Freewheeling

     
 

What really happens to the money collected from us by way of tolls, parking fees, entry taxes, even octroi and ‘zakat’?

To understand this better, you, dear reader, will have to get out of the comfort of your air-conditioned private car and travel on the highways of our country in a commercial vehicle. Certainly, it is not as though we’re spared in our private cars and bikes – far from it (unless, of course, we are elected representatives or others from similar privileged classes), but it’s nothing compared to what trade and commerce has to go through.

   

From the single pedal cycle moving coal or other products (one pedal removed to make pushing it uphill easier, since riding down will be largely free-wheel) to the large multi-axle trailer heading all over the country tracked by satellite communication monitoring systems – they all have one thing in common, at almost every turn and twist along the road, in most parts of India, they stop to pay. And things just entered a new dimension, with even small two-lane side roads and by-lanes now coming of age, and becoming eligible to charge tolls – in the name of ‘improvement.’ However, all said and done, most people would not mind paying a little bit of money if the overall effect was positive – by way of better roads and reduced time, as well as effort therein.

The other assumption is that the larger share of this money is headed to what we refer to as ‘the Government,’ a supposedly homogeneous entity who will ostensibly take the money from us and put it to good use for the larger benefit of the other supposedly homogeneous entity known as ‘the public’ – who incidentally, as per the Constitution of the country, are also the real true new sovereigns.

Typically, what happens to the money you pay, allegedly legitimately, on the roads goes like this:

a) Parking mafia: usurp all side roads and pavements in or around small sections of ‘authorised’ parking spaces, using simple laws of the jungle. A very nominal sum will actually reach the local government authorities, that also, usually, only for a few months – before the ‘authorised’ part of the parking area (if any) moves into the limbo land of some dispute or the other. After that, it’s pure profit for the contractor, who meanwhile sub-lets segments of his territory, expanding into other related side-businesses like swapping new tyres (yours) for old re-cuts (his) and other such entrepreneurial innovations.

b) Toll booth smoothies: this is much bigger business, especially if it can be coupled with ‘entry taxes / fees,’ as is done for commercial vehicles entering Delhi for example. Here the toll collected after deducting the amount specified for constructing and maintaining the toll road is supposed to be passed on ‘in toto’ to the local government with a small service fee deducted, and the toll amount is supposed to be based on a complex formula involving actual traffic as well as minimum standards to be maintained. In actual fact, the toll charged is calculated almost on a whim. One estimate suggests that just about 1/8th of the money collected actually reaches the government – and this is in and around Delhi. The margins are even higher at locations further away from urban centres.

c) Octroi duties: here again, octroi is farmed out to ‘agencies’ who bid a minimum amount by percentage payable to the local government. The real money lies in (a) corrupting the complete octroi system, (b) holding on to the ‘float’ for weeks, if not months, and (c) making onward payments by cheques that will bounce. This is best observed in places like Mumbai and Pune, where the ‘agents associations’ often go on strike if people in business wish to use the parallel facility of making direct payments to the local government using a variety of methods, by-passing these agents.

d) Entry tax games: this is really innovative, especially in and around Delhi, and based on a Supreme Court order from 2002 meant to reduce pollution by penalising trucks entering Delhi. The local Government has started levying entry taxes on ALL commercial vehicles, including local buses and taxies. The contract for these entry taxes have been farmed out, and now nobody has any idea of how the rates are set, how much of what is going back to the government coffers, and why public passenger transport vehicles are being charged in the first place.

All this, and more. Standby now to pay tolls on small side roads wherever ‘they’ can put up a booth or barrier. And be sure – most of it will not go to the ‘government.’

   
 

Veeresh Malik
malik@autox.in
 
 

Veeresh Malik has been one of India's leading automotive columnists and analysts for the past two decades
 
     
     
 
 
For reasons that needn’t be dwelled upon at length, trucks and buses in India don’t seem to generate the same kind of great interest with people as do cars and bikes, or, for that matter, railway engines or aeroplanes. One reason for this is that commercial road transport has always been treated as a step-child by governance in India ever since trucks and buses were first introduced on Indian roads. There has always been an effort by those in power to (a) control the free and frank movement of goods and passengers by road, and (b) treat commercial road transport as a short-term revenue generator, rather than as a long-term social benefit. At one time this was a colonial requirement. After 1947, it simply has not changed.

As a result, truck and bus transport across State and District borders are still subjected to massive doses of regulation and corruption, while those operating or actually driving these vehicles are often treated worse than criminals. A typical luxury bus or ultra powerful long trailer truck combination may well cost over a crore, and the value of the cargo or lives on board far more, but one small babu on the highway can hold them to ransom for hours, if not days, seizing documents and cargo as well as personal effects – in a manner worse than any pirates. Is it any wonder, then, that heavy road transport in India has an aura of a bad smell around it – the result of which is that only those who can handle it can work within the field?

Compare this, on the other hand, with surface transport over railway steel. Trains and railway systems in India are given extremely high preference in every regard, and their autonomy is also duly protected from local and State governance bodies – while social benefit ensures that priority is given to all aspects of rail transport. In a way, this is good, since trains do tend to be more environmentally friendly, and are extremely suitable for mid-to-long distance travel across peninsular India. But trains cannot exist as standalones, they have to be part of an inter-modal chain - imagine a passenger train railway station with no provisions for motor vehicles?

Likewise, there’s no denying one recent strong fact, visible especially in the last 10 years or so, and that’s the increased presence on our roads of smaller sized commercial road transport – to not just complete the missing ‘last mile’ from railway stations and goods sheds, but also the penetration into areas not served by trains. Previously covered by other means of transport, including headloads and animal drawn carts in remote areas, we now see sub-one-tonne cargo and passenger carriers, of the Tata Ace and Maruti Omni genre, all over the country. More power to them, and all the other manufacturers rapidly entering the fray in this category.

It is this category of commercial transport – the quasi buses in the 5-15 seater categories, and the smaller goods carriers, which will very soon need special treatment and help. As on date, largely worked by individual owner/operators, this category is totally at the mercy of local elements – from initial financing onwards, till eventual resale. Loans are difficult to come by, since most of those who own and operate such vehicles cannot provide much by way of collateral, even if they are literate. The understanding of the ‘permit’ regime takes forever. In some places, taxes are calculated by RTOs on weird methods, using seats as well as floor space, and neither agrees with the other – so it’s the operator who suffers. No entry, tolls, entry taxes, documents for people and goods carried, the list can go on.

Despite all this, there’s no denying that the day of the small people carrier and mini truck is on us in India, and that autoX will be there in that space too. We plan to start with by offering our classifieds ad space for those interested in selling (and buying) commercial vehicles, as well as editorial coverage of new and interesting aspects of commercial vehicle transport. After all, this copy of the magazine could not have reached you otherwise?
 
 
     
Veeresh Malik first drove a huge tank trailer transporter when he was about 6 years old. He's been hooked on trucks since then
     
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6 July 2010

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