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.

BicyclePotential.org 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 .

Opinion

Below are some comments on the concept by some eminent economists/ public policy thinkers.


"...I read your email note on importance of bicycle for rural productivity and growth. I am in agreement with your thrust. I congratulate you on this line of thinking."

-Dr. S. C. Jha, Member, Economic Advisory Council to the Prime Minister.


"Nice idea..... I'll read the whole report."

-Mr. S. M. Krishna, Foriegn Minister, India and Former Chief Minister, Karnataka.


"Many thanks for your email and the report on the need for increase in bicycle density in rural India to alleviate poverty. I shall definitely tell this to my colleagues and discuss with them your report."

- Dr. Pinaki Chakraborty, Senior Fellow, National Institute of Public Finance and Policy (NIPFP)


"...As an idea to combat rural poverty this could be one of the weapons.....the hinterland still stays same, without road, without electricity, without communication. Your pet bicycle will play wonders there."

-Dr. P. R. Jena, Senior Economist, National Institute of Public Finance and Policy (NIPFP)

Quantitative Experiments

Effect of Bicycle on Poverty Alleviation

Quantitative Field Study-1: Uganda

Organization: Institute for Transportation & Development Policy, Europe

• Cost-benefit analysis of bicycle ownership
• 300 poor households from different regions of Uganda were given subsidized bicycles and a one-time guidance of how to utilize the time saved in doing any allied productive work

Results:

• All households either enlarged the area of land used for agricultural purposes or intensified the level of cultivation
• Roughly half of all households began or intensified non-agricultural activities during the survey period, and in that way diversified the composition of their household income.
• Saving of almost 2 hours per day of transport time per household
• Substantially more frequent visits to market and medical facilities
• 35% higher income

Full Report


Quantitative Field Study-2: Tanzania

Organization: International Labour Office

• The understanding that "Roads Are Not Enough" was the reason why Integrated Rural Transport Project in Makete District, Tanzania was conducted.
• About 100 households surveyed for impact of bicycle ownership

Results:

• Bicycle has very strong impact on the market production: It enables the farmers to cultivate bigger fields and use more fertilizer.
• Bicycle households marketed two fifth more than comparable non-NMT-households.
• Total monetary benefits of a bicycle 55% of the household’s income
• The main restriction for the purchase of a bicycle is the relative high procurement cost.
• 80-90 % of the households desiring an NMT stated that they could not afford the price
  

Full Report


Quantitative Field Study-3: Srilanka

Organization: World Bicycle Relief, USA.

• After Tsunami, 24,000 free bicycles distributed
• Surveyed 221 bicycle owners for impact made

Results:

• More than two years after the tsunami, 88% of respondents still rely on the bicycle as part of their livelihood
• Bicycles save between 10 and 20 percent of a household’s annual income over other transportation alternatives, and in the poorest households as much as 30 percent – income that contributes directly to livelihood security
• Bicycle distribution has effectively mobilized and empowered women, with 82 percent of women recipients reporting that they use the bicycle for income-generating activities
• Bicycle saved, in alternative transportation costs, 18% of a recipient’s $71 average monthly income.
• If saved time was spent on productive endeavors, then $0.52/day additional income could be produced – a more than 17% increase.
• While this survey did not specifically calculate the cost savings of a bike recipient’s ability to reach regional markets, parallel surveys show further significant cost savings.
  

Full Report

Impact of Bicycles for India

"We certainly like the idea and understand the importance of transport. The main focus of the discussion came to the realistic practice of the idea that if some one finds something very important for oneself then tries to have that. So the question comes up that if the bicycle is one important thing for poor people in rural areas then why aren’t people buying it. The reasons may be money and poverty or people don’t understand importance of having bicycle.

So the major question comes up that if given money would people like to buy it? For an example there are many SHGs which are providing loans to the poor families and the members normally take loans and buy buffalos but not bicycle etc.

So, are there some studies that show that when the poor people have access to resources they prefer to buy bicycles? "

- Query by one of India's leading research and educational NGO.

Reply:

Well, both of the reasons, that the poor don’t have the money and they don’t understand the impact a bicycle can make in their lives, appear to be the reason for the under-ownership of the bicycle. Additionally, cultural resistance in some parts of India might also be responsible to make it difficult for women to own bicycles whereas in similar conditions in other developing countries like China and Brazil there might not be any resistance. Lets look at these issues.

Let me take the point of ignorance about the benefits of bicycles first. The fruits of investment in a buffalo, goat, sewing machine, poultry and fishery are very much visible to a human mind. But at the same time the benefits of education, roads, vehicles and to that effect even communication are not that much tangible and provide a secondary support in income generation. Though they may have a significant impact, their impact is not readily evident and may take time to materialize.

Links for References

Please click here to get the internet-links to download the references mentioned in the Bicycle Report.




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