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8/3/2019 Does Indian law/regulatory incentivize transport safety?
1/12
Does Indian law/Regulation
incentivize transport safety?
Submitted in partial fulfillment of the requirements of
Transport Infrastructure (Term 4)
By
Anandh Sundar (PGP 10032)
on
10th
September 2011
Professor
Prof. G Raghuram
Academic Associate
Ms Bhavana Dwivedi
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Table of ContentsIntroduction ............................................................................................................................................ 3
Basic Framework ..................................................................................................................................... 4
Rocking the baby and pinching the cradle .............................................................................................. 5
Terminals ................................................................................................................................................. 5
Right of Way ............................................................................................................................................ 5
Rolling Stock ............................................................................................................................................ 5
Policy induced Distortions ...................................................................................................................... 6
Safety Regulator ...................................................................................................................................... 6
Compulsory Insurance ............................................................................................................................ 6
Ad-hoc compensation norms non punitive ............................................................................................ 7
Sexual harassment .................................................................................................................................. 7
Good Samaritarian Laws ......................................................................................................................... 7
Creative Training ..................................................................................................................................... 8
Efficiency linked grant disbursal delays essential expenditure .............................................................. 8
Measuring the wrong things ................................................................................................................... 9
Heavy Vehicle Diversion due to tolls .................................................................................................... 10
Inconsistent safety norms for seat belts/helmets ................................................................................ 10
Safety not mandatorily engineered in during State level projects ....................................................... 11
Encroachment of footpaths-vendors v/s pedestrians and residents ................................................... 11
Mere Supply Side attempts ................................................................................................................... 11
Aligning Contractual Incentives ............................................................................................................ 11
Refresher Training to commercial vehicle drivers ................................................................................ 12
Parking Space Policy .............................................................................................................................. 12
Conclusion ............................................................................................................................................. 12
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IntroductionIn 2011, Indian transport has been struck with quite a few accidents. Whether it be the recurring rail
accidents, airline safety ,issues of almost collisions/fake licensed pilots, ship capsizing etc, the
safety issues have come to the limelight. Rather than get inured/cynical about the lack of safety, I
thought it would be apt to take a holistic picture of this, and connect the dots.
Policy is often used in two differentways, broad policy statements by government agencies or
officials or specific actions without an explicit rationale. Examples of the former are statements of
intent/desire as expressed in RFD documents, reports, budget speeches, annual reports or Planning
Commission policy documents. But these do not translate into action always. The Executive needs
to implement the legislative intent via specific concrete actions, to influence actions of economic
actors. Given the disparate range of options to act, it is difficult to read the policy tea leaves and
predict the exact change which comes next. For instance, the same policy can be effected by
programs for investment (e.g., direct spending, grants, and credits), taxes and fees of all kinds, rules
and regulations that directly constrain behavior, and legal action by governments. Examples of each
are subsidy for bus replacement, road tax, helmet purchase regulation and lawsuits for hazardous
transport spillages.
Government decisions to adopt such measuresthe real policy decisionsare the policies of
interest here, because, one way or another, such decisions either directly affect behavior of various
entities relating to freight carriage or change in some way the environment in which actors in the
freight system operate and make decisions. Moores law says that if anything can go wrong, it will.
Given the relatively uncoordinated transport policy execution, the doctrine of unexpected
consequences does play a major role in outcomes.
If this paper can help anticipate those outcomes and reduce policy conflicts, I would consider this a
job well done.
Safety can be broadly defined, so for this paper, I define safety not only to mean protection from
physical injury(accidents, collisions) but also safety from pollution(air pollution, noise pollution,
toxic effluent spillage) and from crime(groping, dacoits). Some of these would seem trivial but are in
fact a vital component of safety in the modern aspect. As this research paper will show, rights which
we routinely take for granted in the work place and at home, are often not available when we travel.
