While we're on the topic of traffic police...

This hits me most whenever I pass these public service hoardings on the road that talk about saving lives by wearing helmets. I remember the time a couple of years ago when newspapers announced that the helmet law would get implemented in Bangalore. And immediately, the question I asked myself was "Why?" So suddenly? Out of the blue? And then it struck me.

As any economist would tell you, there is (there has to be) an obvious correlation between safety-conscious traffic police and helmet manufacturers. If for nothing but the fact that these helmet manufacturing companies exist - What's their (helmet manufacturing companies') future growth plan? To depend on disposable income to rise to an extent where every biker will go out of his way and spend Rs.500 on a precautionary protection? In a country where the same amount will get this price-conscious biker enough petrol to go all the way to Goa? (680 km from Bangalore to Goa - @ a conservative 69 kmpl)

They (traffic police) get the law passed by quoting road kill statistics that would have most probably been caused due to drunken driving and other unavoidable circumstances. It might help to find out how many deaths would have been avoidable if the biker would have worn a helmet but there's hardly a chance anyone even has that data. Maybe the victims weren't even riding two-wheelers... for all you know, they might have been pilgrims going in a bus. Or pedestrians (especially those young rural womenfolk who act like they've been taught to sprint across the road giggling all the way as soon as they spot you coming). But a death is a death is a death - all the better if the dying are innocent and the circumstances oh-so identifiable and avoidable. Hence the "road kill" figure gets quoted - and the law gets passed.

Anyway, the deadline for helmet usage gets set - and obviously, the entire machinery goes into action. Helmet sales shoot up as do the prices. Helmet manufacturers and helmet shops make money - one head at a time. Overnight, enterprising young men set up stalls on highways selling helmets they've brought back from Tamil Nadu in their cars for Rs.250 apiece. Surely a nice slice of this revenue pie does make its way from the helmet manufacturers to some people somewhere in the Traffic Police department.

People buy helmets - which means they have to buy helmet locks. Helmets perched atop mirrors disappear from a once trusting city where people wouldn't think twice before walking away from their unlocked protective headgear. And in true self-fulfilling prophecy Indian style, those who leave their helmets - start coming back to find them missing. And helmet sales continue...

And the real money is still to come... enforcing this law is actually creating an additional revenue stream for the traffic cops on the road - a chance to catch bikers who don't have helmets and make money off of them.

You might call me a cynic but I see what to me seems like the obvious reality...

...however, I wonder, how many people out there see nothing except the caring nature of the lawmakers.

Its possible...

...its possible, that the corruption that permeades into so many aspects of government, has caused the following scenario:

A brief background before I start: As you are aware, petrol prices differ across the country due to different amounts of taxes levied by the state governments. Bangalore, where I live currently, has petrol at one of the highest (I think!) prices in India, well over Rs.50 per litre.

Now, for the foundation: Those of you (who don't live in Bangalore) but who have driven/ridden by themselves for even a few days in Bangalore in the recent past, would have noticed that Bangalore has an unusually high ratio of one-way streets. There are long stretches that need a break in the road, and many times you will find yourself stuck behind a mile of traffic slowly inching towards a seemingly always red light, trying to figure out how long before you get to enter that lane on the opposite side of the road. For those of you who do live in Bangalore, you know what I'm talking about.

Now, here's the hypothesis: Firstly, its possible that oil corporations play a role in the petrol prices across states. Cities like Bombay and Bangalore have enough personal and corporate wealth respectively to be able to support gas-guzzling vehicles as much as required. Hence, it makes sense to have higher prices where you know there is very low price elasticity.

Secondly, its also possible that, in a city like Bangalore, oil corporations have influenced those in power to add one-ways to the ever burgeoning traffic on the roads. Not only does it cause commuters to travel for longer distances (and hence use more petrol) but another fallout is traffic jams where most people inevitably end up burning more petrol.

Now, oil is big money all over the world, and any corporation will have sales targets... who's to say which practices are or are not being adopted at local levels to achieve the ends?

Now, I don't work for a leading oil corporation, and I doubt that most people who work will know or admit to this if its happening, but what's to stop a few head honchos from influencing the highest echelons of a traffic control organization to add more one-ways, that directly increase average travelling distances and time for commuters, and reward the accessories once they see a positive correlation in increased sales revenues.

Now, some of you might think this to be a bit far fetched - you might feel that corporations wouldn't want to get involved in activity of this sort, because its too risky for their reputations.

