Tuesday, June 30, 2015

MUSINGS FROM PRIYADARSHINI KARVE: Toll tax and Sustainability





Yesterday, I was on the road, and benefited from the new decision of the Government of Maharashtra state to exempt light motor vehicles from the toll tax on several roads. Today's musings is about looking at the whole toll tax issue through the lens of sustainability. 

Road infrastructure is an important component of development. In the last few decades, road infrastructure has been created through what is called as the pubic-private partnership. In this case, the tasks of mapping the road, and acquiring the land etc is done by the government, the actual road construction is carried out by a private party, which is then allowed to collect toll from the road users to defray their expenses and make profit on their investment. The calculation of the toll tax (amount and duration of staying in force) is dependent on the actual investment of the private party, and an estimation of how many and what type of vehicles will be using the road, and how those numbers will change over the years. 

I am sure almost everyone reading this blog has passed through some toll plaza somewhere. Have you ever noticed the toll tax amounts for different kinds of vehicles? The light motor vehicles or cars have the least tax. As the passenger carrying capacity increases, the tax increases. The goods transport vehicles pay even more, and again as the vehicles get heavier the tax increases. 

When a government decides to exempt a certain class of vehicles from the toll tax, what exactly does that mean? The private party who has build the road and collecting the toll, is certainly not going to agree to collecting less than what they are promised in the original contract with the government. So, by exempting a certain class of vehicles, whatever is the shortfall will have to be given to the private party by the government. I feel that this decision is unjust on several levels. 

Firstly, a portion of the money that I pay as tax is going to be used for paying toll on roads that I may never use. By the way, please understand that EVERY citizen of this country is a tax payer. We have a tendency of thinking only about income tax when we talk about 'tax payers' but everyone pays sales tax and service tax on all goods and services purchased, everyone also pays various local body taxes, etc. The various arms of the government use all the tax money from all these various taxes to run the government. Therefore if a portion of this money is to be used for 'subsidising' people who use a particular mode of transport on toll roads, every citizen is involved, whether paying income tax or not. And who is it that is getting subsidised in this case? It is the people who can buy cars worth hundreds of thousands of rupees if not millions, or those who can afford to hire taxis for traveling around. How fair is it that a lower middle class non-car owner's hard earned money should be used for subsiding these people?

Secondly, this decision is also unjust from environmental perspective. It does make sense that the toll tax should be higher for vehicles with more people or vehicles with heavier loads, etc. However, if the government does want to exempt some people from the toll tax (for whatever reasons) it makes more sense to lighten the toll tax burden on public transport vehicles. A vehicle that is carrying more passengers occupies less space on the road, and results into less carbon emissions per person than say air conditioned cars with just one person in each car. A pro-sustainable development government should use the opportunity of giving any sops like this to also gently nudge people towards environmentally responsible behaviour. Of course this alone will not make people keep their cars home and travel by buses, but every little bit directed to that aim will add up and eventually create a situation where it would make more sense to travel by a bus than by a car. 


Those were my thoughts as we passed through each toll plaza without having to pay any tax... What do you think?  

Priyadarshini Karve
Director 
Samuchit Enviro Tech



#BeModernBeResponsibleBeRespectful


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