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Basic FrameworkProf Raghuram breaks the sector into 3 parts for analytical purposes-rolling stock, terminals and
right of way. I propose to do the same, for the purpose of analyzing their safety issues and offering
constructive solutions.
What Road-freight Road
passenger
Rail Air Maritime
Terminals Informal
sector only!
Few
Passenger
amenities
NIL Bird-plane
crash/slums
Coastline vast,
poor security
Right of way Dacoits, theft,
murders
Emergency
facilities
Tracks
quality
Navigating
equipment
Pirates, cross
border tussles
Rolling
Stock
Overloading,
Old, tax
Over
speeding,
Overloading
Old design,
collisions
Maintenance
, flying hours
Flag of
convenience,
limited liability
Policy
induced
Distortions
Cheap diesel,
excise duty
Public
transport
treated badly.
Freight over
charged
MRO hub
not
incentivized
No incentives to
scrap old ships
Safety
Regulator
State Govt State
Transport
itself
RDSO
reporting to
MOCA
DGCA Ministry of
Shipping
Compulsory
Insurance
No Third party No Yes( industry
Norms)
Yes(as per
industry norms)
Ad-hoc from
State
None State Govt at
times
Railway
Ministry
Central Govt None
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Rocking the baby and pinching the cradleIndia has excellent policy makers, who sometimes work at cross purposes, and negate each others
contributions. For instance, the environmental ministry would love wider public transport adoption,
but the Finance Ministry(till recently) used to have higher excise duty on those vehicles thus making
it costlier. Also, while it is widely recognized that clean fuels like CNG should be used over diesel,
the polluting fuel diesel is heavily subsidized while natural gas/commercial LPG are not.
TerminalsWhether it be the unguarded railway stations, bird hit/terror strike prone airports, theft prone ports
or crowded bus terminals prone to stampedes; there is no uniform policy relating to safety and
security of public transport terminals. These have certain unique features of being herd prone,
crowded, needing automated O&M(for fast turnabout times), open access affordable amenities etc.
If neglected, it could spark off mishaps and issues. Hence, there is need for a policy detailing the
minimum rights/amenities/security at these terminals . Land encroachment around the terminals
is an economic and security issue, so that needs to be dealt with this lens also.
Right of WayBollywood has popularized (romanticized?) the dacoits robbing buses, trains and trucks. Merchant
Shipping in recent times has suffered attacks from Somalian and Malaccan pirates. The rising metal
prices has prompted some to dig up manhole covers/ rail tracks/equipment and sell them for a quick
buck, thus endangering the lives of those who travel on them. While the solution for this needs law
and order, some unconventional solutions like using cheaper but durable metal substitutes, frequent
inspections OR automatic sensors to detect sabotage are options. The Railway Minister in her
budget speech announced 2 special trains/year for those states who managed to ensure trouble free
operation of trains in their areas. About the piracy menace, the shipping ministry recently issued
guidelines on armed guards on Indian merchant ships. Given the vast range of issues, the policy
response seems destined to be fragmented.
Rolling StockHere, there are a laundry list of issues right from overloading(railway freight, buses, 2 wheelers,
ships, trucks), inefficient old vehicles(trucks, buses, ships), few mandatory safety devices
needed( cars, buses), driver fatigue(bus, trucks, cars) and underinsurance of rolling stock(third
party insurance scope limited for motor vehicles, ships registered under SPVs under flags of
convenience to limit their liability as Exxon Valdex spill showed). While there are significant
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initiatives to tackle these issues individually, there is little collective action on this front. Given the
magnitude of the issue, size of players affected(Insurance Sector/Auto
Industry/Unions/Govt/Commuters), one needs a national level debate and consensus(aka GST
committee) on what exactly are the acceptable standards in each case. It is too important to be left
to the realm of academic debate.
