Reboot – Challenges Plaguing the Transport Sector

Scrappage Policy - A Must

Over last 15 years Road Transport Sector has consistently contributed around 5% of GDP. Over years Transport Sector has been a major neglect and seemingly has been going on in Auto Mode. Challenges plaguing the Transport Sector has been here for long and an entire system reboot is required before the elastic limit is crossed & we reach a point of no return.

Major Challenges over the years have remained more or less same without any respite coming from any end. Regional Transport Associations lead by All India Motors Transport Congress have been vocal about these challenges without any major breakthrough.

Also Read – Is Anyone Listening???? – Trucking Needs Help

Let’s have a look at Challenges Plaguing the Transport Sector & the interests of Transporters from a Single Vehicle Operator to a Fleet Owner.

  • Absence of One Nation One Tax Structure – Each and every state has different Tax Structure on Permits/Road Tax/Registration. With some states incentivising the registration process over other leading to loss of revenue to exchequer, increased corruption & inconvenience.
  • Rampant erection of Toll Plazas – As per the fee rules 2008 the spacing between two adjacent toll plazas should be 60 km. We have locations where the distance norms are practically violated intentionally or by finding gaps in the policy document.
  • Insurances & RTO Fee Structure – Insurance & Fee Structure in itself require a revamp. In-spite of Govt. spending heavily on Road Infra, average running of trucks is still under 30km/hr in the country. Due to High Loading/Unloading time transporters end up paying crores in Insurance & Taxes for a CV standing idle. Insurances & Permit Taxes are annual lumpsum amounts paid at the time of new purchase/renewals.
  • Fuel Pricing – With International Crude Pricing at the lowest yet no respite seen here in the Indian retail crude pricing. Fuel Expense is the single biggest Variable Cost while operating a commercial vehicle with 60% going into it.
  • Highest GST Slab on Commercial Vehicles – Commercial Vehicles are lifeline of Indian Economy practically transporting every commodity from one end to the other. Yet CVs come under the bracket of 28% GST which is tax bracket for Sin Products. Irony, CVs which provide livelihood to crores are being considered as Sin Products?
  • Increased Axle Ratings on Trucks – In 2018, MoRTH increased the Axle Ratings on Heavy Trucks without any benchmarking or cut-off. Overnight 25% Overload on existing trucks got legalised even if the truck was manufactured in 2003. The vehicles which aren’t even designed to take such loads ensuring Road Safety and Emission Norms compliance is a question.
  • Emission Norms Transition – Till 2016, for any update in Automobile Industry cut-off date used to be on the manufacturing of the products. Be it implementation of Emission Norms, OBD Compliance, Speed Governor etc. MoRTH failed the Transport Fraternity & OEMs in implementation of BSIV In 2017 & BSVI in 2020. This lead to heavy unsold stocks with lockdown adding to vows. Recently country’s largest Car Manufacturer Maruti issued a statement regarding writing off 125Cr unsold Inventory.
  • Scrappage Policy – Years have gone by without any clear guidelines on Scrappage policy in place. Time & again Govt. issues statements on coming up with policy but when will it happen is a Question Mark.
  • Pollution Control Certifications – Last year government increased penalties under amended CMVR rules which saw a massive jump of automobiles reaching PUC Centres. Practically all Cars & BSIV CVs in the country being BSIV OBD II complaint since 2013. All vehicles with OBD II go into lymph mode if they fail to meet emission standards. Same rule applies to all the heavy CVs sold after April 2017 in the country. Then why the need to PUC Certification of these automobiles?
  • Poor Control on Over Loading – In the absence of stricter curbs coupled with corruption within states, Extreme Over Loading dilutes the agenda of Road Safety as well.
  • Corruption at Check Points – Various transport bodies have time and again highlighted the exploitation of fellow members at different check points in the name of entry fees.

Conclusion –

Above concerns are of uttermost priority in addition to the below urgent need of the hour challenges.

  • Since in CVs every cost calculation is done basis per Kilometre, be it Freight Rate, Fuel Mileage, Tyre Cost why can’t there be Insurance products basis use & pay. Today a vehicle which has annual running of 40k has the same insurance premium as the vehicle running 1.2L per year. Insurance Premium for vehicles remain the same whereas risk involved is much higher for the vehicle clocking higher Kilometre in a year.
  • The same applies for Road Tax, Permits & other taxes applicable at the RTO level.
  • Maintenance charges of the vehicles again need to be basis Use & Pay. GPS devices which are standard fitment in each CV, OEMs need to come up with customised plans linked to usage basis GPS.
  • When will free movement of trucks across country turn into reality without any check post. Since now all vehicles are fitted with HSRPs and Registration Numbers part of GST Invoice, electronic scanning is very much possible even if required.

Time has come government takes a note of these Challenges Plaguing the Transport Sector and finds a way out before it’s too late. Stress is building up in system and industry is on the verge of collapse. Timely intervention will ensure everyone stays afloat including the Indian Economy.

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