ExplainSpeaking | The economics of road safety: What India can learn from the rest of the world

The death of Cyrus Mistry, former Chairman of the Tata Group, in a road accident has brought the issue of road and care safety into sharp focus. Initial reports suggest that Mistry, who was seated in the back, was not wearing a seat belt and reportedly died on the spot immediately after the accident. The high-profile death comes close on the heels of the latest National Crime Records Bureau (NCRB) report, released last week, which showed that in 2021, 1.55 lakh people died in accidents on Indian roads, up from 1.33 lakh in 2020. In other words, every day 425 people lose their lives on Indian roads. “We lose about 150,000 people due to road accidents and about 60% of those deaths are in the 18-24 age group, which is a big loss. If we leave aside other things, just the loss to India’s GDP due to these deaths would be in the range of 3 percentage points,” said Union Road Transport Minister Nitin Gadkari in a recent interview. As Chart 1 shows, India has a dismal record on this count.

Chart 1: Road deaths in India from 1900 to 2016 as compared to other countries

What does the law mandate about seat belts?

According to the Motor Vehicles Act 138(3), fastening seat belts is compulsory for passengers sitting in the front as well as the back seats. A video issued in the public interest by the Union Ministry of Road Transport and Highways, states that wearing a seat belt reduces the impact of an accident by 80 per cent. However, on YouTube, this video published in April 2017, had just 117 views as of September 5.

In the real world, too, compliance of seat belts in the rear seat is almost non-existent in India. For most people, wearing seat belts is mandatory only for the front seat. It is not too uncommon to find people preferring to sit in the back just to avoid the “inconvenience” of wearing a seat belt while sitting in the front seats.

In February, the government made it mandatory for automakers to provide three-point seat belts for all front-facing passengers in a car, including the middle seat in the rear row of a car.

What is the reason for the poor road safety record in India?

There are no clear-cut answers. But there are three broad schools of thought.

1. Indians simply don’t care about their safety

The most commonplace response is to blame the consumers and argue that Indians do not care for safety. For example, in the current example, what would have caused Mistry to not wear a seat belt? More generally, it can be argued that Indians base their choice on several other factors such as initial price, mileage, creature comforts etc instead of safety.

On the face of it, this argument is intuitively appealing especially when one talks about first-time buyers and those graduating from two-wheelers. What explains, for instance, the reluctance that Indians often exhibit in wearing helmets, especially when they are travelling on a scooter with their families? When the pillion riders do wear a helmet, it is often one of the flimsy ones incapable of providing any protection; it is worn essentially to avoid a challan. Similarly, car users resist wearing seat belts. Almost no one wears seat belts while sitting in the backseat — often viewing wearing seat belts as a punishment for those sitting in the front.

This behaviour can’t be justified merely based on price. A helmet may not cost as much. But even if it does, what explains not using seat belts which are already there and paid for? One can often find taxi drivers keeping the seat belts permanently plugged in — without actually wearing them — so that the car doesn’t beep continuously; they only slide inside the seat belt when they see a traffic cop.

But there are problems with this view.

For one, if one believes this then there is no solution. If one believes that Indians are irrational and do not care for their safety, then there is no scope for any policy intervention or a technological upgrade or an awareness campaign. Moreover, it is hard to argue that the same Indians start bothering about personal safety as they move up the income ladder and attempt to buy a costlier car or SUV.

Lastly, data from the rest of the world shows that every economy, even the high-income ones — the so-called developed countries — also went through this phase. For instance, until the 1960s, the US, too, believed that safety doesn’t sell. US automakers resisted the idea of increasing safety while European cars were known for their enhanced safety credentials.

2. Indians are too poor to afford road safety equipment

Recently The Indian Express reported that “The Centre’s plan to mandate six airbags across all cars from October 1 is likely to be deferred amid discussions within the government on its fallout in the small-car market and a pushback from the industry.” Earlier this year, the Ministry of Road Transport and Highways had announced the minimum six-airbag rule for vehicles that can carry up to eight passengers. Leading the opposition to this mandate is Maruti Suzuki India, which makes nearly one in every two cars sold in India and is the biggest player in the small-car segment. According to the carmaker, the government’s demand for additional airbags will push up prices of entry-level cars and likely result in further weakening the demand for cars in the price-sensitive segment that is already facing a sales slump over the last four years. India’s second-largest carmaker, Hyundai Motor, has already pulled the plug on its new Santro in the wake of declining sales and the new safety norms because “the changes required to reconfigure the hatchback for six airbags as an unviable proposition.

In other words, it can be argued that road safety is a function of income growth in a country.

Chart 2 maps the long-run trends in road traffic deaths in high-income countries (HICs). It shows that traffic deaths were rising in all countries before the 1960s but began to decline shortly afterwards and have continued to decline for the five decades since. The decline in traffic deaths occurred even though vehicle ownership – and, hence, exposure to the traffic environment – has steadily increased over the last century. In contrast, traffic injuries in most low- and middle-income countries (LMICs) are continuing to rise or are stable at a high level.

