The Role of Road Transport

Transcription

1 THE ECONOMIC WEEKLY ROAD transport in India has been subject to restrictive control ever since 1939 when the Motor Vehicles Act was brought into the statute book at the instance of the railways. The immediate provocation was provided by the fall in railway revenues during the years of the great depression, which had been accentuated by the emergence of competition from road transport on a significant scale. The railway authorities brought pressure on the Government to take necessary action to prevent the growth of transport supply during a period of falling demand for transport, The Motor Vehicles Act was the result, but it came into force at a time when the circumstances which had provided the justification for some of its provisions had already changed radically, and an acute bottleneck had developed in transport. Yet, restrictive as the Act itself was, it was operated in a spirit of restrictionism that went much further than the letter of the law. Transport Bottleneck During the Second World War, development of road transport was naturally hampered by the nonavailability of motor vehicles and spare parts. At the end of the war, in 1945, though a transport shortage continued to exist in the country, the Government of India issued a Code of Principles and Practice which throttled further development of road transport. At the same time, the burden of taxation on road transport became increasingly heavy and there was considerable harrassment of operators by the road transport authorities in many States. All this continued even after the achievement of independence and the commencement of the First Five Year Plan, though throughout this period a more or less acute bottleneck was the normal feature of the transport situation. As a result of persistent efforts by, road transport interests, the question of transport policy was brought to the forefront when the Second Five Year Plan was being framed. The volume of investment resources demanded by the railways to enable them to carry the traffic likely to arise as a result of the implementation of the Plan waa so large The Role of Road Transport Hannan Ezekiel that it was impossible to make this available without crippling the Plan itself. The railway plan was pruned; even so a substantial volume of resources had to be allocated to the railways. Road operators insisted that with a much smaller investment they would be able to play a very important role in carrying the country's goods, and that in any case the restrictions imposed on road transport operators should be relaxed to enable them to make full use of their existing capacity in the wider interests of the nation. Administrative Defect' The development of an automobile industry within the country added new force to these arguments and the Motor Vehicles Act was amended in 1956 with a view to relaxing some of the restrictions that had been preventing the healthy development of road transport. While the road transport industry appeared to have received a powerful fillip from the new provisions of the Act, and it was apparent that a substantial volume of traffic was moving by road over fairly long distances, road transport operators complained that there was little real improvement in the circumstances in which they had to operate. In particular, they argued that the administrative mechanism for the implementation of the Act suffered from a number of grave defects which needed an early remedy if the country was to benefit from the healthy development of road transport. It was against this background that the Road Transport Reorganisation Committee was set up under the chairmanship of Shri M R Masani. "It is felt," said the resolution setting up the Committee, "that the existing administrative set-up in most States is concerned more with the regulation of motor transport rather than its planned development." The Committee was, therefore, set up "to conduct a comprehensive inquiry and make *Report of the Road Transport Reorganisation Committee (Chairman: M R Masani). Ministry of Transport & Communications (Department of Transport), Government of India, New Delhi, May 16, 1959 recommendations for the reorganisation of the transport administrative set-up in the States." Road-Rail Co-ordination The report' of the Committee, which was submitted to the Government of India towards the end of March and has been recently published, is a comprehensive document examining the entire problem of road transport development in the country and making recommendations for the rapid and healthy development of road transport as an important part of the country's transport system. In discussing this question, the Committee has covered the problems arising in connection with what is called road-rail co-ordination and has attempted to lay down general principles for a sound transport policy for the whole country. Whether these questions fall within the purview of the Committee's terms of reference has been disputed by the railways representative on the Committee. Shri S R Kalyanaraman, who has submitted a note of dissent to the' Committee's report. On this question, there can certainly be two opinions, as it might be felt by some and it was evidently felt by the members of the Committee that it would be impossible to suggest a model administrative set-up without being clear about what the functions of such an administration should be and what principles it should follow in carrying on the administration. An administration, whose basic objective would be to control road transport in order to ensure that it provided little or no competition to the railways would have obviously to be organised along different lines from one whose basic objective would be to plan and foster the development of road transport. Model Administrative Set-up The Committee could take its cue with regard to the main purpose of the administration in this connection from the resolution of the Government of India, which in setting up the Committee pointed out that "it is essential that there should be suitable machinery in the States to look after the various problems facing the industry and to

