how this is a product question but I'd like to give my macroeconomic brain some work, so here's what I think:

What does traffic congestion cost:

1. Delayed commutes (From the analogy of Time is Money, delayed commutes are lost manhours)
2. Traffic congestion creates additional consumption of fuel.
3. Traffic congestion creates more pollution, so more maintenance for the country.

Let's consider point 1 for now, and move ahead:

1. 36% of the Indian population have vehicles - 0.36*1.2 = 432 million people are prone to be a traffic jam.

Let's say 4 hours lost/week  =  208 hours lost/year. Assuming profits generated by a single person in 1 hour is 50rupees (Avg salary of 4lakhs)

= 432,000,000 * 208 * 50 = 4492 billion rupees or 64 billion USD.  

The same analysis can be done for the other 2 hypotheses.

 

Thoughts?