Policy induced DistortionsIn our Carbon Finance class, a professor remarked that virtually every Indian subsidy is
environmentally unfriendly. While I do not intend to make such sweeping generalizations in the
context of safety, it is true that well intended policies have unintended effects. For example, the FDI
policy did not allow foreign aviation players to have majority stake/control in aviation infrastructure.
Hence, MRO Hub was not set up in India and the airlines need to overhaul their planes in
Singapore/Dubai which increase the cost and downtime. This would incentivize them to delay the
overhaul, which is easier given the manpower shortage at the DGCA. Another example is the
stepmotherly treatment given to public transport-we invest more in flyovers than on public
transport. Even simple things like dedicated lanes, priority access etc are not done thus turning more
people towards private transport. And the cheap auto credit loans(till recently) spurs on more light
vehicles/2 wheelers, that are more accident prone. The lax monitoring of truck overloading not only
increases the risk of the truck collapsing, but also causes higher wear and tear on the highways. And
though it is known that old ships are carbon/energy inefficient, they are still allowed to ply without
withdrawing the tax benefits accruing to the shipping industry.
Safety RegulatorWith the exception of road transport(a State subject), Central agencies/independent regulators
oversee safety for other modes of transport. But like other Govt bodies, they are understaffed
where it counts the most-in field inspectors/staff. Because of that, unsafe buses/trucks ply for
decades, ships are refurbished and put the lives of their crew at risk, and near miss aviation
accidents are increasing. Like how SEBI/IRDA have done, it may be better to levy a cess on the
industry to fund the cost of regulation, research and monitoring. This transparent funding will also
lead to more open debate on the cost benefit analysis of regulation.
Compulsory InsuranceAt first glance, it may seem absurd. How can insurance have anything to do with changing safety risk?
The answer lies in moral hazard. Once there is compulsory third party insurance(airlines, shipping,
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cars), there is less incentive to drive safely, as postulated by microeconomic theory. This holds
especially for old vehicles where the salvage value is quite low, and that may even lead to not having
insurance because then the owner will be willing to jettison the accident spot and take his chances
with the law. Maybe, some prepaid insurance should be taken for 5yrs+,to reduce this risk.
Ad-hoc compensation norms non punitiveAll animals are equal but some animals are more equal than others. This Orwellian edict applies
even while compensation norms for the dead are fixed. Air>Sea>Road>Rail is the usual pecking order
wherever the Govt compensates for loss of life due to terror attacks OR its own rail/road services.
There should be consistency in this approach, since the non air passengers should not be treated as
children of a lesser god. And the private sector road/inland water way transporters should be made
to take insurance/bear the ad hoc compensation so that they pay more attention to safety. To
ensure this, piercing the corporate veil OR encouraging consolidation within the sector to create
deep pockets are both options.
Sexual harassmentThe landmark Supreme Court ruling in the Vishaka case did reduce sexual harassment at the
workplace/college, but did nothing for the situation in public transport. Women fear to ride Delhi
buses in the fear of being groped/molested. Mumbai has reduced this problem by introducing
special ladies compartments in trains and reserved seating/special buses in BEST. But this
segregation is not a sustainable issue when more women step outside the four walls. Instead,
gender sensitization and severe immediate penalties are necessary to curb this menace. Public
sentiment has a large role to play in this. If women are generally respected/less objectified, then
public transport would be safer for them.
Private transport is not much better, with rapes & murders of female BPO employees in
Pune/Bangalore by their night shift drivers. That prodded the industry to take safety measures like
dropping schedules, background checks, security guard etc. But not all can afford it, nor has the
impact outlasted these incidents. One therefore needs a policy covering this aspect for both public
and private transport. And like how daylight rapes in tinted cars prompted the RTO ban on tinted
windows in cars, it seems ghastly incidents/popular outrage will be necessary to force regulation.