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3 THE ECONOMIC WEEKLY plan and foster its development." The Committee probably felt that It was necessary to spell out the implications of this statement, which it could not possibly do without Impinging on the question of rail-road co-ordination. Shri Kalyanaraman has argued that the Committee having been asked only to suggest a model administrative setup which would ensure the elimination of inhibitory factors in the way of the development of motor transport, It was not thereby entitled to examine the several inhibitory factors and make recommendations as to how they could be eliminated. Whichever of these two views about the scope of the Committee's terms of reference may be valid, there can be no question about the importance of the questions in fact dealt with by the Committee and of the need for their discussion at the highest level. It has been suggested that a separate committee should be appointed to examine the whole question anew and recommend a transport policy for the country. If such a committee is appointed, the discussion of some of the questions by the Masani Committee will certainly be helpful to that committee and the views expressed by it will have to be taken into consideration. The views of the Masani Committee need, therefore, to be carefully examined. Basic Disagreement Though the recommendations of the Masani Committee cover passenger transport and private freight carriers in addition to public freight carriers; it is the public carriers which are really important from the view of overall transport policy. It is to this aspect of the matter that the present discussion will, therefore, be restricted. Shri Kalyanaraman has supported only those recommendations which relate strictly to the question of road transport administration. It is hot clear, however, whether he is really opposed to all the other recommendations, which he specifically rejects for the purposes of the present report. The question is, whether, if he had found no quarrel with the Committee with regard to its interpretation of its terms of reference or if the terms of reference had explicitly supported the Committee's Interpretation, Shri Kalyanaraman would have rejected all the other recommendations of the Committee or only some of them. On looking carefully through the report of the Committee, one cannot help feeling that Shri Kalyanaraman's basic disagreement could have been only with the recommendatidris contained in the chapter on "Licensing Policy". The recommendations of the Committee other than those relating directly to motor transport administration can really be divided into two groups. The first covers the Inhibitory factors and recommendations for their elimination, while the second covers licensing policy. Permissible Load Too Low The Committee has recommended first that a larger provision should be made for road construction with improved surface and width necessary to cope with modern vehicles including trailers. It has recommended that particularly high priority should be given to the allocation of foreign exchange for buying high tensile steel required to construct about 116 major bridges, the absence of which is holding up through traffic on our National Highways, Interim arrangements like providing suitable diversions, allowing the use of railway bridges, ferrying motor vehicles in railway cars and providing ferries have also been recommended pending the construction or strengthening of bridges and culverts. The Committee has also asserted that the limits with regard to laden weights imposed on vehicles are at present too low and that the question should be subjected to a fresh examination at the technical level. For National Highways, it has recommended a uniform limit of 12 tons on two axles and has also insisted that the system of prescribing safe axle loads should be generally adopted. The use of trailers and semi-trailers has been generally supported and special tax concessions and preferences for government contracts have been recommended for multiple unit vehicles. The recommendations with regard to supply of vehicles and spare parts, taxation, the recent adoption of measures to restrict consumption of diesel oil, and reciprocal tax arrangements between States, are along the familiar lines advocated by road transport interests. Unless the railway authorities feel that quite apart from the licensing policy followed, the elimination of such inhibitory factors in the field of road transport should be prevented in order to reduce the competitive strength of motor vehi 665 May 16, 1959 cle operators, there would appear to be no justification for opposition to the recommendations of the Committee on these subjects. What Is a Viable Enterprise? The recommendations of the Committee with regard to viable units probably require more careful examination. There can, of course, be no objection whatsoever to the recommendation of the Committee that while the formation of efficient enterprises should be encouraged in all reasonable and legitimate ways, no ban should be placed on the owner of the single truck in the case of goods transport. The ownership of a single truck is all that is possible to many of the present operators in the industry and it is probably the best way of entering the industry for the first time and acquiring the necessary experience with regard to the ownership and management of a freight transport organisation. The single truck owners also provide a certain amount of flexibility to the industry and maintain that competitiveness within the industry which is so essential If the user is to obtain a decent deal. Besides, no study has ever been made of the economics of the freight motor transport Industry with a view to finding out whether or not the single motor vehicle owner can play a useful role in the industry. The Committee has gone on, however, to recommend that while there should be no ban on the single vehicle owner for intra-state operation, the unit for State-wide operation should consist of a minimum of five vehicles and for inter-state operation of ten vehicles. What is the basis for this recommendation? "Such limits are considered by the Committee," says the report, "not to be against the Interests of the small man or to discriminate against him, because they only correlate facilities made available to the capacity of the unit to provide efficient service." Unfortunately, though five and ten are very convenient round numbers, and it may well be that firms owning these, numbers of vehicles do have certain peculiar advantages in the provision of efficient service, there is really no evidence to that effect at all. In fact, there is so far not even any evidence that an Increase in the scale of operation results in any improvement of effficiency in this industry. Most of the advantages that are supposed to

