At just over a million units a year, the Indian passenger car market (including utility vehicles) accounts for less than 2 per cent of the global market. But when it comes to small cars, the country is the third-largest market globally. Now, with crude prices showing no signs of going back to the $30 (Rs 1,320)-a-barrel level and consumers even in developed countries looking at small cars, the Indian automotive industry has spotted an opportunity to become a small car hub. What will India need to become one? Essentially four things: Global scale and quality, cost advantage, automotive brands and infrastructure. India already has two of the four, cost advantage and automotive brands. We need the other two. What are our chances of getting them? Pretty decent, actually.

Vehicle manufacturers will ramp up production if the domestic market, apart from those abroad, has the depth to consume cars in large numbers. Today, a car is beyond the reach of most Indian families-a reason why some six million two-wheelers continue to be bought every year. That scenario may change with growing prosperity, but not fast enough to give India an early start, especially at a time when China has started shipping small cars to Europe. So, the country needs to speed up. Happily for the manufacturers, the government seems keen to help. A task force has been set up to define what a small car should mean and suggest ways to encourage their production in India.

SIAM wants all cars less than 1.2 litres in engine size to be considered small. But the bigger issue is taxation. The effective tax rate on cars works out to a staggering 40 per cent (excise is only 24 per cent but there are state taxes). SIAM wants the Indian government to do what countries elsewhere in the world did to promote small car production: incentivise their ownership. In Japan, for example, K-cars (with less than 660-cc engines) attract lower taxes compared to bigger cars. Top vehicle manufacturers such as Maruti Udyog and Hyundai Motor, which already export a large number of cars, are expanding their manufacturing capacities in a bid to tap global markets. There's no reason why, given the appropriate incentives, carmakers cannot turn India into a global small car hub.

And Now, The IITs

Students at IIT Kanpur: Only the best get through, so...

Every now and then, a maddening desire to improve, to reshape, to tinker seems to descend on the HRD Minister of the day. Not too long ago, the previous occupant of the ministry, Murli Manohar Joshi, got into a wrestling match with the Indian Institutes of Management (IIMs) supposedly over the issue of tuition fees but actually over one of control, and eventually ended up all in a tangle. Now, the current occupant, the venerable Arjun Singh, has embarked on a mission to streamline the process of entry into the Indian Institutes of Technology (IITs), the joint entrance examination (JEE). Even if the changes suggested have not come from him, they must have his blessings; after all, they have been suggested by the IIT Council and the ministry itself.

The changes themselves involve replacing two exams, a screening one and a main one with a single exam; doing away entirely with complex non-multiple-choice questions; instituting a new eligibility standard of 60 per cent in the school leaving examination; and allowing students to appear for the JEE a maximum of twice, once in the year of graduation from school and once in the year immediately after (this has since been relaxed for JEE 2006). The reasoning behind the changes is that it will reduce stress levels among students, encourage them to pay more attention to their school leaving examinations, and prevent rampant commercialisation of the JEE system by coaching institutes (reducing the number of times a student can appear for JEE will likely reduce the size of the market itself).

The proposals themselves aren't radical, although they would seem to weaken the very basis of the JEE culture. For instance, the stress of cracking (that's the term of choice among aspirants) two tests, one very tough and the other, just tough, is something that ensures that only the very best gain admission into an IIT. And although it would be natural to assume that anyone who can get through the JEE will score more than 60 per cent in the school leaving examination, fact is, India has several tens of boards, and a person scoring 90 per cent in one would be hard-pressed to score 45 per cent in another. These, though, are specifics. At a general level, what was the need to tinker with a system that has shown itself to be a successful way to identify the best engineering talent in the country?

Primary education is where India faces its biggest problems, and the grey cells of Mr Singh and those of mandarins in his ministry would be put to better use thinking up ways to improve that than to fix something that isn't broken.

Right Turn

In the right direction: You may not see these ads for long

Beneath this slab
John Brown is stowed.
He watched the ads
And not the road.

That's Ogden Nash's little poem called lather As You Go, the words of which the government's roads and highways department seems to have heeded seriously. Recent newspaper reports say the department has banned all advertising on all national highways, particularly the new six-lane connectors that are being built across the country, because it is felt that these often distract drivers and cause accidents. Traffic accidents are the biggest menace on the highways and any attempt to prevent them is welcome. According to one estimate, more than 75,000 people are killed each year in Indian road accidents, the highest in the world, and 350,000 injured. Worse, more than a third of the fatalities and a fourth of all road accidents take place on the national highways.

But are hoardings on the highways a big cause for road accidents? Not much research or statistics for India is readily available to answer that. But a couple of years back, the Scottish government commissioned a review to explore in depth whether there was a connection between billboards (hoardings) and road accidents and found that it did. What's more, because such accidents tend to be under-reported, the risks of driver distraction could actually be higher. In any case, the risks were higher, the review found, when billboards were at big and busy junctions as well as on long monotonous stretches. We don't know whether the roads and highways department will take a cue from the Scots and do its own research to see whether Indians too watch the ads and not the road, but its move appears to be in the right direction, though the Rs 850-crore outdoor advertising industry may not agree.

Still, there could be bigger causes of road accidents than ads. Like cellphones. With a base of 62 million cellphone users, slated to grow to 300 million by 2009, driving while using cellphones is a traffic violation that is growing endemic. And quite possibly it is more distracting than checking out billboards, and perhaps as serious a risk as driving under the influence. To curb road accidents, not only on the highways but also within cities and towns, those are violations that the authorities need to clamp down upon-with tough laws and heavy punishments.

Meanwhile, there could be another fall-out of the rule to ban highway advertising-one that is summed up by another of Nash's verses:

I think that I shall never see
A billboard as lovely as a tree.
Perhaps unless the billboards fall,
I'll never see a tree at all.