New Delhi: Targeted ‘congestion pricing’ in dense business districts, combined with demand-based parking management, can reduce traffic volume, raise speeds and cut emissions, as seen internationally, according to Economic Survey 2025-26. It has highlighted how such steps have helped authorities in Singapore and London address congestion.
Though efforts have been made since 2009 to propose charging private vehicles entering business districts in Delhi to discourage unnecessary trips during peak hours and encourage use of public transport, this is yet to become a reality. In 2016-17, agencies in Delhi, including the traffic police, were asked to study congestion charges as a traffic management tool, similar to London’s model, but this too never happened.
Congestion pricing is a transportation demand-management strategy in which drivers are charged a fee for using roads during peak periods of congestion.
“The core idea is to internalise the external costs of congestion, such as delays, pollution, and fuel waste, ensuring that those who use the most congested roads bear the actual cost of their travel. This, in turn, aims to reduce the number of private vehicles during peak congestion time on the specific congested corridors, improve travel speeds, and encourage public transport, carpooling, off-peak travel,” the survey said.
It noted that there were several varying estimates of loss in productivity across cities, resulting from traffic congestion. The survey quoted a report of Centre for Science and Environment on Delhi’s congestion troubles that said an unskilled worker stands to lose between ₹7,200 and 19,600 per year due to congestion. Similarly, skilled and highly skilled workers can lose as much as ₹8,300-₹23,800 and ₹9,000-₹25,900 a year, respectively.
According to the survey, a working paper by Institute for Social and Economic Change estimated the loss of productive hours due to late arrivals caused by traffic congestion to be around 7.1 lakh hours in 2018 for Bengaluru city, translating to a monetary cost of around ₹1,170 crore. Similarly, a 2018 report by UberBCG estimated that costs associated with traffic congestion in the four metros — Delhi, Mumbai, Bengaluru and Kolkata — were ₹220 crore per year.
