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New York City introduced congestion pricing in January 2025, becoming the first city in the United States to implement such a plan.  

What is congestion pricing?

Congestion pricing is a system where drivers entering a city’s central business area are charged a fee to reduce traffic congestion.

In January 2025, New York City became the first U.S. city to implement it to decongest the highly trafficked Manhattan district. Drivers will pay $9 during peak hours to enter the area.  

Several cities globally have adopted congestion pricing. Singapore started in 1975, followed by London (2003), Stockholm (2006), and Milan (2008). Each city uses electronic toll systems, but the fees vary.

What are the benefits of congestion pricing?

• Cities earn significant revenue, which can be reinvested in improving transportation infrastructure. NYC aims to raise $15 billion for subway and railway upgrades.
• Cities like London have reported significant improvements in air quality, with nitrogen oxide levels halving. Milan's congestion charge has reduced carbon pollution by about 30%.
• Reduced traffic leads to quicker commutes, less noise, and cleaner air. Stockholm saw a 25% reduction in traffic levels, surpassing its target, and improved bus punctuality.

Could India benefit from congestion pricing?

Congestion pricing has the potential to benefit Indian cities. Congestion pricing in cities like Mumbai could ensure faster commutes for those who can afford to pay while providing better alternatives such as buses and trains for others.

India faces challenges like the high number of private vehicles in cities, making congestion pricing difficult to implement without widespread public support. In Mumbai, for example, there are 2.7 million private vehicles for 12.4 million people.

To make the system effective, Indian cities would need better communication to clarify the benefits and improve public transportation alternatives, such as buses. Without this, people may resist the policy, viewing it as a punishment rather than a solution.

Congestion pricing may be feasible in some Indian cities, but it depends on the city's traffic patterns and other factors: 

• Congestion pricing is most effective in urban areas where peak-hour congestion is highly responsive to traffic volume. For example, a study in Bangalore found that peak-hour pricing would only marginally improve travel times. However, experts say that implementing a congestion tax in Bengaluru could help reduce traffic congestion and improve air quality. 
• Improving other inefficiencies in road use, such as compliance with traffic rules, could make congestion pricing more attractive. 
• Congestion pricing can help tackle environmental pollution, which is a growing concern in cities like Mumbai. 

Way Forward

Congestion pricing is a travel-demand management measure that charges private vehicles to access high-demand areas. The goal is to discourage private vehicle use and promote public transportation. Congestion pricing has been successfully implemented in cities like London, Singapore, and Stockholm. 

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Source: 

Indian Express