Transporters’ strike unreasonable and unjustified

Shri Brahm Dutt, Secretary (Road Transport & Highways) has termed the strike by the transporters under the banner of All India Motor Transport Congress (AIMTC) as highly unreasonable and unjustified as the Government has met all the promises made at the time of previous strike in July last year.

             Briefing the Media persons here today, Shri Brahm Dutt said that the interests of the common man are uppermost for the Government and every step would be taken to ensure that supply of essential commodities does not suffer due to this strike. Shri Saroj Kumar Dash, Joint Secretary (Road Transport) was also present at the briefing.

            Following is the text of the Statement issued at the Press Meet:

            The transporters under the banner of All India Motor Transport Congress (AIMTC) have gone on nation-wide indefinite strike w.e.f. 5.1.2009 demanding :

·     A bail out package for road transport industry involving reduction in diesel prices by Rs.10/- per litre, reduction in tyre prices by about 35%, moratorium on payment of instalment and waiver of interest on truck finances, moratorium on payment of toll for six months, free movement of vehicles without any National/State permits and related tax, and fixation of minimum freight rate;

·     Abolition of service tax on any services provided by Goods Transport Agency (GTA) or its subcontractors / intermediaries;

·     Exemption of limit for paying cash to transporters or by transporters to their subcontractors like truck owners;

·     To make amendments in the Motor Vehicles Act and Carrier Act in tune with ground realities;

·     Non-deduction of tax (TDS) from payment of freight.

             As regards the reduction in diesel price, the Government has already announced reduction of diesel price by Rs.2/- w.e.f. 6.12.2008 despite significant financial burden on the oil sector companies. The total outstanding losses of the three oil companies in the first six months of 2008-09 are more than Rs.14,000 crore. Moreover, the price of diesel is highly subsidized and even at the current prices, the three public sector oil companies are projected to incur under-recoveries of Rs.1,05,683 crore during 2008-09. However, the Government is closely watching the oil price situation and a decision regarding further reduction in diesel price will be taken at an appropriate time. Under this scenario, when the Government has announced certain reduction in the diesel price and is also in the process of considering any possible further reduction, there is no justification to press for demand on reduction in diesel prices by the transporters.  

            The Reserve Bank of India and Indian Banks Association have already taken certain measures such as giving liberty to the banks to allow first and second restructuring of loan which also covers truck finances. Putting any moratorium on all instalments and waiver of interest on truck finances is a credit decision needs to be taken by the individual banks on case-to-case basis. As regards the allegation of AIMTC regarding cartelization of tyre manufacturers, it is open for them to approach Monopolies and Restrictive Trade Practices Commission (MRTPC) to seek proper redressal. However, their grievances relating to abolition of duties and taxes on tyres, the same has been taken up with Ministry of Finance and Department of Industrial Policy & Promotion for appropriate decision.  

            As regards abolition of service tax on Goods Transport Agencies (GTA) and their sub-contractors, it is pertinent to mention that the AIMTC earlier went on strike on the same issue in July 2008. As per the agreement signed with AIMTC at that point of time, the Government has already issued necessary notifications / clarifications relating to service tax matters on transporters. A final decision relating to exempting all subcontract services under GTA from payment of service tax is also under consideration at the highest level of the Government and a decision in this regard is expected at any time. Similarly, the transporters were explained of the redressal mechanism available for seeking relief in the matter relating to TDS.  

            As regards moratorium on payment of toll for six months, it needs to be appreciated that to undertake a massive road development project like National Highway Development Project (NHDP), private participation is must to mobilise the level of financial resources required for the project. The national highways are being upgraded and maintained through BOT basis on specific contract with private concessionaires. Any moratorium on collection of toll at this point of time would not only lead to breach of contract but also seriously affects the financing plan for various phases of NHDP. The issue relating to free movement of trucks across the country, the Motor Vehicles Act 1988, provides adequate provisions to facilitate seamless movement of motor vehicles and also provides for single window facility for obtaining national permit. However, since the taxes on motor vehicles are under the domain of State Governments, the Central Government does not have any constitutional authority in this regard. However, the Government is open to take up the matter with State Governments on regular basis involving the transporters to work out a mechanism for barrier free movements from State to State. Similarly, the Carriage by Road Act 2007, has not yet been operationalised and the rules are being finalized. The views of all stakeholders including the transporters would be given due consideration while notifying the Rules. It is regret to note that when an Act is not in operation and Rules are under finalization, AIMTC has made it a demand for their strike which is quite unreasonable.   

             The above position has been explained to the office bearers of All India Motor Transport Congress in various meetings held in the Department of Road Transport and Highways in New Delhi from 2^nd to 4^th January. It would be seen that in most of the cases, the Government is already in the process of taking appropriate action. It was also explained to them that various stimulus packages offered to manufacturing / other industries, is bound to stimulate the demand of other service sectors such as transport. Thus the transport sector has not been overlooked as has been alleged by All India Motor Transport Congress.  

             Under the above circumstances and keeping in view the present situation of the country, the decision of the transporters to continue with the strike is totally unjustified and regrettable, particularly, in the context of great deal of seriousness shown by the Government in taking up the matter to logical conclusion.