The Motor Vehicles (Amendment) Act, 2019 Bill Passed

The Motor Vehicles (Amendment) Act, 2019

Updated on 21 August, 2019

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The Motor Vehicles (Amendment) Bill, 2019 was passed by the Parliament on 31st July 2019. The Bill seeks to amend the Motor Vehicles Act, 1988 to provide for road safety. In the last few years, with growing urbanization and rising incomes, the number of motor vehicles in India has been increasing steadily. The number of registered motor vehicles in India grew by 123% between 2005 and 2013. Between 2005 and 2015, the number of road accidents increased by 14%, and road accident fatalities increased by 54%.  During the same period, the road network grew by 44%. An increase in the number of vehicles on roads, along with the absence of a coordinated policy to control the problem has been attributed to an increase in the number of road accidents. According to the road transport and highways ministry, half a million accidents are reported in India every year, in which 150,000 people lose their lives. With the number of road accidents increasing, the Ministry of Road Transport and Highways appointed the Committee on Road Safety in 2007 (Chair: Mr. S. Sundar) to examine the magnitude of road traffic injuries and fatalities.   The Committee recommended setting up road safety authorities (at both national and state levels).

  • The Sundar Committee had observed that the existing institutions in India do not have the required capacity to look into road safety.
  • The responsibility for road safety is diffused across various bodies, and there is no effective coordination mechanism between these bodies.
  • The existing National Road Safety Council does not have adequate statutory backing, resources, or the mandate to affect road safety.
In April 2016, the central government constituted a group of state transport ministers (Chair: Mr. Yoonus Khan) to recommend reforms for the road transport sector.  The group recommended that the Motor Vehicles Act, 1988 be amended to address urgent issues related to road safety. The 2019 Act provides for the grant of licenses and permits related to motor vehicles, standards for motor vehicles, and penalties for violation of these provisions. Key provisions
  • Compensation for road accident victims: The central government will develop a scheme for cashless treatment of road accident victims during the golden hour.
    • The Bill defines the golden hour as the time period of up to one hour following a traumatic injury, during which the likelihood of preventing death through prompt medical care is the highest.
  • The central government may also make a scheme for providing interim relief to claimants seeking compensation under third party insurance. The Bill increases the minimum compensation for hit and runs cases.
  • Compulsory insurance: The Bill requires the central government to constitute a Motor Vehicle Accident Fund, to provide compulsory insurance cover to all road users in India.
  • Good samaritans: The Bill defines a good Samaritan as a person who renders emergency medical or non-medical assistance to a victim at the scene of an accident.
    • Such a person will not be liable for any civil or criminal action for any injury to or death of an accident victim caused due to their negligence in providing assistance to the victim.
  • Recall of vehicles: The Bill allows the central government to order for recall of motor vehicles if a defect in the vehicle may cause damage to the environment, or the driver, or other road users.
  • National Transportation Policy: In consultation with state governments. The Policy will establish a planning framework for road transport, develop a framework for the grant of permits, and specify priorities for the transport system, among other things.
  • National Road Safety Board: The Board will advise the central and state governments on all aspects of road safety and traffic management.
  • Offenses and penalties: The Bill increases penalties for several offenses under the Act. The central government may increase fines mentioned under the Act every year by up to 10%.
  • Taxi aggregators: The Bill defines aggregators as digital intermediaries or market places which can be used by passengers to connect with a driver for transportation purposes (taxi services). These aggregators will be issued licenses by state  Further, they must comply with the Information Technology Act, 2000.
Issues to consider
  • Electronic Monitoring of Road Safety - Ensuring electronic monitoring across roads in a state could incur a significant amount of infrastructure investment on part of the states (such as CCTV cameras, speed detectors, training programs, etc.).
    • The Bill does not specify whether such costs will be borne through a central scheme or through additional grants to the states from the center.
  • The financial memorandum of the Bill also does not provide for any financial support to states to implement such infrastructure.
  • Agency responsible for road safety - While the amendments provide for setting up a National Road Safety Board, it would still be advisory in nature.  As per the amendments, the Board will provide advice to the central and state governments on the setting of road standards.
  • Road design and engineering - The Bill provides that the central government will set the design, construction and maintenance standards. The Sundar Committee on Road Safety had recommended that the powers to set standards and follow up on their compliance cannot be vested in the same department or Ministry which is also responsible for the construction and maintenance of roads.
  • Penalty for non-compliance with safety standards - The penalty for non-compliance with the safety standards will be a fine of up to one lakh rupees. The question is whether a fine of one lakh rupees would be a sufficient deterrent for contractors when the cost of such projects is above Rs 15 crore per km on average.
  • The Bill caps the maximum liability for third party insurance but does not cap the compensation amount that courts can award. In cases where courts award compensation higher than the maximum liability amount, it is unclear who will pay the remaining amount.
  • 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.
  • 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.
Way-Forward
  • The Standing Committee examining the 2016 Bill had recommended that the central government should help states with the technical expertise, and logistics to make roads safer.
  • The Sundar Committee had recommended that the National Road Safety Board should have the freedom to set safety standards with regard to the design, construction, and maintenance of roads and motor vehicles.
  • It should also have the power to monitor compliance, issue directions regarding compliance and levy penalties, where necessary.
Road design should be such that it corrects driver behavior towards safer alternatives. Other countries, such as Sweden and Australia, recognize that humans will make errors, and therefore focus on designing road transport systems which minimize the opportunity for human error.


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