Influence of Government Policies on Demand for Cars and Commercial Vehicles in India in a Comparative Perspective of the Experience of Developing Countries

The paper examines the change in the degree of influence of government policies on demand for cars and Commercial Vehicles (CVs) in india during the period from 1980 to 1994. Then for the year 1991 it compares this influence for India with that of an average developing country. The main findings are that influence of government policies on demand for cars in India was greater during the early and mid eighties than during the nineties from 1991 to 1994. There was no change in the influence during the period from 1988 to 1994 on demand for cars and from 1980 to 1994 on demand for commercial vehicles (namely, light commercial vehicles, buses and trucks). The influence of government policies on demand for cars was greater in India than what the average experience of the developing countries would indicate. For commercial vehicles, the influence of policies on demand in India was similar to that across the developing countries. Thus, depending on the model for prediction, by year 2010, the level of ownership of cars predicted from the average experience of the developing countries would be only about 76 to 85 per unt of India's forecast of ownership of cars. For commercial vehicles, the ratio is near about unity for the same year 2010.