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No beating about the bush.
The biggest ‘income’ from these privatised toll checkpoints is from the intelligence angle, both commercial and security. And you cannot put a number on the speed money being generated from these checkpoints
In the first part of this series (Delhi toll tax: Corruption, or daylight robbery?) we had said that the cause of some of the biggest and worst traffic jams is that there is a 'toll tax' to be paid to the Municipal Corporation of Delhi (MCD), by all commercial vehicles, including buses and taxis.
Readers were introduced to the background, and some of the numbers. That a Supreme Court of India judgement is involved suggests caution and respect, so this article has only quoted from it, as published by a Government document. In no way is this to be construed as a comment or challenge or any form of incorrect inference to the Honourable Supreme Court of India.
So what are the lacunae with the MCD Toll Tax, why is it such a draw, and what happens next?
To understand this some more, we need to go back into the history of road movements between Delhi and Uttar Pradesh as well as Haryana, the two states that surround Delhi, and technically speaking form part of something optimistically called the 'NCR' or the 'National Capital Region'. As far back as before the 1857 battles, not just the Brits, but also their predecessors, had realised that allowing free and fair trade between different parts of India was one sure way to unite the disparate entities that made up the Indian Subcontinent and beyond.
This could not be allowed-and is till today the root of why GST (goods and service tax) is not making its appearance, incidentally, though we can hardly blame the free-trade toting Brits for it anymore.
These restrictions became even more stringent, more so in and around Delhi after 1857, to keep an eye on possible freedom fighters, by restricting free unsupervised movement, on roads leading in and out of Delhi as well as other important towns- especially those with Cantonments in them.
(Which is why till today, Cantonment Boards can and do levy 'Vehicle Entry Taxes' on vehicles owned by natives, sorry, civilians). At the same time, they needed to move men and materials inwards too, especially to the fronts, as well as move exports out of India, so the system had to be flexible enough to allow them to do so when required.
One way was to make the Railways subject only to central control. This they achieved in the period between the two Great Wars, by unifying most of the State owned railways with their own-with a few notable exceptions. Gauges, rolling stock, finances, ownership-everything could be different, but the clause paramount was that goods and people travelling on trains were not subjected to State laws while onboard.
This simple and wonderful benefit accruing to the Nation exists to this date, and the few exceptions, like the Nizam's State railways and those belonging to some private players as well as some of the seaports, have now been well and truly co-opted after Independence.
Into one big Central Government entity-where the State Governments have nothing to do with the fiscal and administrative aspects of running the Indian Railways, or impacting those who use it.
The one big exception where even the Indian Railways had to bow down to the State Government was and is the surcharge levied on Harbour Line local trains crossing the Thane Creek railway bridge on their way from Mumbai to Navi Mumbai. This surcharge is added to the cost of a commuter's ticket and then used for nobody really knows what anymore.
Thousand of bridges are used by the Indian Railways, a few have been constructed across the Yamuna River by the Delhi Metro Rail Corporation, the Konkan Railways has a few hundred along its route-but only the Thane Creek Railway Bridge is blessed with such a surcharge.
Which, apparently, is one more reason why trains from Chembur and Panvel side heading towards Vasai Road/Virar are not being introduced, despite heavy commuter demand. Apparently, this is because it will impact toll collections, and we all know who is the "King of Tolls" in Maharashtra.
However, within the context of Delhi and its surrounding states, commercial road traffic was always a mess. This was tolerable for some time, but became increasingly difficult once satellite cities and industrial enclaves started growing with great speed near Delhi. In addition, most of the road traffic headed from and towards the North also started using Delhi-one reason being the central location, another being the intermodal exchange, and most important being the various "do number" benefits involved due to a multiplicity of tax regimes-Central, State of UP/Haryana, and Delhi. There were fortunes being made by arbitraging the numbers here, and while moving paper was one part, it also required physical movement of goods and people.
All this, and more, meant one simple thing-a large number of people and an even larger amount of goods were going to enter and exit Delhi. Every day. And where a rational society would see a need to place social good and progress over everything else, competing State governments saw an opportunity to generate revenue. For not just the States, but also more so for those who controlled the States.
So, local trucks, buses and taxies could not move between Delhi and contiguous habitats like Gurgaon, Noida, Faridabad and Ghaziabad-unless they paid huge sums for permits or operated illegally.
(For example, a few years back, Uttar Pradesh and Delhi banned each other's State owned buses from entering each other's "territory" on vague grounds, while private buses whizzed through merrily).
Even today, though some sort of agreement has been made between the three states, it is still far from perfect.
So what has all this got to do with tolls?
Just this-tolls on National Highways and other centrally-controlled roads can only be levied by and with the permission as well as involvement of the MoRTH (Ministry of Roads Transport and Highways) as well as the NHAI (National Highways Authority of India).
And that can only be done if some requirements in terms of road improvements or minimum adherences are in place. For that, for example, the toll collected by the private entity on the Delhi-Gurgaon Expressway is subject to MoRTH & NHAI. But the State government and their minions-they really have nothing to do with these collections.
