I n the past couple of months, India has witnessed its transport infrastructure come under massive strain. In October and November, trains to Bihar experienced immense rush, owing to migrants travelling home for Chhath Puja and the Bihar elections. Travellers were forced to travel in cramped and inhospitable conditions in unreserved compartments due to the paucity of trains. In December, the mass cancellation of Indigo flights owing to regulatory non-compliance led to stranded passengers and inflated prices.

Both events can be used to explain the reaction of prices and the responses of government and private players to demand and supply shocks. But the divergent behaviour of prices — and its effects — in these cases indicate the constraints imposed on welfare in a neo-liberal economy. Lo

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