This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email

Market Failure

Cheaper cars set to clog Indian roads

Car ownership will soar amid warnings of pollution disaster


NEW DELHI - IT MAY be an Indian consumer's dream - cheap cars within reach of millions in a swelling middle class. But it could also prove to be a traffic and environmental disaster.

Nissan Motor and Renault announced last week they were looking at producing a US$3,000 (S$4,600) car to compete in India against Tata Motors' planned US$2,500 'people's car' to hit the market next year.

For its supporters, cheap cars like these are what the Volkswagen Beetle was to Germany or the Mini to England - the spoils of an economic boom for aspiring middle classes.

To its detractors, India will see an explosion in traffic and pollution on its already clogged roads from its more than 1.1 billion inhabitants.

It will add to India's carbon dioxide output just as many Western nations push the Asian giant to control emissions.