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5 THE ECONOMIC WEEKLY follow from the possession of a number of vehicles by a single firm may, for instance, result from the development of an organised system of booking and forwarding agents having relations with units possessing only a few vehicles each. Investigation Necessary The following figures obtained by me in connection with a small survey of freight motor transport operators in the Bombay region are interesting in this connection. Of the 4,701 firms with currently valid permits, 4,133 were single vehicle owners, 498 had two to four vehicles, 46 had five to nine vehicles and only 24 firms had ten or more vehicles. These figures are exclusive of the Bombay State Road Transport Corporation, which had 190 freight vehicles registered as public carriers with the Regional Transport Authority in Bombay. The maximum number of vehicles owned by any private firm was 40. It may be of course that the same firms had vehicles registered in other regions, so that the total numbers of vehicles owned by them are different from those shown by the above figures. This is the sort of question, however, which requires to be Investigated before any decision on it is reached. With regard to its recommendation on this subject, the report points out that "such a scheme will in the Committee's view also provide a strong incentive towards the formation of efficient and viable enterprises." What exactly is a viable enterprise in this field is not really known today and must be the subject of Investigation. Nationalisation The Committee has then gone~on to make recommendations with regard to provision of credit facilities for motor vehicle operators. On the question of nationalisation of road transport, it has recommended that nationalisation should be resorted to only if such a step is necessary in the opinion of the State Government for providing efficient, adequate, economic and properly coordinated services. It has also recommended that where it is decided upon, nationalisation should be carried out according to a phased programme. With regard to freight transport, it has recommended that the existing moratorium on nationalisation should be extended for a period of at least ten years from the end of the Third Five Year Plan. Here, perhaps, it could have gone further to recommend on principle that while nationalisation of passenger transport might be considered, nationalisation of goods transport should generally be eschewed altogether. Licensing Policy The main controversy between the railway representative on the Committee and the other members relates to the recommendations regarding the licensing policy that should be followed for road transport. The view of the Committee that road transport will inevitably play a greater role in India than at any time in the past and will have to be developed on a large scale has determined its recommendations on this question. According to the Committee, "any attempt to cling to railways would be to do grave injury to the interest of the country/' Looking at it from another point of view, the Committee has held that the task of the planner in a democratic society is to balance the free choice of the consumer with the needs of the maximum utilisation of resources invested in various forms of transport. The Committee has also come to the conclusion that the average cost of carriage is not less on the railways than on the roads. On the basis of these conclusions, the Committee has recommended that "within the estimated' overall capacity of the State, the issue of intra-state public carriers' permits should be free and unrestricted subject to the allocation of a certain number of permits to each region in order to ensure all-sided development." The Committee has also recommended that "Permits for inter-state transport of goods should be issued following a liberal policy somewhat on the system prevailing in the USA, where the governing factor is public convenience and necessity, to meet all felt needs." These are the conclusions and recommendations to which the railways have taken objection. The railways' case has been carefully set out by Shri Kalyanaraman. Clearly, however, the questions raised are of fundamental importance and relate to the basic problem of the appropriate transport policy to be followed under a planned economy. These questions require to be separately examined. 667 May 16, 1959 Largest Lime Kiln THE largest lime kiln in India, rated to burn 450 tons of limestone per day, was blown-in at Tata Chemical works, Mithapur on May 10. The putting into commission of the second lime kiln completes the first major step in the expansion programme of the Company which will lead to higher production of soda ash from the next year. The kiln, designed and engineered entirely by Indian engineers of Tata Chemicals, and over 95 per cent of which was fabricated in India, cost half of what an imported kiln of a similar type would have cost.

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