The Hindu Business Line : Cargo controls

The strike by truck operators, which began in the early hours of Monday, could not have been timed worse. For the past three months the Government has been scrambling to support an economy that is fast heading downhill and all energies are focussed on getting it back on track. The idling of a majority of the country’s truck fleet is bound to cause disruption in trade leading to big losses across the economic chain. But why the strike in the first place?

The truckers are demanding a cut in diesel price by Rs 10 a litre, reduction of tyre prices by at least 35 per cent, moratorium on repayments and waiver of interest on truck finance for at least six months, waiver of toll charges and, finally, free movement of all vehicles across the country without national/State permits and taxes. In short, they want a “bailout” package of their own. There is little doubt that they need some help: cargo movement has thinned in tandem with the fall in economic activity. But, then, so does every other sector and it is simply not possible for the Government to cook up a “bailout” package for all of them. That is precisely why the Government came up with the two-instalment stimulus package aimed at perking up overall economic activity. Anyway, one of the demands — diesel price cut — could be fulfilled soon as the Government has promised to review fuel prices. It is difficult to see how the Government can accede to the other demands such as cut in tyre price, waiver of toll-fees or moratorium on repayments.

What the Government can do though is make passage of trucks easier across the country. There is enough justification in the demand for doing away with the permit regime. It is difficult to understand why there should be bureaucratic controls on the movement of goods across States of one country, when we have the example of the European Union where goods movement is free across Schengen countries subject to specific Customs restrictions. Controls such as national and State permits and different State-specific taxes and levies not only result in the hold up of trucks at State borders, increasing costs across the chain, but also encourage corruption. The Schengen experience has shown that cargo movement across countries is faster, smoother and there are no traffic queues at borders; in contrast, we have long queues of trucks waiting at State check posts for hours on end just to produce the permit to enter the State or pay up a levy. This is one demand of the truckers that is justified.

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