The lifting of restriction on the movement of passenger vehicles came as a relief for both the public as well as the auto drivers in Dimapur but with nothing said about fares till date, passengers have been at the receiving end, reported this newspaper on September 5. A day after another local daily reported that the common citizen in Nagaland is yet to see “respite from oppressive public transport services.”
Nagaland Government issued new Standard Operating Procedures (SOPs) for the Unlock 4.0 on August 31 and taking into accounts several issues related to the ongoing crisis, guidelines clearly stated:
“The fares to be charged by all categories of passenger vehicles will be at the rate as prescribed by the RTAs/DTAs which may consider revising/re-fixing within reasonable limits, keeping in view the restrictions on the number of passengers.”
However, the Regional Transport Authorities (RTAs/RTOs) and most District Transport Authorities (DTAs/DTOs) across the State are yet to issue any notification on the issue. So far, it was reported that only the Wokha district administration had issued a notification fixing fares of public transport (taxi) while Dimapur district administration has assured to revise the rates at the earliest.
For others, they seem to be depending on the “invisible hand’ of the market for a service that is essentially considered public goods - commodities or services that benefit all members of society; a most unapt solution during these extraordinary times.
In ordinary times and for normal goods and services, the interaction of demand and supply in a free market presumably ensure the determination of optimal prices without any observable intervention from any authority. In other words, the prices automatically adjust itself depending on demand and supply – the invisible hand doing the tricks. This is the cornerstone of classical and free-market economics, where any sort of intervention is seen as an anomaly having an undesirable impact on the market.
But does the system always allocate resources efficiently and benefit society as a whole? Not necessarily, and this is where the concept of market failure arises - “the economic situation defined by an inefficient distribution of goods and services in the free market.” In market failure, the individual incentives for rational behaviour do not lead to rational outcomes for the group, investopedia explains.
Ideally, while making any economic decision, humans, faced with unlimited wants and scarce resources, always choose the option that provides them with the highest amount of personal utility or satisfaction from the choices available. Often, higher prices for producer and lower prices for consumers are considered to be giving the ‘highest’ utility.
The present case reflects a situation where the demands are high but the services are low. Accordingly, if one follows normal economic theory, the producers (transport operators) has every right to charge the highest prices the consumers can pay.
Even in normal times, however, the case of public goods is an exception to the rule. And these are extraordinary times and to leave the general public at the mercy of the ‘invisible hand’ of market forces is simply unjustifiable.
The State Government issued the consolidated guidelines on August 31. Between then and now, such mechanisms should have been in place.
The RTA/DTA and other concerned authorities must be ignited and intervene immediately to correct the anomalies in the market. In doing so, the concerns of both the services providers and the consumers must be taken into account so as to ensure that both sides benefit, through balancing, and not by one benefiting at the expense of others. The concerned authorities must also activate complaint mechanism so that unscrupulous elements taking advantage of the ‘invisible hand’ could be checked.
