The Motor Vehicles (Amendments) Act 2016

  Aug 15, 2016

The Motor Vehicles (Amendments) Act 2016

Act passed in Lok Sabha
The Motor Vehicles (Amendments) Act 2016 was passed in the Lok Sabha on April 10.

Other issues of concern
1.Stricter and higher penalties
While the penalties have to be there for offenders, there seems to be no correlation between stricter and higher penalties with reduction in road traffic crashes in countries where road traffic deaths have reduced over the years. Higher fines as a deterrent to traffic crashes are based on the assumption that the driver is careless, and that the fear of higher penalty will encourage “careful” behaviour on the road.

2.Private operators
Private operators focus on maximising profits and externalities like accidents, pollution and service to the needy are ignored. Private operators have to be carefully regulated. Without effective regulatory mechanisms, private operators will come into the market, existing state transport corporations will suffer and all negative externalities will increase. In short, the overall impact will be exactly the opposite of what this amendment is intended for.

3.Drivers’ address
In the current system where often drivers’ addresses are not updated and passenger vehicles do not require annual registration, electronic surveillance for speeding, red light jumping and violation of other offences remain meaningless since the correct address of the driver is not known. If the address change requirement is implemented in all earnest, the e-challan system will become more effective.

4.Hit and run
Under the Act, compensation for hit and run victims comes from a Solatium Fund.  The Bill creates a new Motor Vehicle Accident Fund in addition.  With a Fund already existing to provide compensation for hit and run accidents, the purpose of the new Accident Fund is unclear.

5.Taxi aggregators
State governments will issue licenses to taxi aggregators as per central government guidelines.  Currently, state governments determine guidelines for plying of taxis.  There could be cases where state taxi guidelines are at variance with the central guidelines on aggregators. 
Every state should be encouraged to propose a time-bound roadmap for adopting this system.