“Sometimes it takes nearly an hour, especially in the evening. Traffic congestion has only worsened over the years. I try to leave early in the morning to avoid it,” he said.

Delhi is India’s fourth most congested city and 23rd globally, with commuters losing 104 hours annually during rush hours, according to the TomTom Traffic Index 2025 released earlier this year. Bangalore, Pune, and Mumbai are the top three most congested cities in the country.

With lakhs of vehicles added to the capital’s roads annually — 6.4 lakh new vehicles were added in FY2025-26, taking the total count to 87.6 lakh — the daily gridlock on arterial roads, traffic crawling during peak hours, and rising vehicular pollution have become a major concern for the government.

To fix the problem, policymakers have provided for congestion pricing — a tax on vehicles entering congested areas during peak hours — in the recently notified Master Plan of Delhi-2047, the blueprint for Delhi’s development aligned with the Centre’s Viksit Bharat vision.

Congestion Pricing

Transport experts argue that it is the need of the hour, not just in Delhi but for all cities grappling with severe traffic congestion. 

“Delhi’s new master plan is a good signal that we have to come out of the traditional, dinosaur approach to urban planning and travel management,” Anumita Roychowdhury, Executive Director, Research and Advocacy, Centre for Science and Environment, told The Secretariat.

The provision for congestion pricing is in line with the recommendations of the NITI Aayog and the Economic Survey 2025-26 to cut emissions, ease congestion, and improve mobility in cities.

Implementing it, however, will be a challenge, especially in the absence of adequate public transport alternatives in Indian cities. While announcing the provisions of the new master plan, Union Housing and Urban Affairs Minister Manohar Lal said there is no immediate plan to implement congestion pricing.

 

What Is Congestion Pricing?

It is a transportation demand-management strategy aimed at restricting the entry of vehicles in congested parts or business districts of a city during peak hours by levying hefty charges.

Vehicles are charged depending on their type and entry time in some cities.

For instance, for cars, the daily congestion charge in London is £18, while in New York it is US$ 9. In rupee terms, this ranges from ₹600 to ₹2,700 per day across different cities of the world.

Vehicle owners can register with the implementing agency and pay online. A vast network of cameras in congestion zones checks if a vehicle’s number plate matches the payment made by the owner.

Roychowdhury said Indian cities should learn from global experiences and adopt new-generation techniques. These include congestion pricing, creating low emission zones, dynamic parking pricing, and restricting parking in Transit Oriented Development zones. “Now we have to implement these new generation solutions – and simultaneously,” she said.

Global Experience

London, Durham, Stockholm, Gothenburg, Singapore, Milan, and New York have successfully implemented congestion pricing despite initial public resistance. Transport experts say that most of these cities have been able to reduce congestion, increase travel speed, improve air quality, and nudge people towards public transport.  

In India, no city has it so far.

While Singapore was the first country in the world to introduce Congestion pricing in 1975, London implemented it in 2003 in over 22 sq km of central London. The measure has been able to reduce congestion in the restricted zone, though the impact on travel speed varied in Singapore and London.

“In Singapore, the measure had a positive impact as it helped in decongesting the Central Business District and also considerably improved the traffic speed in the restricted area. In London, the traffic speed has improved marginally. But at least the level of service in central London has remained the same over the past two decades (and not worsened),” said Amit Bhatt, managing director of International Council on Clean Transportation in India.

Stockholm implemented congestion pricing in 2006 along with measures to improve public transport and parking facility pricing. According to an Observer Research Foundation paper on congestion pricing, the strategy helped in reducing congestion and improving air quality.

Stockholm's success paved the way for it in Gothenburg, the second-largest city in Sweden, in 2013, the paper said.

However, it has not been easy for these cities to implement this contentious strategy.

Bhatt said it is a hard sell even though congestion pricing and dynamic parking pricing are essential to discourage the use of private vehicles. “Almost all major cities faced resistance from the public, and in some cases politicians, initially. But the authorities in London, New York, and Stockholm implemented it despite opposition from the public,” he said.

“Now people can see its benefits. These cities have used the revenue generated from congestion tax for upgrading public transportation systems,” said Bhatt.

Congestion Pricing: A Hard Sell

Referring to the success of congestion pricing globally, the Economic Survey 2025-26 has recommended targeted congestion pricing in dense business districts, combined with demand-based parking management.

While the Master Plan of Delhi-2047 provides for congestion pricing, the strategy has been proposed by policymakers in the past too, without getting much traction.

The Municipal Corporation of Delhi in 2011 had proposed a congestion tax in congested parts of the city such as the Walled City area. But it was turned down by its political leadership.

In 2018, the idea was proposed by the then Delhi Lieutenant Governor Anil Baijal to decongest business districts, markets, and a few arterial roads. But the plan never saw the light of the day.

Now, with traffic congestion impacting quality of life in cities due to air pollution and resulting productivity loss, it is time to take some tough decisions.

A report by the Centre for Science and Environment in 2025 highlighted that traffic congestion leads to productivity loss, with unskilled workers in Delhi likely to lose ₹7,200-₹19,600 annually. “Skilled and highly skilled workers can lose as much as ₹8,300-₹23,800 and ₹9,000-₹25,900 a year, respectively. This equals up to upto 12% of their monthly income,” the report said.

Traffic congestion during peak hours in the four cities of Delhi, Bengaluru, Mumbai, and Kolkata costs the economy ₹1.47 lakh crore annually, according to a Boston Consulting Group report released in 2018.

One of the key reasons for the reluctance of the political class to implement congestion pricing is the lack of public transit alternatives. Roychowdhury said that while public transport services are being expanded, economic measures to reduce dependence on personal vehicles have to be taken simultaneously.

Some states are exploring this option. According to media reports, the Fifth State Finance Commission of Karnataka earlier this year recommended a London-style congestion tax on the busy roads of Bengaluru.

The Way Forward  

Transport experts, however, caution that India can’t simply replicate the congestion pricing model of western countries.

Pawan Mulukutla, Executive Director, Integrated Transport & Clean Air at WRI India, said there is a need to implement measures such as congestion pricing to discourage the use of private vehicles, but with proper planning.

“There is a need to rethink, design it as per local conditions, and prepare a long-term plan for its implementation. We have to nudge behavioral change in people by incentivising the use of public transport and also make a long-term plan for the implementation of congestion pricing,” Mulukutla told The Secretariat.

Some key considerations while implementing congestion pricing in cities are equity for lower-income groups and availability of good public transport alternatives.

“A large section of the population works in the informal sector and is dependent on private vehicles. If good and affordable public transport alternatives are missing, then congestion charges will adversely impact lower-income vehicle owners,” he added.

The total number of two-wheelers in Delhi increased to 59.2 lakh in 2025-26 from 54.8 lakh in 2024-25.

“We can’t avoid congestion pricing for too long, though building public and political support for it will be a huge challenge,” said Roychowdhury.