• August 6, 2018, 1:26 pm

To make roads safer, the Centre in consultation with State Transport Ministers came up with this Bill to amend the Motor Vehicles Act, 1988. The new bill focuses on penalising those who do not follow traffic rules and it can get worse as your license could be suspended. Under the Act, the liability of the third party insurer for motor vehicle accidents is unlimited. 

The Bill caps the maximum liability for third party insurance in case of a motor accident at Rs 10 lakh in case of death and at five lakh rupees in case of grievous injury. The Bill provides for a Motor Vehicle Accident Fund which would provide compulsory insurance cover to all road users in India for certain types of accidents. The Bill defines taxi aggregators, guidelines for which will be determined by the central government. The Bill also provides for: (i) amending the existing categories of driver licensing, (ii) recall of vehicles in case of defects, (iii) protection of good samaritans from any civil or criminal action, and (iv) increase of penalties for several offences under the 1988 Act.

Key Issues and Analysis

  • 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.
  • While the penalties for contravening provisions of the proposed scheme on interim relief to accident victims are specified in the Bill, the offences that would warrant such penalties have not been specified.  It may be argued that imposing penalties without knowing the nature of the offences is unreasonable.
  • The Bill does not address several issues around road safety that have been highlighted by other committees such as: (i) creating road safety agencies, and (ii) improving road design and engineering.


  • The year that the Motor Vehicles (Amendment) Bill was first introduced(2016), India saw 1.5 lakh deaths from road accidents, according to the ‘Road Accidents in India, 2016’ report by the Ministry of Road Transport and Highways. In 2017, when it was reintroduced, there had been a marginal decline in that number, but the loss of lives from road accidents remains high in the country.
  • State run services has not kept with pace the growing passenger transport sector. In the absence of last mile connectivity in urban metros, vested interest in this sector and lack of transparency and regulatory bottlenecks, this act which ensures transparency is a welcome one.
  • As this subject is in concurrent list, Parliament can make law for the subject. But the state governments concerned about the new provision, section 66A and 88A ,which will empower to form a national transportation policy through the process of consultation and not through concurrence.
  • The changes will also enable Centrally drafted schemes to be issued for national, multimodal and inter State movement of goods and passengers, for rural mobility and even last-mile connectivity. Since all this represents a new paradigm that would shake up the sector, several States have opposed the provisions as being anti-federal.
  • Care is needed to see that other measures such as sharply enhancing fines for rule violations, do not result in greater harassement. The effort to curb instituionalised corruption at RTO  by making it possible for dealers to directly register new vehicles,an enabling online application for driving license is a welcome one.
  • It is the certainity of enforcement ,zero tolerance and escalating penalities that will work. Setting up benchmark for states through this act , will create an equitable regulatory framework  for the growth of this sector. Enabling well run bus services across states with suitable permit charges is imperative to meet the needs of a growing economy.    Though there are new technology like CCTV cameras to improve road safety ,absence of professional accident investigation agency will not yield the desired results .
  • Models  from European union  ,where regulatory changes has fostered competition,reduced fares and increased services across the states shows the result of such changes in this transport sector.
  • Hence care to be taken that these are implemented in the right manner and produce the right results.

What’s New? :

Speeding   As per the new law, if you are caught speeding, your license could be suspended, and you will be liable to pay a minimum fine of Rs 1000. One must note, that the amount of fine could be higher depending on the vehicle’s speed.

Drunk Driving   This is one of the major offenses in India and those caught driving after consuming alcohol could be imposed a fine of Rs 10,000. In this scenario, the driving license can be permanently cancelled if you are ever caught again for the same offense.

No Racing on Public Roads  Racing with your friends on roads could get your license suspended too or you will at least get a warning for the offence.

No Triple Riding    We usually see people seating more than two people on their two-wheeler, but from now on, it is going to be cost you, your driving license and a fine of Rs2000. One must note that in this scenario, the driving license could be suspended for three months. 

Riding Without Helmet   While it is mandatory for both rider and pillion to use a helmet on a two-wheeler, some still don’t follow the rule. However, under the new reform riding without helmet will attract a fine of Rs 1000 followed by license suspension after three such offences.

Blocking Way of Ambulance and Other Emergency Vehicles   If you do not give way to ambulances or other emergency vehicles, it could cost you a hefty fine of Rs 10,000 and suspension of license on repeating the offence.

No Modified Cars/Bikes  This could be disappointing for the enthusiasts but driving a copiously modified car or a bike could attract a stern penalty. According to the new law, it could not only get the license cancelled, but can also get offender’s registration cancelled.

Jumping Signals   It is a serious problem in India and all this while it was not taken seriously, though under the new law, offender’s license will be cancelled after three repeat offences. 

Not Wearing Seatbelts   If you are caught not wearing seat belts, you will be fined Rs 1000 and after three incidents, the license will be suspended for six months.

No Talking on Phone    Those who ignore the law and continue their conversations while driving will also be penalized for the offence.

Source: The Hindu, PRS