• The Lok Sabha passed the Motor Vehicles (Amendment) Bill, 2016. The Bill was introduced on April 7 in the Lok Sabha. The Bill amends the Motor Vehicles Act, 1988 to address issues such as third party insurance, regulation of taxi aggregators, and road safety.
• 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 Rs 5 lakh 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.

What is the Bill all about?

• Motor Vehicles (Amendment) Bill authorises the government to exempt or waive off any section to promote innovation. The provisions of the Bill talk about improved citizen centric services, reducing the number of accidents and several steps proposed to reduce the footfalls to regional transport offices (RTO).
• The bill proposes hefty penalties for various traffic offences, three-year jail term for parents of minors caught driving and causing fatal accidents, and a ten-fold increase in compensation for the families of accident victims, among other things.

Highlights of the Bill

Thee bill address issues such as third party insurance, regulation of taxi aggregators, and road safety. Here are the other highlights of the bill:

1. According to a report of PRS India Legislative, 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.  

2. 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.

3. The Bill defines taxi aggregators, guidelines for which will be determined by the central government.

4. 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.

5. Improving delivery of services to the stakeholders using e-Governance is one of the major focuses of this Bill. This include enabling online learning licenses, increasing validity period for driving licenses, doing away with the requirements of educational qualifications for transport licenses are some of the features.

6. 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.

7. 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.

 8. 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.

Background

The changes in the Motor Vehicles (Amendment) Bill, 2016, were approved by the Union cabinet on March 31.

Source: Business Standard