Chart 2 maps the long-run trends in road traffic deaths in high-income countries (HICs)

The question is: How did the richer countries do it?

The answer: Traffic death rates are a function of income growth. In other words, there is a general relationship between income growth and road traffic injury such that when countries are poor they experience rising injuries with increasing income; and when countries are rich they experience declines (in traffic injury) with increasing income.

In one of the more prominent papers, titled “Traffic fatalities and economic growth (2003), Elizabeth Kopits (University of Maryland) and Maureen Kropper (World Bank) explain the underlying logic of this hypothesis: When countries are poor, growth in income is closely tied to increase in motorization, which leads to higher exposure to road traffic injuries. At this stage, it is assumed that countries are too poor to invest in harm reduction. However, after a certain level of economic development has been achieved, countries begin to invest in road safety programs and reduce their road traffic injury rates.

According to Kopits and Kropper, the turning point came at a particular level of per capita income. “The income level at which per capita traffic fatalities peaks is approximately $8,600 in 1985 international dollars,” they calculated. As such, “…if developing countries follow historic trends, it will take many years for them to achieve the motor vehicle fatality rates of high-income countries. Provided that present policies continue into the future, the traffic fatality rate of India, for example, will not begin to decline until 2042”.

3. Absence of systemic solutions and weak enforcement of laws is the real culprit

As compelling as the income argument sounds, there are problems with this hypothesis as well. For one, while it charts out the path for the high-income countries, it doesn’t necessarily follow that relatively poorer countries must also wait for the increase in income levels.

Moreover, researchers such as Kavi Bhalla (University of Chicago), Dinesh Mohan (IIT-Delhi) and Brian O’Neill (Insurance Institute for Highway Safety, US) found a glaring loophole in this analysis. That, in turn, led them to suggest a third way to look at this issue.

In their 2019 paper, titled “What can we learn from the historic road safety performance of high-income countries?” Bhalla et al looked at the same data as shown in Chart 2 (above) but spotted a significant insight.

They found that instead of a particular level of per capita income, there was something about that period of time — in the 1960s and early 1970s — that provided a paradigm shift for all high-income countries.

They arrived at this conclusion by comparing road traffic death rates in high-income countries as a function of (a) economic growth, and (b) time (see Chart 3). What they found was the turnaround in different rich countries happened at very different levels of per capita incomes but at the same time. In Chart 3 (b), the US and the UK start witnessing a decline but they are at very different levels of per capita incomes.

“The results suggest that the reversal in trend in road deaths in HICs (high-income countries) during the 1960s is not because the countries reached a certain income threshold. In fact, in 1965 the richest of these countries had a per capita income that was more than double that of the poorest. Instead, our results suggest that the late 1960s were likely a special moment in history when countries at different income levels were able to reduce their traffic death toll,” they state.

Chart 3: Comparing road traffic death rates in high-income countries as a function of (a) economic growth, and (b) time

What were these special changes?

“Briefly, the 1960s were also a period of paradigmatic change in thinking about road safety in many HICs. In the US, for instance, this period was one in which the problem (and hence the potential solutions) shifted from being driver-oriented to a more balanced approach, which later came to be known as the ‘Safe System’ approach. It included interventions that focused on vehicles, road infrastructure, and post-crash care, in a broad view of the environment in which crashes happen. The movement was led by a group of engineers, physicians, lawyers, and politicians,” they state.

For instance, one little-known lawyer, Ralph Nader, wrote a book titled “Unsafe at Any Speed: The Designed-In Dangers of the American Automobile” in 1965 and it is widely seen as a turning point for car safety in the US.

“Acting at a time of increasing state power and the rising consumer movement, they successfully lobbied the US Congress to pass two key pieces of legislation in 1966 – the National Traffic and Motor Vehicle Safety Act and the Highway Safety Act, which for the first time authorized the US government to play a key role in vehicle and highway safety. This in turn led to the establishment of the National Highway Safety Bureau (later National Highway Traffic Safety Agency (NHTSA)). NHTSA together with the Federal Highway Administration (FHWA) had mandates to regulate safety standards for vehicles and highways, and these two agencies played an important role in pushing the development, implementation and enforcement of many safety interventions, such as airbags, seat belts, energy-absorbing steering wheels, breakaway sign and utility poles on roadways, deformable median barriers, and guard rails among many others,” explain the authors.

What is the upshot?

Blaming Indians for being irrational about their safety is a dead end from a policy perspective. Further, while it is true that there is a broad correlation between income levels and road safety, the more salient and actionable insight is that low- and middle-income countries such as India do not have to wait until their per capita income level improves drastically before achieving improvements in road safety. The solution lies not in ad hoc governmental interventions and flip-flops but in creating an institutional framework which has a nationwide mandate and the financial muscle to bring about systemic changes. For instance, effective enforcement of the rear seat belt norm could have avoided Mistry’s death.

How can India improve road safety? Share your views and queries at udit.misra@expressindia.com

Stay safe,

Udit