Right Taxation For Old Vehicles Mooted In 10th Plan

The 10 Plan may see progressive taxation of older vehicles as part of the rationalisation of road transport sector in the country.

The draft approach paper, to be approved by the full meeting of the commission headed by the prime minister this week, has also recommended better utilisation of existing investment in roads besides a control of encroachments and unplanned ribbon development along highways.

It has also said "particular emphasis needs to be given on removing all unnecessary policy and procedural hindrances to greater private participation in road transport operations, particularly in rural areas, without compromising on road safety considerations".

The paper has endorsed the long-standing demand of experts for rationalisation of road taxes to ensure a progressive phase out of older vehicles.

This will entail an overhaul of the taxation regime from the present scenario of one-time payment of road taxes to a multi-stage taxation scheme, whereby vehicles will have to pay higher taxes as the get older, copying the system of developed countries. This would make it unviable for old and inefficient vehicles to continue operating on the country's roads.

As a step towards providing sops to efficient carriers, the minister for road transport and highways B C Khanduri had recently asked state governments to grant tax concessions to multi-axle commercial vehicles, as they can carry more load while ensuring a lower scale of damage to roads.

The existing deficiencies in the road network should also receive higher priority than the extension of the network itself, the paper has said.

"In the longer run, it may be necessary to plan and take preliminary action for expressways to be built in future on those sections where they can be commercially justified," it has added.

About the ambitious prime minister's Gram Sadak Yojana, the paper says substantially enhanced rural road accessibility should be achieved in the 10th Plan by linking up all villages with all-weather roads. But it adds that these roads should definitely link public health centers, schools, market centers, backward areas, tribal areas and areas of economic importance in the rural areas.

In case of ports, the approach paper has said, "Functioning of major ports under various port trusts is characterised by operational inflexibility partly due to the structure of the decision-making process and partly due to outdated labour practices. This introduces delays in shipments and additional costs all of which makes our exports uncompetitive."

It has called for radical reforms in this area including corporatisation of the major ports within a short period of time and induction of private investors in port development.

Productivity improvement at major ports will be another important thrust area in the 10th Plan, the paper has said. Through productivity improvement, it is expected, a capacity equivalent of 11 million tonne to 15 MT could be added during the Plan.