Efficient public transport results in stronger household liquidity management: EAC-PM working paper

New Delhi, Jan 15 (PTI) Improved access to efficient public transport reduces households’ dependence on private vehicles, thereby lowering recurring transportation expenses, a working paper titled released by the Economic Advisory Council to the PM (EAC-PM) said on Thursday.

The lowering of recurring transportation expenses in turn eases the burden of servicing EMIs -- a factor among the most significant fixed financial commitments for urban households, according to the paper titled 'Golden Decade of Infrastructure Development in India with Special Reference to Metro Rail Network'.

Citing the examples from Hyderabad, Bengaluru and Delhi, the paper said there are economically meaningful improvements in household financial discipline in metro-served areas.

According to the paper, while empirical results from Hyderabad indicate that households residing in metro-served PIN codes exhibit a 1.7 per centreduction in delinquency incidence alongside a 1.8 per cent rise in prepayment activity, in Bengaluru, the behavioural adjustment is even more pronounced, with delinquency rates declining by 2.4 per cent and prepayment rates increasing by 3.5 per cent following transit expansion.

Evidence from Delhi points to a 4.42 per cent reduction in mortgage delinquency alongside a 1.38 per cent increase in prepayments.

"Vehicle registration data from such cities also corroborates our findings," the paper said.

The paper noted that, overall, investments in urban mobility infrastructure over the last decade -- particularly metro rail expansion -- have translated into stronger household liquidity management and more disciplined borrowing.

"These behavioural improvements form a critical foundation for household financial resilience and contribute meaningfully to broader financial stability," it said.

India's physical infrastructure has seen rapid progress in the last decade. Whether it is highways, airports or railways, India has made strides in every aspect. Almost all major infrastructure indicators increased by at least 2 times over the last decade.

India has witnessed unprecedented infrastructure development over the past decade.

A cornerstone of this transformation is the PM GatiShakti National Master Plan (PMGS-NMP), launched in October 2021, which adopts an integrated, multimodal approach to infrastructure planning to generate strong growth multipliers. PTI BKS DRR