Good Samaritarian Laws
Indian law does not cast an explicit duty on the public to aid accident victims. Only recently did the
Supreme Court order that no medical practioner/hospital could refuse to treat accident victims. But
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to bring the victims to hospitals, the public cooperation is needed. Due to fear of intrusive police
questioning, most people hesitate to lend a helping hand. In this regard, Circular No
No. 16518-70/AP III dt 20Nov1987 issued by Delhi
Police(http://morth.nic.in/index2.asp?langid=2&sublinkid=119) is quite instructive. The circular
instructs that the police personnel on duty either in police stations or in the hospital should politely
put the following questions to the person who brings the injured to the hospital.
(i) Where have you brought this person?
(ii) Do you know anything about the case of the injury of the person?
(iii) May I have your particulars?
The circular envisages that the person would answer the first question, may not have an answer for
the second and hesitate to reply the third in which case it should not be insisted upon. The escorters
should, under no circumstances, be detained in the hospital for interrogation. On the other hand, he
should be treated with courtesy.
Also, provision for reimbursement is made in that circular which states that the local police should
pay the transportation expenses to the public man who brings the victims to the hospital his given
address in accordance with Delhi Administrations letter No. F.1/6/82-AC, dated 29.7.87, which
empowers the Head of Office to reimburse the hire charges of vehicles up to Rs. 100/- in each
case. This will well help in acquiring public help to save the human life.
Sadly, such laws are missing in other parts of India, and are necessary to ensure that more members
of the public help those in need. For this , education at the school level would be useful too.
Creative TrainingThe conventional driving license tests/procedures can be easily gamed(both by coaching and bribing
RTO inspector). Instead, engaging the first time driver/renewals with games/multimedia would be a
good idea. In this regard, the Ministry of Road Transport and Highways has published 2 games
downloadable from its website(http://morth.nic.in/index2.asp?langid=2&sublinkid=171). Also, the
ad spots(both radio and AV) are downloadable from the site. It is suggested to leverage the
Like/Share icon on Facebook to popularize these games through viral publicity.
Efficiency linked grant disbursal delays essential expenditure
It is said that sanctions affect mainly the children and elderly people, who cannot fend forthemselves in other ways. Similarly, the target based disbursement of funds when followed by the
http://morth.nic.in/index2.asp?langid=2&sublinkid=119http://morth.nic.in/index2.asp?langid=2&sublinkid=119http://morth.nic.in/index2.asp?langid=2&sublinkid=119http://morth.nic.in/index2.asp?langid=2&sublinkid=171http://morth.nic.in/index2.asp?langid=2&sublinkid=171http://morth.nic.in/index2.asp?langid=2&sublinkid=171http://morth.nic.in/index2.asp?langid=2&sublinkid=171http://morth.nic.in/index2.asp?langid=2&sublinkid=1198/3/2019 Does Indian law/regulatory incentivize transport safety?
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Planning Commission may lead to undermining essential expenditure. For instance, the Ninth Five-
Year Plan said that funds for fleet replacement would be made available only if the State
government was able to commit a similar amount for this purpose and the state transport
corporations were financially viable. Since this was not done, the result of this policy was the
withdrawal of capital contribution to the public transport sector in urban areas. Consequently, fleet
replacement and augmentation has suffered leading to a decrease in the penetration of public
transport.
Measuring the wrong thingsSubsidized fuel, cheap credit and rising aspirations lead to the proliferation of personal vehicles on
the roads. The multi vehicle mix on the road is not conducive towards road safety
Similarly, an emphasis on the efficiency on transport networks has resulted in an increase it
expenditure on improving the road infrastructure for motorized transport at the expense of non-
motorized modes.
Personal Vehicle pollution not tracked enough
Sadly, many people prefer to bribe and get a PUC than run the risk of having to pay fines/incur capex
to set right their vehicle.
