March 31, 2024

Modi-led NDA Govt Ruins Road Transport Sector: AIRTWF Calls for Defeating BJP

R Lakshmaiah

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IT is widely recognised that transportation plays a critical role in any economy, making society as we know it impossible without it. According to the ministry of road transport and highways (MORTH), the road transport sector in India is responsible for transporting 80 per cent of passengers and 62 per cent of goods. This sector contributes 4.5 per cent to the GDP and employs approximately 10 crore workers, including drivers, conductors, mechanics, and booking clerks. Additionally, the auto rickshaw and taxi segments have provided self-employment opportunities for many educated unemployed youth. However, the policies introduced by the Modi-led government have resulted in a severe financial crisis within this crucial sector. It seems that these policies were implemented with the intention of transferring control of the sector to large companies. Now, let us examine the unfolding of this crisis.

When Narendra Modi took office as prime minister, the international crude oil price was $109 per barrel. At that time, the diesel price was Rs. 56 per litre. Since then, the prices have gradually come down. As of March 1, 2024, the crude oil price is $82 per barrel, and the diesel price is around Rs 90 per litre. Table I provides year-wise average crude oil prices, collected diesel/petrol prices, the actual price according to international market oil prices, and the amount squeezed from each auto rickshaw, taxi, and lorry.

The most crucial point to remember is that the Covid-19 pandemic has disproportionately affected the lives of people, particularly those who are poor, around the world. During June 2020, crude oil prices in the international market reached their lowest level of $20 per barrel in April 2020. Ironically, during this same period, the Indian government increased the excise duty on diesel by Rs. 16 per litre and on petrol by Rs. 13 per litre between March and May. This was an unprecedented move, unlike what many other countries, including the USA and UK, did by providing financial relief to their citizens. However, the Indian government, under the leadership of Narendra Modi, burdened its people by increasing petrol and diesel prices. This decision not only adversely affected the road transport sector, but also had a cascading effect on the prices of all commodities due to increased transportation costs.

According to an article in the Times of India newspaper on March 23, 2024, both private and public sector oil companies have refused to import crude oil from Russia due to USA sanctions. As a result, we now rely on the USA for our oil supply. Currently, Russian crude oil is cheaper and India pays for it in Indian rupees, whereas we have to pay for oil from other countries in US dollars. Additionally, transportation charges for Russian crude oil are lower because of its proximity. In this situation, rejecting Russian crude oil would be harmful to the nation and its citizens.

Secondly, the third-party insurance premiums for all motor vehicles have nearly doubled in the past decade. The specific information can be found in Table II. Ideally, insurance premium rates should be calculated based on the number of accidents and the corresponding compensation paid out. According to the Ministry of Road Transport statistics, there has been a decrease in accidents since 2014, except for the year 2015 (refer to Table 3 for more details). It is concerning how the insurance premiums have disproportionately increased. This seems to be solely for the purpose of maximising profits for the avaricious private insurance companies, at the expense of the ordinary vehicle owners. For a breakdown of the third-party insurance premium rates by year, please consult Table II.

Thirdly, let's discuss the collection of toll charges. Typically, when a toll plaza is established, an assessment is made to determine the number of vehicles that will pass through and how long it will take to recover the invested amount (including interest and profit). Based on this assessment, the National Highway Authority of India (NHAI) decides on the toll charges for different types of vehicles. However, it is worth noting that no toll plaza has been closed to date, and vehicles are not allowed to pass freely once the designated time period has expired.

Furthermore, it is surprising that the government of India has granted toll plaza contractors the permission to increase toll charges by 10 per cent annually through an official notification. Under the leadership of Prime Minister Narendra Modi, the government has decided to hand over 26,000 kilometers of existing highways to private entities or firms under the "National Monetisation Pipeline" initiative. However, during the implementation of this initiative, the NHAI will have no control over the toll charges or the distance between toll plazas.

Currently, two-wheelers and three-wheelers are exempt from paying toll charges. However, there is no guarantee that this exemption will continue after the implementation of the monetization plan. For reference, Table III provides the amount collected through the road and infrastructure development cess from 2014-15 to 2022-23.

One important factor to consider is that the government introduced the "Road Development Cess" in 1998-99. Initially, a cess of Rs 6 per litre of diesel and petrol was levied, in addition to the existing duties and taxes, until May 2018. The rate of this cess increased to Rs 8 per litre from June 1, 2018. The purpose of this cess is to fund the construction and maintenance of new roads. However, after the Modi government came to power, the name was changed to "infrastructure development cess," expanding its utilisation to include infrastructure projects such as railways, ports, and airports.

The collection of toll charges despite the collection of the road development cess for road construction and maintenance raises concerns. It appears to be a means of deceiving the people of India and diverting funds to various sectors at the discretion of the government. Table III provides details of the amount of cess collected from 2014-15 to 2022-23.

These three factors have severely impacted the road transport sector, leading to a serious financial crisis and threatening the livelihoods of millions of workers in this industry.

Furthermore, the M V Amendment 2019 Act aims to eliminate self-employed individuals who own one or two vehicles. To achieve this, the penalties for various offenses have been unreasonably increased. For example, the minimum penalty of Rs 50 has been raised to Rs 1000. As a result, auto-rickshaw drivers are now facing thousands of rupees in penalties each month for minor infractions. The same situation applies to taxi and lorry drivers. This heavy-handed approach is causing unnecessary trouble for these individuals.

Another concerning factor is the vehicle scrapping policy, which requires vehicles that are 15 years old to be scrapped and replaced with new ones. Given the current challenging circumstances, it is unrealistic to expect small vehicle owners to purchase new vehicles. This policy appears to prioritise boosting vehicle sales and maximising profits for Indian and multinational manufacturing companies.

With the 18th Lok Sabha elections approaching, there seems to be no alternative but to defeat the BJP-led NDA in order to protect the road transport sector, the workers' livelihoods, and ultimately the nation as a whole. The All India Road Transport Workers' Federation calls upon all road transport workers, stakeholders, and their family members to vote for Left/democratic/secular parties and ensure the defeat of the BJP-led NDA.





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