And that was, to the best of their analysis in terms of trying to portray the State's interest, opportunity and revenue lost. They could collect tolls on State roads-but how many people used them? And then there was the rule that all toll roads had to provide for an alternate 'un-tolled' option-which was thrown out of the window, as the Mumbai-Pune route shows, where you pay tolls on both options.
Till our friends in Delhi saw their chance. And converted a judgement pertaining to reducing pollution into collecting money. It was as simple as that.
The fact that most of the money does not reach official coffers may also be incidental. But the amount is not.
Where does the extra money flow from, and to, then? This is how it, reportedly, works. Of course, we may be wrong, and there may be extremely honest people in this business too.
1) The contract is awarded on a 'winner take all' basis for a fixed sum per month, amount locked in for 3 years, for all 121 entries into Delhi. With efficient cartels controlling the whole process, the bids are kept artificially low, and then the whole business is divided. Entry points, timelines, everything. Something like how collections are divided at religious places between multiple claimants.
2) The collection is supposed to be done in a systematic manner, so that a track is kept of how many vehicles are paid how much, which could lead to possible re-negotiation of contracts to benefit the Government. In reality, it is bits and pieces of paper, and that's it. Sometimes no paper, too. Stand at the borders at night and see the fun and games as some pay, some are waved through, and some negotiate. Openly.
3) There is now a "reverse" entry tax for vehicles entering UP too, which is even higher than the one charged for entering Delhi, though it seems to work on some unknown process so far. The boards announcing rates are not visible. But drivers tell me it exists and again, one has seen bits and pieces of paper pasted on to windscreens-of course, there are the long queues and wooden shacks where also checked are the amazing "Form 38"s. (The Form 38 is an Uttar Pradesh speciality, extremely draconian).
4) Taking entry taxes from buses and taxies, especially city buses (stage carriages) and seat-basis share cabs, increases their cost per head by anything between Rs3 and Rs10 per person. This is in addition to the costs of multiple permits required for Delhi, Haryana and UP. That's one reason the ownership and extensive usage of private vehicles is not going down. Apart from the sociological aspect, there is good money to be made for filling stations too.
5) The immense traffic jams caused at these entry tax points breed a whole new category of crimes and criminals. At some borders it is unsafe to move during late evening hours, since there appear to be a whole lot of junkies and drunk people around too. Likewise, these borders are where you go for your narco and booze fix, but that's been the way it is for decades now, business as usual-can't really blame it on the "toll".
6) Pilferage of goods from trucks and baggage from buses is rampant, though seldom reported, as it is usually petty and non-violent. If you value something, just hold on to it, seems to be the logic. This, again, has been rampant for decades-again, not toll-dependant.
7) Yes, the police are present there too, and are observed acting as people who assist the toll operators rather than assist the users. There is also some reportage that an "escort fee" is levied, unauthorised, for permitting due safety of vehicles through all traffic zones.
However, the biggest income, which is not something that a number can be put on, is from the intelligence angle-both commercial and security. Thanks to the privatisation of collection of tolls at all entry and exit points in and out of Delhi, it is clear that one private agency which has never had its antecedents checked and is willing to do anything for money, will be in the know on everything that enters and exits Delhi by road. At a modest estimate, given the circumstances, it seems that the real income is by monetising this information to whosoever needs it. And before this is dismissed as just another bit of sensational reportage, think about this -the post for actually collecting the tolls is often auctioned. In other words, the person who collects the toll, often pays for the privilege of doing so to the contractor at some checkpoints.
Where people pay fortunes just to keep track of truck movements in and out of Armed Forces bases, we now hand over this information on a platter, just because our state governments don't want to collect money themselves. Can you imagine, if the same thing had been done to telecom, then how much money some people, politicians and others, would have made? Oh, okay, they already did that!!
Not just that, but if one tracks the fortunes of the companies and persons who have got into the toll business (and before that, into the parking business) then some amazing numbers emerge.
More on that in another article, soon.
Medical activists to observe 12th March as ‘Misery Day’ to protest against proposed service tax, demand rollback
The Union Budget proposal to levy 5% service tax on healthcare services has been severely criticised by the medical community, which has described it as a "misery tax". The community says the proposal to tax healthcare adds to the concerns of the common man, and it has demanded that it be scrapped.
Dr Devi Prasad Shetty, chairman of Narayana Hrudayalaya, has in an open letter addressed to the aam aadmi, said, "This is not a 'service tax', it is a 'misery tax' since the government wants to make money out of your misery. Please do not think that only rich people will be taxed since the proposal says only air-conditioned hospitals need to pay the tax. No surgery, simple or complex, can be performed without an air-conditioned operation theatre. Legally, a blood bank cannot get a licence without air-conditioning. CT, MRI and catheterization labs do not function without air-conditioning. Simply put, hospitals cannot function without air-conditioning!"
