In conversation with Bal Malkit Singh, Chairman – Core Committee, AIMTC
The trucking sector, also known as the backbone of the economy, amidst the coronavirus pandemic has spilled blood, sweat, and tears to stay afloat. However, despite being severely bruised, the sector has been on its toes and served the nation day and night. To have an in-depth analysis of the woes faced by the trucking sector, Logistics Insider reached out to Mr Bal Malkit Singh, Chairman – Core Committee, All India Motor Transport Congress (AIMTC). The non-profit, non-political, apex body founded in 1936, today represents 93 lacs truckers across the country. In this exclusive chat, Mr Singh paints out a very raw image of the trucking sector, its current situation, the aids expected and provided by the government, his forecast for the trucking or commercial vehicle sector for the current fiscal and much more. Excerpts follow:
Throw some light on the role played by the road transportation sector in the economy of India. What more reforms and policy do you expect from the government that will aid the sector and lead to a faster economic recovery?
The strategic importance of the road transport sector cannot be under-estimated, which is amply demonstrated now while maintaining the continuity of the supply chain and ensuring that communities have access to food, medical care and other essential commodities. This sector is providing yeoman’s services to police, doctors and paramedics. The Road Transport Sector of India is one of the critical sectors of the economy and highly unorganised and marginalised. It is supposedly the “Backbone Of The Economy” and the “Lifeline Of The Country” providing “essential services” to the “Common Man” – 365 days of the year and 24 hours a day. It is the highest employment generator as 85% of the Transport Community constitutes small operators having one to five trucks.
The enormous contribution of the road transport sector to the Indian economy may be appreciated as under:
• This sector is one of the highest tax-payer to the exchequer and is also one of the largest employment generators in India. There are more than 1crore trucks plying across the country, carrying approximately 65% of the freight volume.
• More than 85% of the trucking community comprises of 1 or 5 truck owners, and the majority of them are the owner cum drivers, who toil under severely stressful working conditions to earn the bread and butter for their family.
• It contributes about 3.1% to the GDP of India
• Including the families of these transporters and the people engaged in the allied trades of this sector, the Road Transport Industry is the source of livelihood for more than 20 crore people in India.
Its health, which is pinned as the barometer of the economy, has in fact deteriorated amid lockdown and in essence, it is on the ventilator and is in dire need of oxygen to survive. All the transport segments, both cargo and passenger, are under Acute Financial Stress due to the Coronavirus crisis.
We expect the government to provide minimum rescue package encompassing policy, functional, legal and technological reforms in this sector so that the present regressive regime governing this sector paves the way for an efficient, transparent and corruption-free road transport ecosystem.”
We also expect the government for a demand-push economic stimulus package that will create disposable income and spur consumption in the economy.
I believe, the above will go a long way in securing livelihood and economic revival in the country.
Earlier, the Maharashtra Government had exempted tax for commercial vehicles in the state till 30th September. How has this initiative taken by the state worked in the favour of the already exhausted and struggling trucking sector?
This is one of the best initiatives taken by any of the State Government in the country with respect to the Road Transport Sector. It was a concerted effort of AIMTC that bore positive results. We have had a number of virtual as well in-person meetings, representations and regular follow-ups with Sh Anil Parab, Minister of Transport, Govt of Maharashtra and Shri Satej (Bunty) D. Patil, Member of the State Legislative Council (MLC) & Minister of State for Home (Urban), Housing, Transport, Information Technology, Parliamentary Affairs & Ex. Servicemen Welfare, Govt. of Maharashtra positive results finally come forth for the good of the transport sector.
In a major relief to the transport sector, the state government waived the annual road tax payable by all transporters and commercial vehicle owners in Maharashtra for six months, since April 1, 2020. The benefit to the Transport fraternity, having more than 11.41 lakh vehicles registered in the State, will be to the tune of `700cr which is facing unprecedented challenges on account of the Covid-19 pandemic and needed much needed relief for sustenance. The decision of the Maharashtra Government is indeed exemplary and praiseworthy.
How has the outbreak of the coronavirus further drawn a line between the small and larger players of the largely unorganised trucking sector?
All segments of the road transport sector – organised or unorganised – are impacted by the outbreak of the coronavirus, enforced lockdowns and poor demand in the market on account of poor consumption. Worst impacted are the ones in the unorganised segments who were earlier also hand-to-mouth and with ever-rising operating cost, no relief in statutory compliances, corruption and motivated hefty penalties are all taking a toll on their survival.
Unable to Recover Running Costs, Losses Mounting as Diesel Prices Rise Sharply, unabated corruption on the roads and low demand in the markets is making operators stop their vehicles. Furthermore, there has been no relief from the Government to this sector post lockdowns and the high operating costs cannot be passed to consumers as is widely perceived as the freights depend on Demand & Supply Forces.
This is an abridged and edited version of the interview. To read the full interview, click here.