Road accidents in India kill more people than some epidemics, but the Central and the State governments refuse to see it for what it is — a national crisis. The antiquated traffic management and transportation system resulted in 1,50,000 deaths and left more than half a million injured last year, affirming the country’s status as among the riskiest in the world for road users.
Significantly, the counts for deaths and injuries in accidents are viewed as less than accurate. The ‘Road Safety in India’ status report 2015 from the Indian Institute of Technology, Delhi, says injuries requiring hospitalisation are likely to be underestimated by a factor of four and for all injuries by a factor of 20.
For everyone undertaking a road journey, the risk of a fatal accident has been rising steadily: absolute fatalities in 2014 showed a 6 per cent average annual growth rate compared to 1970 figures. Data also show that more than half of those killed last year were in the productive age group of 15 to 34, pointing to a calamitous loss of young lives. This is a public health emergency that requires immediate action.
One of the most productive measures to bring down accidents is zero tolerance enforcement. Strong policing reduces the risk for vulnerable road users such as pedestrians and two-wheeler riders, who must be compelled to wear helmets.
In spite of fast-paced motorisation, India does not have a scientific accident investigation agency.
Nine years have passed since the Sundar Committee on Road Safety and Traffic Management recommended the creation of a safety board through legislation.
Under the archaic Motor Vehicles Act and the Indian Penal Code, the police adopt simplistic methods to determine ‘driver fault’, rather than look at composite factors including bad road design and failure of civic agencies to maintain infrastructure while fixing responsibility for accidents.
It is unlikely that the proposed National Road Safety and Traffic Management Board will lead to dramatic improvements, since it is envisaged only as an advisory body. Without empowered oversight, it is impossible to eliminate systemic corruption in transport departments in vehicle certification and licensing of drivers, and poor monitoring of roadworthiness of commercial vehicles.
The Centre should also act on the virtual monopoly held by automotive companies on the sale of spares and servicing of vehicles, which is raising cost of ownership and affecting quality of maintenance. Research suggests there will be an annual rise in fatalities until 2042, before a decline sets in. That distressing prognosis can be changed only through determined action today.
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Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.