So let me allow you to imagine the same 'conspiracy' theory - but this time, you replace the oil corporations by the state government department that gets this tax on petrol.

Now does that sound more plausible?

Where is all the money going? - Airport/Flight Tax

The aviation industry in India has taken off only in the last 3-odd years. I found myself trying to figure out how much money we were paying as tax and found myself arriving at the following amount through approximations and estimations.

I have come across many peers who, when asked to try and guesstimate any such quantity, give up and not even try. Hence, I have intentionally stopped myself from finding out exact facts for this exercise, and hope to prove through logic and a willingness to do mental math, that you don't really need to have all the facts to make an estimation.

I start at trying to figure out how many airlines are operating in India. I remember coming across some discussion or list somewhere which had surprised me that aviation in India actually had more players than the already skyrocketing telecom industry. If you were to attempt a listing of players of either industry, you should get at least 7-8 names. And then there will always be those names you can't recollect or haven't heard of. Let's start at a conservative count of 12 players in aviation.

Now, assuming these players are serious about aviation (why else would they participate in the industry, unless of course some of them were whims of 21st century Naseeruddin Shah wannabes trying to spend Rs.30 crores in 30 days a la Malamal - not that Rs.30 crores would get them too far in aviation today). Anyway, its safe to assume that any player 'serious' about aviation would start by looking at at least a dozen airplanes. If the minimum is a dozen, then for the entire industry, it should be safe to assume an average of 20 airplanes.

Each plane can probably make 4 trips in a day, with a trip averaging 2 hours of flying time, plus 2 hours of turnaround time per trip, which makes it 16 hours - let's leave the remaining 8 hours as grounded rest time for the aircraft, where routine maintenance and checkups can happen as much as needed.

Now, an average plane flying in India today has n number of rows, and since I'm not sure exactly how many rows, I will stop at a conservative 30 rows. With 6 seats in each row. And of course, don't forget the business class. However, for the sake of mathematical ease (read ignorace of how expensive business class tickets are), let's choose to ignore the revenue (read taxes) that business class generates. From what I have subconsciously understood over the course of my life, I'm going to assume that a dozen business class tickets should cost as much as 30 economy tickets, which is 16.66% of capacity (30 / 180). Hence, while we are ignoring business class, let's compensate by assuming a 100% revenue from capacity on economy (the average capacity utilization for economy being 80-odd % + a contribution of 16.66% of economy fares coming from business class). Hence, we're assuming 100% capacity utilization of economy class on each of the four daily flights per airplane.

After 8 hours of unwind time, even if you were to take an additional 3 days downtime per plane per month, and you get 365 minus 36 = 329 flying days.

Now for the final leg of this mathematical journey -
No of passengers flying with Indian aviation players per year =
12 players * 20 aircraft * 329 flying days * 4 flights per day * 180 passengers per flight = 56851200 = 56.8512 mn = 5.68512 crores
5.68512 crores * Rs.700 tax per flight taken = Rs.3979.584 crores ~ Rs.4000 crores per year

A few months ago, this Rs.700 tax was increased to Rs.1500+, which starts amounting to just over Rs.8500 crores per annum.

So I'm back to my question...

Where is all the money going?




P.S. Readers are invited to speculate with their own set of calculations, or provide actual tax revenue generated if they are aware of the same.

OCDs amongst other things...

Call it an OCD for measuring things or call them digressions of my idle mind but more often than not, I find myself trying to find better ways to measure things around me...

I'm the sort of guy who, if he hears a mathematical calculation being said aloud anywhere (...so you take 14 and multiply it by 57 and subtract the answer from the highest possible number that can be formed by rearranging the digits of the answer), will have to stop and follow each step and come up with the answer before moving on to other things.

The sort of guy who can't let an unfinished calculation stay unfinished... the sort of guy who has to read everything he looks at, who can't help but end up reading everything he lays his eyes on...

However, don't mistake my compulsion of reading with having a great memory... my memory sucks, although over the past few months I think my memory's coming back to me... it helps to hang out with friends who were even more self-absorbed during the good ol' times (or are right now) to remember details...

Anyway, mathematical calculations and reading are a couple of my compulsions...

More to follow in subsequent posts...




P.S. 14 * 57 = 14 * 60 - 14 * 3 = 840 - 42 = 798. 987 - 798 = 189.