I think this is an interesting article to read from the pov of us on the highways and roads in the city. I have recently had a run in with a truck and though I did not lose much, I think car drivers need to be aware of certian implications as pointed out in this article. This was taken from our B-School mailing group. The articel appeared in the Indian Express.
Highway loot
SUCHETA DALAL
Sucheta Dalal Anyone travelling on India’s highways cannot have missed the large number of trucks lying overturned or collapsed by the roadside, or slowing down traffic by crawling at under 20 kmph. In a majority of cases, this has three explanations — the truck is not road-worthy, is grossly overloaded or the driver is drunk. There are clear rules to prevent each of these violations, but they are all flouted for a price. A truck manufacturer who wants to remain unnamed conducted a private study to find out how much money changes hands to legalise overloading of trucks that endanger people’s lives. It came up with a whopping figure of Rs 2,000 crore paid annually to police officials across the country in order to condone overloading. To put it in perspective, this is equal to the entire Securities Transaction Tax (STT) that the finance minister will hope to collect in a raging bull market. The large-scale loot remains undetected because the money paid per truck is fairly low.
Ironically, instead of tackling this daily highway robbery, the finance minister was focussed on exempting precisely this group from service tax and surcharge. Was it because they were already taxed informally?
Loot matrix
Here is how the study arrived at its conclusions about the highway loot. India has about 30 lakh trucks plying on the roads everyday. A sample study of costs, with cooperation from trucking companies revealed that 90-95 per cent of them carry overloads of anywhere between 50-80 per cent. More interestingly, it found that large companies actually pushed truckers to overload vehicles.
Companies are well aware that the legal limit for a regular truckload is less than 40 tonnes. Yet they insist on overloading them in order to reduce costs. Competition induces greater overloading by transporters to bag large annual contracts. For instance, the study found that a steel company that transports one-lakh tonnes to Mumbai every month from the South actually demands a load factor of at least 60 tonnes against the legal limit of 35 tonnes to cut transport costs. The truckers then bribe police officials all the way to their destination to ensure clear passage. This is now a smooth and well-oiled system with pre-negotiated rates for each police checkpoint. The transport office also plays an important role in this loot by passing dilapidated trucks as road-worthy for a price. That is why key transport postings are ‘auctioned’ for huge prices.
Dangerous effects
The loot has even more dangerous consequences. Although all overloaded trucks that ply on Indian highways are insured, insurance companies would technically be well within their rights to deny payment. This starts another round of palm greasing to ensure that the police help to suppress true loads in order to claim insurance. The nexus between the police and truckers also has a macabre element because the police are generally pre-disposed to side with truckers when they are involved in accidents with private vehicles unless the victims invoke the right connections. Clearly, corporate India (including large public sector companies), which complains incessantly about bad infrastructure and corruption, needs to clean up its own house.
Once companies insist on the use of good quality trucks and no overloading, the loot will be dramatically reduced. The rest of the market is small, fragmented and cannot engender massive organised corruption.
http://www.indianexpress.com/full_st...ntent_id=80131
Edit: Changed formatting.