How the transport policy was manipulated for private profit
Punjab Bureau, Chandigarh, September 28. Soon after it came to power in February 2007, the Shiromani Akali Dal-Bharatiya Janata Party (SAD-BJP) alliance government headed by Chief Minister Parkash Singh Badal decided to review the existing public transport policy. By September that year it unfolded the new transport policy that clearly smacked of favouritism towards the private operators who owned luxury buses.
However, the then Transport Minister Master Mohan Lal masterly couched the bias claiming that by encouraging the introduction of air-conditioned buses, the government would be able to persuade the common man to travel more in buses rather than cars and scooters.
The new tax structure for public transport had the strangest of anomalies – the costlier the bus, the lower the taxes the owner paid. For operators running ordinary buses (meaning non-AC) the tax rate was reduced from Rs 2.50 per km to Rs 2.25 per km – a mere 25 paise. But for air-conditioned buses it was reduced by half from Rs 2 per km to Re 1 per km. And for the super-luxury buses also called integral coaches the tax per km was slashed from Rs 7.50 a km to 50 paise per kilometre – a drastic reduction.
It was around this time that the companies owned by the Badals had started steadily buying or acquiring buses in the luxury sector. They were not the only politicians that were doing that. Representatives from the entire political class whether the BJP or the Congress were not far behind. These included Avtar Singh Henry, a former Congress MLA and Jagdish Sahni, a sitting BJP MLA.
In normal practice if there is a conflict of interest, the individuals concerned should have declared their interests and recused themselves from the policy making process. Instead there was a glaring impropriety of the Chief Minister and other interested political personalities who were in power directly determining the outcome of the policy.
By 2011 when the new transport policy was fully implemented, the companies controlled by the Badals had acquired or taken over 150 such luxury buses. As mentioned in Part 2 of the series that appeared yesterday their acquisitions in the luxury sector totalled the number of such buses owned by the two state-run corporations, Punjab Roadways and PEPSU Road Transport Corporation (PRTC).
The new policy meant that in the super-integral category if, for instance, a bus ran from Bathinda to Chandigarh traversing a distance of 238 kms in the old slab of Rs 7.50 a km the owner would have paid a tax of Rs 1785 per journey. But in the new slab of Rs 0.50 per km, he pays only Rs 119 – a saving of as much as Rs 1,666 per trip in tax.
In the case of HVAC (Heating, Ventilation and Air-conditioning) category, according to the old slab of Rs 2 a km, operators would have paid Rs 476 for a similar journey. In the new slab of Re 1 a km they pay only Rs 238 – a tax saving of 50 per cent on each trip.
In comparison the saving for owners of ordinary buses was marginal. For the same journey, according to the old rate of Rs 2.50 per km they would have paid Rs 595 per trip. In the new rate of 2.25 per km they pay Rs 535.5 making a saving of barely Rs 60 per trip.
The other major concession to the luxury segment operators was that instead of paying tax for 365 days a year, integral buses had an exemption for 150 days a year and HVAC for 75 days a year. Strangely ordinary buses, in which the weaker section travel in, get a tax exemption only for 50 days a year – one third of the concession given to the luxury segment. “The new policy was drafted to favour Badals and their favourites in the private public transport business,” charges Amrik Singh Dhillon, a former Congress MLA from Samrala and a private public transporter himself.
Manpreet Singh Badal, who was the then Finance Minister, told The Tribune that his ministry also raised objections to the manner in which the new policy was tailor-made to suit a selected few, especially those in the luxury public transport sector. He claims that his ministry had even stated in writing that the new tax policy would destroy the state-owned public transport corporations. It is a different story though that till he was in Government, Manpreet did not openly protest or even have his own holdings in buses diluted.
Master Mohan Lal of the BJP, the then Transport Minister, however, denies charges of favouritism being shown to the Badals or other politicians. He told The Tribune “To be honest, I was till then a novice in the transport business. I had no knowledge of who owned buses. My only directions to the then Transport Secretary was that the new policy should be designed to bring relief to the common man while improving the services.”
Instead it has resulted in the opposite. Smaller and marginal players in the transport sector who had been agitating for years demanding the removal of major bottlenecks say they are in dire straits. Baldev Singh, a private bus operator who runs Dasmesh Transport Company, holds the wrong policies of the SAD-BJP government responsible for the plight of smaller bus operators. “Small private bus companies are on the verge of collapse. If the present policies are continued for another two to three years, only a couple of major private bus operators will remain in the business. The rest will be wiped out.”
By Prabhjot Singh with Sushil Goyal, Gagan K. Teja, Puneet Pal Singh Gill, Ravi Dhaliwal and Kusum Arora.
Tomorrow: Private profits, public losses; The Tribune will expose how and why the state-owned bus corporations face the same fate as Air India in the aviation sector.