The third car in the house

Despite high taxes that generate huge revenues for govt, vehicle registrations continue to rise beyond sustainable limits

The third car in the house

Flashy, fast and feature-packed, the jet black SUV stared down from an imposing billboard. Caught in a long, agonising wait at the traffic junction, Ashok Ram stared back from his car. There, in that chaotic crowd of a hundred vehicles, he knew he would own that SUV soon and gift his wife his car!

At the Indiranagar RTO, a long, tiring day awaited the clerk. He knew the winding queue of applicants, their vehicle registrations forms in tandem, would only get bigger. But the transport department had no reason to complain. For, in that crowd stood many, who had to fork out a fortune to re-register their vehicles bought outside Karnataka!

Motor vehicle registrations bring in big money for the State government, an estimated Rs 3,600 crore every year. For instance, the revenue target from motor vehicle taxes and other fees was Rs 3,167 crore in 2012-13. The revenue collected was a stupendous Rs 3,567, exceeding the target by 112.64 per cent! And, almost 50 per cent of this amount came from one city: Bangalore.

So, even if Bangalore’s roads are notoriously inadequate to meet the mounting challenge from 50 lakh vehicles and more, the State wouldn’t be too keen to curb the numbers. Neither will the struggling automobile industry. Pushed to the background in the process are talks of sustainable transportation, reduction in personal vehicles and a boost to public transport.

High LTT no obstacle

By all accounts, the high Life Time Tax (LTT) levied on vehicles by Karnataka is one of the highest in the country. For vehicles with ex-showroom costs not exceeding Rs five lakh, the LTT is 13 per cent of the cost. Between Rs five and 10 lakh, it is 14 per cent, going up to 18 per cent for vehicles that cost Rs 20 lakh or more. Only electric cars / two-wheelers have a lower LTT of four per cent. An additional 11 per cent cess on this tax is levied on all vehicles. 

No wonder then buyers head out to Kerala, Pondicherry or Goa to get their vehicles registered. The tax rates there are at least 10 per cent lesser than Karnataka. But problems crop up when they enter the State. As a senior transport department official informs, these vehicle owners have no more than 30 days to get re-registered, coughing up the hefty LTT here. 

Misdirected by touts, stumped by the laborious delays at the RTOs, many of these owners are forced to run around in circles for months. But as Varun, who shifted base from Delhi to Bangalore realised, avoiding re-registration is not an option. Transport inspectors, despite the staff shortage at the RTOs, easily spot the non-Karnataka vehicles and impose high penalties on defaulters. “There is no escaping them,” says Varun, who had to cough up Rs 67,000 as LTT and penalty for his car.  

It was not so tough for them before. The LTT collection for non-Karnataka vehicles had begun only after an amendment to Section 3 of the Karnataka Motor Vehicle Taxation Act, 1957. This made it mandatory for all vehicles from outside registered before April 1, 2012, to pay tax, and penalty on payment default. 

Yet, despite the high tax rates, vehicle numbers continue to rise substantially in the City. Transport officials say the four-wheeler numbers have dipped a bit in 2013-14 from the average 10 per cent annual growth recorded in recent years. Economic recession and the underperforming automobile industry contributed to this. But two-wheeler population rose by five per cent during the period.

Cars as status symbols

The City traffic police are well aware of the implications of this high growth on the already overstretched roads. Cars and SUVs continue to be status symbols. Graduating from a two-wheeler to a car is still a class statement. There is no getting away from this trend, as a former traffic police topbrass put it. Concepts such as car-pooling, prioritising public transport over private vehicles, are still outside the mainstream narrative.   

Nevertheless, local and global sustainable transport experts continue to make the right noises. They talk about public-private partnerships in urban transport in Latin American cities comparable to Bangalore, such as Bogota. A PPP transport model there carries thousands of passengers per hour in a network 108 km long. Almost 30 per cent of the people there take the Bus Rapid Transit System (BRTS). Bogota’s 1.5 million private vehicles contribute barely 12 per cent of the total trips.

Can the Bogota experiment be replicated here? Sceptics aren’t convinced. The City’s irregular, poorly built and maintained roads are hardly compatible with such ideas, they say. Traffic rule compliance and lane discipline are concepts too alien for many.

 Challenges exist, but if Ahmedabad could try out a BRTS, why not Bangalore. With a few roads to get a quality upgrade through TenderSURE, why not launch a pilot project here? 

Urban mobility experts contend that building more roads and more flyovers will only add more personal vehicles. The alternative is to make it extremely tough for people to bring out their vehicles. But with an estimated 50 lakh vehicles already on the road, this could get extremely tough.

Yet, there are people who feel the 50 lakh number is exaggerated. Reason: Personal vehicle owners do not inform the transport department if they scrap their aged vehicles. Neither does the department have a mechanism to keep a tab on vehicle-use. There could have been a way if owners of vehicles beyond 15 years renew their fitness certificates every five years. Since this is rarely done, the number of old vehicles is open to conjecture.

The transport department records show that there were a total of 2,91,543 non-transport, 9,972 transport and 8,503 light goods vehicles that were 15 years old in the city, as on March 31, 2013. Including buses, light goods vehicles , taxies, LMV pasenger and othe rvehicles, this number swelled to 3,64,518 vehicles. This number marginally grew over the last one year. 

Fancy numbers

Fancy number registration is a good revenue earner for the department. As an RTO official explains, a vehicle owner could take a number of his choice either from a running series or a new series, which will cost more. The cost for a preferred number in a running series is 

Rs  20,000 for four-wheelers and Rs 6,000 for two-wheelers. But the cost will shoot up substantially for a new series, Rs  75,000 for four-wheelers and Rs 25,000 for two-wheelers. 

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