"British Raj taxed salt and our government taxes our miseries", Dr Shetty said.
The medical fraternity has called on people to observe 12th March as "Misery Day", to protest against the proposed service tax and demand that it be rolled back.
Presenting the Union Budget for 2011-12 last week, finance minister Pranab Mukherjee proposed a 5% service tax on medical services, including diagnostics, provided at centrally air-conditioned clinical establishments, having more than 25 beds for in-patient treatment. The service tax is to be levied also on services provided by consultant doctors operating from such hospitals.
Nagesh Kini, chartered accountant and Mumbai-based social activist, said, "Ultimately, it is the common man who will have to pay this. I do understand that air-conditioning is required for MRI, blood bank and such other facilities, but the taxes will only burden the common man. I agree totally with Dr Shetty's statement. "
Dr Shetty said in his open letter that taxes would only increase the already high cost of healthcare in India, putting quality treatment out of the reach of the common people. Therefore, "service tax, both old and new, must be withdrawn for all variety of services including diagnostic services, payment by insurance companies, etc. Also all varieties of taxes like central sales tax, customs duty, VAT on health sector to be withdrawn for at least ten years, till all citizens have access to affordable healthcare."
Dr Gustad Daver, director professional services, P D Hinduja National Hospital and Medical Research Centre, told Moneylife, "The more the taxation, the more the cost of treatment. This directly affects common people. The cost of high-end treatment is already unaffordable and adding to it is the service tax, which will increase the burden on people. We are working to bring the cost of treatment down and such taxes will make it impossible for us. I sincerely hope that the government rolls back the service tax."
On Monday, a Press Trust of India report quoted S Dutt Majumder, chairman, Central Board of Excise and Customs (CBEC), as saying that "as far as the CBEC is concerned, we think health services will also have to be brought under the (tax net) and it should not affect the common man. We are talking about central air-conditioning, not air-conditioning. And even private hospitals (with) central air- conditioning and more than 25 beds will be covered."
Mr Kini responded to Mr Majumder's statement saying, "This is totally incorrect. No one but the common man will suffer because of this service tax."
India Against Corruption to hold public meetings on Sunday, to mobilise for countrywide fast from 5th April
With the ruckus over Hasan Ali Khan's Swiss bank accounts and the Supreme Court quashing the appointment of PJ Thomas as Central Vigilance Commissioner, one would have expected the government to implement some strict measures to root out corruption. But it seems that prime minister Manmohan Singh has refused to initiate any changes till the state assembly polls, scheduled next month, are over. Now, activists, seeking immediate action on this festering issue, are planning to go on a fast next month.
Members of India Against Corruption (IAC), among them Dr Kiran Bedi, Arvind Kejriwal and Swami Agnivesh, met the prime minister and Union law minister Veerappa Moily on Monday, urging the government to undertake some anti-corruption measures immediately. However, the prime minister expressed his inability to take any specific measures before the completion of the state polls. Dr Singh also refused to include activists in the committee to draft the Lokpal Bill, which is expected to create an independent vigilance authority at the centre. Mayank Gandhi, spokesperson of IAC, said the movement would be intensified with activists scheduled to go on a fast from 5th April.
"The prime minister said the government has no time to consider the issue of corruption till the 13th May due to the ongoing Parliament session and the impending elections in five states," Mr Gandhi said. In view of the government's attitude, Anna Hazare, an activist of IAC, will launch the indefinite fast at Jantar Mantar in New Delhi.
The forum has planned public meetings nationwide on Sunday to raise awareness on the issue and mobilise support for the hunger protest. "Some 20,000 people will participate, distribute pamphlets in the meetings," Mr Gandhi said. "On 5th April, more than 100,000 people across the country will go on a fast in solidarity that will be led by Annaji in New Delhi."
Last week, Mr Hazare had warned that he would go on a fast if the meeting with the government turned out to be fruitless, and if the government did not agree to enact a strong anti-corruption law along the lines of the Jan Lokpal Bill, which has been drafted by IAC.
"After much persuasion, he (the prime minister) agreed to bring a Lokpal Bill in the monsoon session of Parliament," Mr Gandhi said. "He was informed that the government Bill was poorly drafted. The prime minister suggested that a sub-committee of the group of ministers (GoM) would be constituted and it would have two meetings with representatives of IAC after 13th May. The GoM will draft the bill accordingly after the interaction."
But the IAC had decided not to wait that long, and it has demanded that instead of a GoM, a joint committee be set up which will have equal representation from the government and activists. But the government has rejected the proposal. Mr Gandhi said, "In effect, we stand where we were before the meeting. The meeting served no purpose except that it made the intention of the government clear."
The poorly drafted Lokpal Bill, which the government plans to introduce in Parliament, places several restraints on the Lokpal and hinders its independent functioning. Hence, the Jan Lokpal Bill which has been drafted by the activists that gives more power for effective vigilance.
(To read the draft of the Jan Lokpal Bill log on to http://www.indiaagainstcorruption.org/.)