The Hindu explains: The Motor Vehicles (Amendment) Bill, 2017

The new Bill takes into account taxi aggregators, third party insurance and computerisation of licensing authorities.

Updated - December 04, 2021 10:42 pm IST

Published - July 19, 2018 04:10 pm IST

 A file picture of traffic in New Delhi.

A file picture of traffic in New Delhi.

In the year that the Motor Vehicles (Amendment) Bill was first introduced, India saw 1.5 lakh deaths from road accidents, according to the ‘Road Accidents in India, 2016’ report by the Ministry of Road Transport and Highways. In 2017, when it was reintroduced, there had been a marginal decline in that number, but the loss of lives from road accidents remains high in the country.

To make roads safer, the Centre in consultation with State Transport Ministers came up with this Bill to amend the Motor Vehicles Act, 1988. The Motor Vehicles (Amendment) Bill, 2017 was passed by the Lok Sabha on April 10, 2017, and is pending in the Rajya Sabha. The Upper House is expected to take up this Bill for debate and passing in the ongoing Monsoon Session.

The new Bill takes into account taxi aggregators, third party insurance, computerisation of licensing authorities, and so on. It also provides for a National Road Safety Board.

Here’s a look at the changes it seeks to bring in.

Removal of intermediaries

Anyone visiting their local Road Transport authority will understand how difficult it is to obtain a driving licence without the help of touts. The Motor Vehicles (Amendment) Bill seeks to redress this by taking the process online. Tests for driving licences will be automated, and learner’s licences will be issued online.

However, State governments oversee RTOs right now. The government has not yet created clear guidelines on how States will have to adopt this new Bill.

New fines

The existing fines for breaking road rules have been increased in this Bill. Here are some of the proposed fines:

(Source: Press Information Bureau)

Driving licences

While under the 1988 Act, a driving licence is valid for 20 years until a person turns 50, and for five-year periods after the age of 50, under the new law, more categories have been created.

A driving licence issued to a person under the age of 30 is valid till the person turns 40. For those who receive licences between the ages of 30 and 50, the licence will remain valid for 10 years. If the licence is issued between 50 and 55 years, it will be valid until the person turns 60, and above 55 years, licences will carry a five-year validity.


The Bill defines aggregators as “a digital intermediary or market place for a passenger to connect with a driver for the purpose of transportation.”

The 2016 Bill required State governments to issue licences to aggregators such as Uber or Ola as per “guidelines as may be issued by the Central Government,” but when the Bill was reintroduced in 2017, it became optional for State governments to follow central guidelines. One of the issues with the original Bill was that it did not mention what the central guidelines would cover.

Aggregators, however, now have to be compliant with the Information Technology Act, 2000.

Aggregators are as yet unregulated in India, and this Bill seeks to change that.

“Regulation of aggregators should be left to states,” says Sai Ratna Chaitanya Gurugubelli, associate - transport Planning, Urban Works Institute, a network partner of the Institute for Transportation and Development Policy. “It is only fair that the Centre lets States control their own urban transport. This only adds to their existing jurisdiction on road transport.”

He adds that States have earlier used Central government rules to formulate their own. “However, given the State’s jurisdiction on this matter, they should formulate their own policies to use aggregators to their full potential. Just as they control transport undertakings and autos, States should step up and regulate aggregators on their own terms.”

Third-party insurance

The 2016 version of the Bill had capped the payments to be made under third-party insurance. The 2017 Bill has removed that cap.

Vehicle recall

The new Bill provides for the recall of vehicles if the defective vehicle is a danger to the environment, the driver or other road users.

The manufacturer will then have to reimburse all buyers with the full cost of the vehicle, replace the defective vehicle, and if necessary pay a fine as specified by the government.

So far, manufacturers were at the helm of product recalls. The introduction of this clause means the industry will have to shift from a voluntary code to something that is legally enforceable.

Solatium Fund

The 1988 Act already has a Solatium Fund for victims of hit-and-run accidents, but the new Bill has also provided for another Fund. Earlier, the Bill said that the Fund would be credited with a cess or a tax, but that provision has now been removed, and instead the money will come either from the government, or from a grant or loan.

While questions have been raised in Parliament about why a new Fund was necessary, the government has not come up with a reply for this, except that this Fund would disburse more money.

The old Act provided ₹12,000 for grievous injury and ₹25,000 for death, while the amendment Bill provides ₹50,000 for grievous injury and ₹2 lakh or more for death.

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