Sucheta Dalal :Highway loot
Sucheta Dalal

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Highway loot  

Oct 16, 2005

Anyone travelling on India’s highways cannot have missed the large number of trucks lying overturned or collapsed by the roadside, or slowing down traffic by crawling at under 20 kmph. In a majority of cases, this has three explanations — the truck is not road-worthy, is grossly overloaded or the driver is drunk. There are clear rules to prevent each of these violations, but they are all flouted for a price. A truck manufacturer who wants to remain unnamed conducted a private study to find out how much money changes hands to legalise overloading of trucks that endanger people’s lives. It came up with a whopping figure of Rs 2,000 crore paid annually to police officials across the country in order to condone overloading. To put it in perspective, this is equal to the entire Securities Transaction Tax (STT) that the finance minister will hope to collect in a raging bull market. The large-scale loot remains undetected because the money paid per truck is fairly low. Ironically, instead of tackling this daily highway robbery, the finance minister was focussed on exempting precisely this group from service tax and surcharge. Was it because they were already taxed informally?


Loot matrix


Here is how the study arrived at its conclusions about the highway loot. India has about 30 lakh trucks plying on the roads everyday. A sample study of costs, with cooperation from trucking companies revealed that 90-95 per cent of them carry overloads of anywhere between 50-80 per cent. More interestingly, it found that large companies actually pushed truckers to overload vehicles. Companies are well aware that the legal limit for a regular truckload is less than 40 tonnes. Yet they insist on overloading them in order to reduce costs. Competition induces greater overloading by transporters to bag large annual contracts. For instance, the study found that a steel company that transports one-lakh tonnes to Mumbai every month from the South actually demands a load factor of at least 60 tonnes against the legal limit of 35 tonnes to cut transport costs. The truckers then bribe police officials all the way to their destination to ensure clear passage. This is now a smooth and well-oiled system with pre-negotiated rates for each police checkpoint. The transport office also plays an important role in this loot by passing dilapidated trucks as road-worthy for a price. That is why key transport postings are ‘auctioned’ for huge prices.


Dangerous effects


The loot has even more dangerous consequences. Although all overloaded trucks that ply on Indian highways are insured, insurance companies would technically be well within their rights to deny payment. This starts another round of palm greasing to ensure that the police help to suppress true loads in order to claim insurance. The nexus between the police and truckers also has a macabre element because the police are generally pre-disposed to side with truckers when they are involved in accidents with private vehicles unless the victims invoke the right connections. Clearly, corporate India (including large public sector companies), which complains incessantly about bad infrastructure and corruption, needs to clean up its own house. Once companies insist on the use of good quality trucks and no overloading, the loot will be dramatically reduced. The rest of the market is small, fragmented and cannot engender massive organised corruption.


Women of ICICI


In one stroke, an eminent jury of corporate biggies has debased the achievements of half-a-dozen top executives in India’s financial world by lumping them together for a joint award. The ‘Women of ICICI’ is indeed how this group is usually described by the male-dominated financial sector usually in the context of their aggressive and no-holds barred competitiveness and with more than a hint of the pejorative. Yet, the companies they head in the ICICI Group have come from behind to become the market leaders in their respective segments such as insurance and domestic private equity. Why would this achievement be dismissed in a joint award? Why not stick to rewarding those that were individually worthy of recognition, especially when there is already a separate category for recognising women’s achievement? Women CEOs are still relatively scarce and their presence on the boards of companies is abysmal. That is why a joint award is more ridiculous. The root of this attitude is easily traced. In all the companies headed by the jury members, there are token women on the board of directors or at the senior-most management levels. The jury did have a woman with a formidable reputation, but her corporate position was inherited. Many professional women told me that the award only underlines how difficult it remains for women to receive recognition without reservation or break into male-dominated corporate boards. If anything, they say, the recognition should have gone to ICICI Bank’s chief, K.V. Kamath, who seems to have forgotten to install a glass ceiling to keep women out of the bank’s top floor. The ‘women’ could have waited until the jury was mature enough to recognise individual achievement.





-- Sucheta Dalal