Hint: India before 1991
If you have ever taken a private bus between Hyderabad and Chennai, you’d notice that the bus was probably registered in a state such as Arunachal Pradesh (AR), Nagaland (NL), Puducherry (PY) or Odisha (OD). These buses are rarely registered in Tamil Nadu (TN), Andhra Pradesh (AP) or Telangana (TS) itself and would have never seen Arunachal Pradesh or Nagaland after being registered there.
Now, a common question comes to mind– Why would a bus plying in South India be registered somewhere in the Northeast?
The answer lies in terrible government laws that make it very difficult for entrepreneurs in the transport sector to operate freely. The two main culprits here are the Motor Vehicles Act of 1988 (MVA 88) and Central Motor Vehicle Rules of 1989 (CMVR 89).
These two laws practically control every aspect of transport in India - this includes even ride-sharing majors such as Ola and Uber.
State governments have been employing these legislations to throttle private transport providers for decades now. One easy way to harass private players is to declare a certain route in the state (say, for example between Belgaum and Bengaluru) as ‘nationalised’ under Section 99. Once this happens no private player can operate on the route. Some states have managed to nationalise all routes within their territory, thus giving no space to private players to operate at all.
Precisely why government should prevent a legitimate businessman from running something as simple as a bus service between two cities is an easy guess: harassment. The whole point of such harassment by the government is to extract money in bribes at multiple levels. Once you have a law that forbids a bus service bribe collection in return for looking the other way is made simpler.
Nationalisation of routes is not the only legal barrier to running buses. There is more.
The Motor Vehicles Act makes a curious distinction between bus services – Stage Carriages and Contract Carriages. The former is legally allowed to stop and pick-up multiple passengers on the way, while the latter can only go from one point to another without picking up people on the way. Some states allow private stage carriers while in others only government buses and school buses get to acquire the tag. This is yet another source of harassment - transport providers in states like Haryana have to routinely shell out bribes to bureaucrats to be able to operate simple bus services.
Coming back to the question of why buses plying in the south are registered in the north-east. This is a simple case of private players finding a way to circumvent needless laws. The loophole in the law is that the transport department of any state has jurisdiction over only those buses registered in the state. Thus, buses and trucks would register themselves in states with lesser restrictions and ply them in other parts of a country. This has been the general scenario in the country for decades now, and this is why you see buses registered in Arunachal Pradesh plying in Bengaluru.
But even this round about manner of somehow getting to operate buses is being threatened by government, only this time it’s the government of Arunachal Pradesh.
Recently, the government of Arunachal Pradesh against buses that bore AR registrations but were running outside of the state. The transport commissioner has asked district transport officials to cancel their registrations as well as their national permits. The grounds behind this move is evidently Section 49 of the MVA.
Section 49 in this outdated legislation is the particular section which asks vehicles to change their registrations if they have been in a different state for more than a year. As if this wasn’t enough, it sets about a painfully cumbersome process to do so with multiple rounds of running around to get a “No Objection Certificate” and more.
In a country where buses form the backbone of the transport network, state governments are getting ever creative in harassing private bus services providers. The gravy train of bribes from transport officers to ministers is too large for them to make this easy for private players.
So, is there a way out?
It is quite simple. The law needs to be changed.
The first step would be to amend the law to remove the distinction between stage and contract carriers. This would set up a level playing field for all operators, including taxi operators. It would also enable more flexibility by allowing vehicles to be used for short trips with multiple pick-ups or non-stop routes depending on the operator.
This should be followed with Section 99. Why should governments have a monopoly over certain corridors–especially if they are profitable? The purpose of this section was in the event private players were unable to serve it, but it has been used to do the exact opposite.
Next in line would be Section 49. The law sets up a discriminatory ground that allows states to legally extort vehicle owners. Traffic police and RTO officials in many states are known to vehicles with outstation registration. Ideally, any vehicle should be able to drive across the country without needing to prove to the traffic police that they are temporarily in another state.
The requirement of an NOC from one state is again a stumbling block. Why should a state have the authority to decide if it is alright for a vehicle to be registered in another state? The registration of a vehicle number needs to be permanent. Changing the number when the vehicles change states acts as a barrier in investigating past crimes or accidents.
With such regressive laws, all of which are from before PV Narasimha Rao’s liberalisation of the economy, the transport sector is stifled and various governments gain a monopoly. The system needs a change, one that is consistent with the requirements of the 21st century and not the late 1980s.
Allowing private parties to engage in a market that would benefit both the operator and the passenger will certainly be the big boost for our economies. Transport is a market that needs more investment from both the public and the private sectors and should ideally be self-regulated by the markets, rather than the government.