While there has been substantial progress in improving emission characteristics of vehicles in India it
is well recognized that current vehicle technology in India is inferior to that in the developed world,
especially for heavy-duty diesel vehicles. Diesel vehicles do not have particle traps to reduce the
emissions of particulate matter. Buses are built on a truck chassis and designed for speeds that are
possible only on highways and not within the city. The largest segment of the vehicular fleet, namely
two-wheelers, mostly uses the highly polluting two-stroke engine.
Petroleum fuels sold in India have less stringent specifications compared to those sold in other parts
of the world. For example, the sulphur content in diesel here is higher than that sold elsewhere in
the developed world. Some recent developments have seen a tightening of the fuel quality
standards, particularly for Delhi. However, other cities in the country are yet to follow suit and policy
directions would be necessary if the same standards as those applicable to Delhi are also to apply to
other urban centres. Here again, the constraint in the financial resources to build the required
capability in the refineries.
The turnover rate of vehicles in India is low and the progressively stricter mass emission norms for
new vehicles will have only a limited impact. It is, therefore, necessary that policy initiatives apply
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to in-use vehicles as well. So far, these initiatives have been directed largely at commercial vehicles,
by not allowing those of a certain vintage to operate in the city roads or requiring them for use with
cleaner alternative fuels. The strategies for making in-usevehicles less polluting would revolve
around mandating stricter emission standards coupled with a requirement for periodic
certification. While we do have the PUC system in place before fuel is sold at certain pumps, that
system is full of holes and is becoming a joke, so there is a case for stricter laws.
Heavy Vehicle Diversion due to tollsIn the USA, research shows that when confronted with toll, heavy vehicles tend to divert to the non
toll route since those owner-drivers value the fuel savings more than time saved. This imposes a
negative externality on the users of those non toll roads, because the diverted vehicles try to make
up time by over speeding/rash driving, thus hampering safety. Anecdotal evidence of this is visible
on the NH adjoining to the Mumbai-Pune expressway. While the modern way out is to give both
roads to the same PPP for tolling, this can invite opposition from the truck lobby which would
(rightly) not need any rationale to toll the existing roads. Maybe an all India toll pass allowing X
number of trips across all toll booths, may do the trick given that monthly pass is of little use for
long distance truck drivers. This will pose revenue allocation issues but is doable.
Inconsistent safety norms for seat belts/helmetsSection 129 of Motor Vehicles Act, 1988 makes it compulsory on the part of all two-wheeler riders
and pillion riders to wear a protective head gear conforming to relevant Indian standards. The law
however makes certain exceptions for persons who can not use helmets on account of the religious
reason of having to wear turbans. The law also empowers State Governments to exempt certain
categories of two-wheeler users by notification in their official gazettes. The judicial proclamations
on the issue have consistently supported use of helmets. Recently the Central Government has also
mandated sale of a helmet conforming to Bureau of Indian Standards (BIS) along with the first-time
sale of a two-wheeler. It has not been possible on the part of police authorities in the States to fully
enforce the provision on wearing of helmets on account of lack of adequate personnel and stiff
resistance by the community of two-wheeler riders. The Central Government has been launching
awareness campaigns on the issue Only recently did the Govt insist that all two wheelers should be
compulsorily sold with helmets. This measure was long overdue because people take a weird pride
in driving without helmets, as if it enhances their masculinity. Similarly, rear searbelts are not yet
mandatory, and even using seatbelts in the front seats is not compulsory in all states/areas.
Education and awareness campaigns are must, besides a Central push for the same. Perhaps,
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compulsory bundling/seat belt provisions/insurance credits are necessary to universalize this
practice. Also, the sight of an entire family on a 2 wheeler moved Ratan Tata enough to design the
Nano, but sadly child restraint devices are not compulsory in India yet.
