Bicycle: The Unnoticed Potential

Increased government attention in recent times has evolved for stimulating growth in the rural sector in India. Transport, if analyzed for the cost-benefit analysis for rural poverty alleviation, has given one of the best returns in this regard. Road Investments in India were a staggering 3-10 times more effective than almost all other investments and subsidies in rural economy in the decade of 1990s.

Road investments are another name for investment in transport. Another integral part of increased mobility through transport in the rural areas is the bicycle ownership. What a road does at a macro level, the bicycle supports at the micro level. in that context explores the idea of using bicycle as one the best means to eradicate rural poverty in India. Analyzing researches and experiments done on the subject, it figures out the immense unnoticed potential bicycle has for rural growth and poverty reduction in India, since:
  • Per capita bicycle ownership in India is dismally low (1/7) compared to other developing nations like China and Brazil .
  • Price of bicycle in India , in relation with the per capita income, is 2 times compared to other developing nations like China and Brazil .
  • Experiments done in Africa (Uganda and Tanzania) and Srilanka on hundreds of households have shown that a bicycle can increase the income of a poor family by as much as 35%.

  • Transport has shown to have the second biggest potential to eradicate rural poverty in India in last 4 decades. Increasing bicycle density to a normal level would induce a lot of rural growth.
  • The main reason that is apparent for a low bicycle density in India is the higher relative purchase price for a family compared to other nations. (Please click the figure below to see a better version).

  • If the purchase price of the bicycle is reduced by 50% by providing subsidy, it will cause a huge spurt in bicycle ownership in India and subsequent substantial productivity increase.
  • The subsidy thus provided will be straightly targeted to the lowest strata, leak proof, and having long-lasting effects for years. Over a longer term, it would increase the productivity of about 200 million poor people.
  • Such a subsidy will cost a mere 1-2% of total Central Government subsidy outlay.
  • It is ironical that to support transport, huge subsidy is given on petrol, which is consumed majorly by middle class households, but not on bicycle, which is used majorly by poor households.
  • Even if rural roads are there, a dismal bicycle density means a bottleneck for the rural transport.
There is a hidden boon in bicycle for rural India .

1 comment:

  1. I have for years suspected as much. Sadly, here in Kenya the bicycles on the market are of very poor quality and design. Africa needs better bikes than the 1940s designs we are supplied from china and India. A one speed mountain bike with paniers would actually be perfect.
    cheers, James Christian
    Walking Safaris in Kenya