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MOTORINDIA
l
June 2012
111
beyond the capacity of poor com-
mercial vehicle owners. AIMTC re-
sents the current trend of unilateral
decision making at all levels without
consultations with the stakeholders.
The Ministry of Finance has ini-
tiated a Bill to separate motor in-
surance from the Motor Act, 1988.
It has been proposed to amend the
Act of 1988 by deleting Section(s)
140 to 173 of the Act and enacting
a special new Act titled the Motor
Vehicles Insurance and Compensa-
tion Act, 2011.
In essence, the draft of the Bill
proposes a cap of Rs. 10 lakhs on
third-party compensation or on the
liability arising out of death or body
injury caused to a third party by any
vehicle on road. Notwithstanding
the same, the draft Bill proposes
impounding of the vehicle involved
in the accident by the police till the
disposal of the claim petition.
If the amendment as proposed is
introduced, its repercussions on the
owner of vehicles would be far-
fetched in as much as the balance
amount of compensation would be
recoverable by the victim from the
owner of the vehicle, who may not
always be in a sound financial po-
sition. In case the proposed amend-
ments are carried out by the Gov-
ernment, the cost of insurance for
operators will go up.
Imminent hike in diesel price
The Goa Government has done
a yeoman service for the common
man by reducing VAT on petrol.
A similar bold initiative is also re-
quired with regard to the imminent
hike in diesel prices. Diesel is the
highest input cost in running of ve-
hicles, and most of the work in this
trade is contractual in nature. A cor-
rection in freight is highly unlikely
due to the sudden fluctuation in the
diesel price under contractual obli-
gation.
Diesel price hike is a very sensi-
tive issue not only to the road trans-
port industry but also to the common
man who continues to bear the brunt
of the current inflationary pressure.
The State Governments would do
well to emulate the bold step taken
by the Goa Government for saving
the transportation industry.
The road transport industry won’t
be able to absorb any imminent hike
in diesel prices, and it suggests that
the Government should reduce the
excise, customs duty and VAT on
diesel as the Central and State taxes
make up nearly half of the diesel
price.
Transporters are the worst af-
fected by the differential pricing in
different States as the vehicles trav-
el throughout the country. Besides
a uniform rate of diesel across the
country, diesel and petrol should be
brought under GST.
Unfair tyre pricing
Tyre companies keep raising pric-
es at regular intervals. The fallout
of such deliberate increase in tyre
prices is quite adverse and always
remains a contentious issue among
tyre manufacturers and the transport
community. It would have been bet-
ter if tyre companies call a meeting
of AIMTC and the related bodies
and explain the reason for increase
in prices.
There is a huge gap between de-
mand and supply of tyres in the
market. Imposition of anti-dumping
duty will create scarcity of tyres,
and the domestic players will defi-
nitely increase the price bar to reap
profits. Currently tyres are being im-
ported at a cheaper rate even after
including the logistics cost, while
domestic players are pricing tyres at
a premium. The Government should
dismantle the cartel of tyre manufac-
turers by revoking the anti-dumping
duty on import of tyres from China.
Overloading
The problem of overloading of
vehicles has proliferated all over the
country. It is time that a strategy was
devised to tackle it effectively. Per-
haps the stand taken by the Bihar,
Uttar Pradesh, Andhra Pradesh and
Haryana to invoke the Prevention
of Damage to Public Property Act
1984 to curb overloading could be a
model step in this direction.
There is also rampant overloading
on the National and State Highways,
because many States have legalized
overloading by issue of special to-
kens on payment of fees. This prac-
tice is in clear violation of the M.V.
Act.
The Ministry of Road Transport
and Highways should take a seri-
ous view of this. Checking of over-
loading falls under the purview of
the respective States/UTs. There is
road transportation