Safety not mandatorily engineered in during State level projectsRoad safety specifications / designs are incorporated in the planning and execution of NHAI. Design
of highways is done by reputed consultants meeting all relevant geometric and safety standards
which include provisions for flyovers, grade separators, by-passes, Railway Over/Under Bridges,
bus/truck lay-byes, service roads, junction improvements, overhead signs, cautionary /regulatory/
informatory retro-reflective sign boards, crash barriers, median railings, thermoplastic road markings,
traffic lights and delineators, etc. However, this high tech practice is restricted to National Highways,
and it is not compulsory during State level projects which generally do not explicitly factor in safety
during the planning process. This is one drawback of decentralization at State level.
Encroachment of footpaths-vendors v/s pedestrians and residentsNational Urban Transport Policy, 2006 states that encroachment of footpaths affects pedestrian
safety adversely and requires strict enforcement coupled with public participation. The ground
reality is far different. The encroacher typically have political backing, and(in case of hawkers)
sometimes have residents support also. In the court battles, the pedestrian safety issues is an oft
ignored factor, and the issue is instead presented as a Resident v/s Hawker issue without
incorporating the voice of the pedestrian. It is essential to factor this in.
Mere Supply Side attemptsWhen faced with a problem of congestions, accidents etc, the Govt throws more resources at the
issue by funding expansion of infrastructure, mandating supply side safety devices etc. Rarely are
demand side measures attempted like insurance deductibles, time of day analysis, shifting transportuse patterns via subsidies etc. The demand side management to reduce overload is must, because
there is a point till which one can raise supply to match the ephemeral demand.
Aligning Contractual IncentivesThis is one thing which the Govt has done right. In the earlier EPC regime, the construction work was
separated from the O&M work, thus inviting a blame game where corners were cut on safety. In the
new BOT/BOOT/DBFOT contract regime, the private party needs to maintain the road during the
concession period, adhering to certain minimum SLAs. Owing to the repeat nature of game, and
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having to eat its own pudding, the PPP has the incentive to engineer quality into the picture to
minimize its life cycle costs. Of course, this depends on the quality of monitoring. For example, the
Mumbai flyovers O&M responsibility was given to the toll agency with the tolling rights for the city.
But thanks to lax monitoring, those stretches are filled with potholes. Thanks to the NHAI and NGO
supervision, such incidents are rare in the NHDP program.
Refresher Training to commercial vehicle driversResearch attributes 72%+ accidents to driver error. For heavy commercial vehicles(trucks), the
accident causes are often simple things like fatigue, poor O&M etc. To reduce preventable accidents,
the Ministry of Road transport aims(as per RFD 2011-12) to train 80000 HMV drivers. That program
is unique as it is not only free but also compensates the drivers for their opportunity loss of earnings
during that 2 day program. In addition to this, other private sector organizations like Shriram
Transport Finance(via its NGO), Volvo(for purchasers employees) are engaged in this. Perhaps, on
the lines of vocational training subsidy, it is time to give subsidy for this also, given that otherwise
the experienced truck drivers would not willingly pay for such training, nor can they be compelled
to given the strong truck lobby.
Parking Space Policy
A builder needs to get umpteen number of clearances/permits/approvals but at present, he is not
required to ensure adequate number of parking spots in the building. Also, there is no incentive to
build multi storey public parking places as present in other parts of the globe. This leads to
encroachment on public spaces(roads) and resultant fines, towing away and time waste. This all
would be avoided if the number of vehicles were limited by issue of permits. But that being
infeasible in the Indian context, one would need a stricter policy on illegal parking on
roads(especially by commercial vehicles) that constricts the road size and increases the probability of
collisions and accidents. Of course, the issue of individual illegal parking is often seen as a David v
Goliath issue, but the issue of increasing parking space is one for the Govt, builders, commercial
space owners and automobile companies to consider. If parking space is explicitly recognized as
constrained, then manufacturers and customers will prefer easier to park/smaller cars.
ConclusionThis paper may seem a mosaic of unrelated content, but aims to drive home the point that without
an uniform and consistent policy framework, measures will often neutralize each other. To minimize
these coordination issues and unexpected consequences, NGOs/academics have a role.