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What is the Motor Vehicles Amendment Bill?

By Finserv MARKETS - Sep 4,2019
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What is the Motor Vehicles Amendment Bill?

On July 31, 2019, the Rajya Sabha passed the Motor Vehicles (Amendment) Bill with the objective to “provide an efficient, safe and corruption-free transport system in the country.” Given the fact that there’s one death every 4 minutes due to road accidents in India, it was high time that the amended bill focused on road safety more than anything else.

Will the Bill bring down increase road safety and reduce road fatalities? We have to wait and see the results. However, it’s a step in the right direction. Road accidents also put an enormous strain on the country’s finances. According to WHO, road traffic accidents cost most countries 3% of their GDP.

However, these costs can be brought down if more people start buying motor insurance. In a 2016 General Insurance Council of India report, it stated that 75% of vehicles plying on Indian roads are without motor insurance. It is an alarming trend given that 1.46 lakh road fatalities occur in India every year, which is the highest in the world.

Though mandatory 5-year third-party motor insurance has increased two wheeler insurance and four-wheeler insurance costs when you purchase a new vehicle, renewing motor insurance doesn’t cost that much. For instance, you can buy Bajaj Allianz motor insurance for your car on Finserv MARKETS for as low as Rs.3127 a year.

What is the Motor Vehicles Amendment Bill, 2019?

The Bill intends to radically change the 30-year old Motor Vehicle Act and is intended to meet the UN mandate to reduce road accidents by up to 50% by 2020. Apart from increasing road safety, there are several landmark legislations in the bill that are progressive and designed to improve the road and transport system in the country.

A cursory glance gives the impression that more authority has been given to traffic personnel. There is also marked increase in penalties for all types of traffic violations and up to a 10-fold increase for some violations. A welcome move is the protection of Good Samaritans from legal annoyances and a new penalty for not providing way for emergency vehicles such as ambulances. It will invite a stiff fine of Rs. 10,000. Though, the Bill doubles the fine for plying without four wheeler insurance or two-wheeler insurance from Rs. 1000 to Rs. 2000, stricter actions and bigger penalties were in order.

Overall Increase in Penalties

Traffic violation Before Now
Unauthorised use of vehicle without licence Rs. 1000 Rs. 5000
Driving without licence Rs. 500 Rs. 5000
Over speeding Rs. 400 Rs. 1000 (LMV)

Rs. 2000 (MPV)

Dangerous driving Rs. 1000 Up to Rs. 5000
Drunken driving Rs. 2000 Rs. 10,000
Not using seat belt Rs. 100 Rs. 1000
Overloading of 2-wheeler Rs. 100 Rs. 2000 plus suspension of licence for 3 months
Riding without helmet Rs. 100 Rs. 1000 and disqualification of licence for 3 months
Not providing way for emergency vehicles (New) Rs. 10,000
Driving without motor insurance Rs. 1,000 Rs. 2000

Source: Press Information Bureau

Important proposals and changes in the Bill

  • The Bill makes it mandatory for individuals to have Aadhar card for obtaining a driving licence and registration of vehicles.
  • In another welcome move, the government has increased the compensation to the victim’s family in hit-and-run cases from Rs. 25,000 to Rs. 2 lakh.
  • If a traffic violation is committed by a juvenile, the owner of the vehicle will be held liable. The registration of the vehicle will be cancelled and the juvenile tried under the Juvenile Justice Act.
  • People who come forward to help accident victims will be protected from civil or criminal liability and they can choose to not disclose their names and identity.
  • Talking on a mobile phone while driving will cost you Rs.5,000 now.
  • The government now has the power to recall vehicles with substandard parts, component and engine. Manufacturers may have to cough up fines up to the tune of Rs.500 crore for bad quality components and engine.
  • The government can hold contractors, consultants and civic agencies liable for defective, damaged and poorly maintained roads leading to accidents.

Overall the Motor Vehicles (Amendment) Bill of 2019 provides much-needed teeth to the enforcement agencies to create an efficient, safe and clean transport system in the country. The Bill also gives more power to traffic officers to impound documents and suspend driving licences under Section 206 of the MVA. At the same time, Section 210B has the provision for penalizing offences committed by enforcing authorities as well.

The Motor Vehicles (Amendment) Bill is a step in the right direction but we feel that there must have been stricter fines and penalties for those driving without motor insurance. As only around 25-30% of vehicle owners have four wheeler insurance or two-wheeler insurance in India, a stricter enforcement regime would have helped increase that number.

If your motor vehicle insurance is due for renewal, don’t delay, buy Bajaj Allianz motor insurance on Finserv MARKETS and enjoy cashless claims at over 4,000 garages and swift, in-house fast claim settlement.

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