Abolition of permit raj: Centre and state on different routes

Bengaluru: In his budget speech on Monday, finance minister Arun Jaitley spoke about the government's plan to do away with the permit raj to end roadblocks facing the transport sector. The announcement, however, is likely to pit the state transport departments and private transporters against each other in Karnataka. This is because Jaitley, while tabling the finance bill, left the choice of adopting the legal framework to the states. In Karnataka, the draft rules of 'On Demand Transportation Technology Aggregators Rules 2016' has been published for objections till March 9, following which it'll come into effect. This means, the state government has exactly one week to implement the rules or go for a straight battle with private cab companies. The rules, however, make no provision for abolition of the permit system in the state. The draft rule, in it's present form, mandates that a company/aggregator should have obtained the license under the rule. Further, the vehicles the aggregators associate with should have contract carriage permits, meaning they can offer only point-to-point service. However, it's not the same with cab pooling services. Stage carriage permit is issued to BMTC and private buses plying between towns or cities, allowing them to ferry passengers between multiple points. Then there are state carriages and contract carriages, all-India permits, state and city permits for taxis and freight carriers. Also, most taxis have all-India permit or state taxi permit so that they can move beyond the city or state. However, the aggregator rule implies to taxis that'll be plying within city limits and obtaining city taxi permits.Asked about the prevailing scenario, transport minister R Ramalinga Reddy said: "I'm still to read the fine prints of the 'abolition of permits' part of the budget speech. How can we suddenly get rid of the permit scheme?"Said Rame Gowda, transport commissioner: "We will see the details of the budget on the abolition of permits scheme. Even if the scheme is abolished, we won't become financially weak. Karnataka has four state transport undertakings that are financially sound. We always mop up revenue as per our targets. We are not discouraging private transport as such. But private transport owners will look into routes that'll get them more profit and not connect rural places, something the state transport system does."Gowda added that the draft for a separate law on aggregators has been floated for public consensus. "The only point where the aggregators and the department differ is the rule which requires cab aggregators to be under the ambit of the dept which will make them more responsible towards the passengers. They now call themselves technology platforms which will need to change." According to the draft rules, such companies cannot be sheltered under the intermediary guidelines of the IT Act or Companies Act, like it's now. Uber and Ola, the two giants in the aggregator industry, have already submitted their objections. "We welcome Karnataka's initiative in releasing the draft guidelines. We have reviewed the guidelines and have submitted our suggestions. We are confident that the department will consider our recommendations positively. We look forward to a progressive regulatory environment that embraces technology to solve the massive congestion problem in our cities," said Bhavik Rathod, GM, south and west, Uber India.Hailing the government's move to get rid of permit system, civic expert V Ravichandar said: "The budget has initiated reforms in the archaic Motor Vehicles Act of 1989, making it easy for private transporters to sustain. This will also bring in more money and entrepreneurship in the public utility sector, apart from offering more choices to consumers which is highly required in a city like Bengaluru. However, this will be possible only if the state government agrees to it."However, many are of the opinion that terms and conditions should apply for cab aggregators. M N Sreehari, traffic and transportation expert, said, "As far as safety is concerned, the Centre should deal with private transporters with an iron hand. It must ensure that there are uniform rules for safety of passengers across modes of transport, be it state owned or private. Modalities can be looked into by the state transport departments. However, as is always the case, states ruled by opposition parties will disagree with the Centre on various issues, hindering development in the mobility sector overall."