Weekly Analysis

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RSTV – THE BIG PICTURE ANALYSIS : Motor Vehicle Amendment Bill

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  • Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

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  • The Bill seeks to amend the Motor Vehicles Act, 1988 to provide for road safety.  
  • The Act provides for grant of licenses and permits related to motor vehicles, standards for motor vehicles, and penalties for violation of these provisions. 

What is the background?

  • The past two decades have witnessed a huge rise in road accidents, fatalities and other safety concerns in India. 
  • A government committee estimated that road accidents rose by about 50% between 2005 and 2015. 
  • However, it was only in 2014 that the National Urban Transport Policy (NUTP) committee proposed a new legislation, incorporating all modes of transportation, multi-modal integration, road safety, etc. 
  • Following that, the Road Transport and Safety Bill was drafted in 2014. 
  • Finally, it was redrafted with the Motor Vehicles Amendment Bill in 2019. 
  • The bill suggests a new National Transportation Policy, which may replace the existing National Urban Transport Policy, 2014. 

What is the compensation provided for road accident victims?

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  • The central government will develop a scheme for cashless treatment of road accident victims during golden hour.  
  • The Bill defines golden hour as the time period of up to one hour following a traumatic injury, during which the likelihood of preventing death through prompt medical care is the highest.  
  • The central government may also make a scheme for providing interim relief to claimants seeking compensation under third party insurance.  
  • The Bill increases the minimum compensation for hit and run cases as follows: 
(i) in case of death, from Rs 25,000 to two lakh rupees, and 
(ii) in case of grievous injury, from Rs 12,500 to Rs 50,000. 

What does it say about Compulsory Insurance?

  • The Bill requires the central government to constitute a Motor Vehicle Accident Fund, to provide compulsory insurance cover to all road users in India.  It will be utilised for:
  • Treatment of persons injured in road accidents as per the golden hour scheme
  • Compensation to representatives of a person who died in a hit and run accident
  • Compensation to a person grievously hurt in a hit and run accident
  • Compensation to any other persons as prescribed by the central government.  
  • This Fund will be credited through: 
  • payment of a nature notified by the central government, 
  • a grant or loan made by the central government
  • balance of the Solatium Fund (existing fund under the Act to provide compensation for hit and run accidents)
  • any other source as prescribed the central government 

What are the salient features?

  • The Bill defines a good Samaritan as a person who renders emergency medical or non-medical assistance to a victim at the scene of an accident.  
  • The assistance must have been (i) in good faith, (ii) voluntary, and (iii) without the expectation of any reward. Such a person will not be liable for any civil or criminal action for any injury to or death of an accident victim, caused due to their negligence in providing assistance to the victim. 
  • The Bill allows the central government to order for recall of motor vehicles if a defect in the vehicle may cause damage to the environment, or the driver, or other road users.  
  • The manufacturer of the recalled vehicle will be required to: (i) reimburse the buyers for the full cost of the vehicle, or (ii) replace the defective vehicle with another vehicle with similar or better specifications.  
  • The central government may develop a National Transportation Policy, in consultation with state governments.
  • The Bill provides for a National Road Safety Board, to be created by the central government through a notification. 
  • The Bill increases penalties for several offences under the Act. 
  • For example, the maximum penalty for driving under the influence of alcohol or drugs has been increased from Rs 2,000 to Rs 10,000.  
  • If a vehicle manufacturer fails to comply with motor vehicle standards, the penalty will be a fine of up to Rs 100 crore, or imprisonment of up to one year, or both.  
  • If a contractor fails to comply with road design standards, the penalty will be a fine of up to one lakh rupees.  
  • The central government may increase fines mentioned under the Act every year by up to 10%.  


  • The Bill defines aggregators as digital intermediaries or market places which can be used by passengers to connect with a driver for transportation purposes (taxi services).  
  • These aggregators will be issued licenses by state. 
  • Further, they must comply with the Information Technology Act, 2000.
  • The government needs to ensure better ways to implement and enforce the new rules and regulations to its fullest. 
  • There is no point of making a bill that requires huge amount of risks in enforcement, if the government fails to make it practical.