Proposed administrative procedure - TR.01
Procedures for collection and distribution of funds for roads
Purpose : To create ethical procedures to obtain funds for creating and maintaining roads.
- The funding of highways/roads development
- Ethical sources of funds for roads
- Proposed procedures to collect funds
- Distributing the funds collected
- MicroToll - a mean for proper toll
- Some technical Issues of Micro-toll
- Draft of the act to create procedure TR.01
The issue of funding in highways/roads development
A clumsy administrative problems wrt roads/highway development are
Today, in year 2004, the procedures/laws for collecting funds are highly unethical --- a large number of non-users or lesser users are forced to pay a large sums for highway development. And the procedure to allocate those funds are discretionary (i.e. Ministers/officers decide based on their whims and personal priorities . . . period) with no criteria. To many highway-enthusiasts, this "uhethicalness" is just a minor issue which MUST be ignored for a larger cuase. But to me, it is necessary that ONLY the road users are made to pay ENTIRE funds needed for roads.
- given a region, deciding which citizen should be made to pay how much for the roads
- Using which type of taxes should the money be collected from various citizens
- how much money should be spent on various sub-regions in that region, and howm much money should be spent on individual road segments inside that sub-region.
- And of the several pending projects to make new roads, which one should be given higher/lesser priority?
On this web-page, I will describe less unethical administrative laws/procedures to collect and allocate the funds. On some other web-pages, I will outline the procedures using which citizens can ensure that funds allocated for highways/roads are used properly.
Unethical and ethical sources of collecting funds for roads
While highways/roads etc are necessary, it is important that road-sector does NOT become burden on those who are lesser users of highways/roads. IOW, ENTIRE funds necessary to build highways MUST be collected from users, and NOT from non-users.
So a FIRM ethic I believe in is as follows : funds for highway/roads should be collected strictly from vehicle owners, and NO ONE else, and it should be in the proprtion of highways/roads they use.
The non-users MUST not be forced/manipulated to pay for the roads/highways they DO NOT use or use sparingly. It is flatly unethical to put burden on non-users. The only exception should be roads/highways in remote areas or roads/highways made in border areas for defense and strategic purposes purposes.
So following mechanisms to collect funds are unethical and hence out of question
Why is a general tax, like income tax, excise, sales tax etc are unethical? Consider excise tax on tobacco. Say 5% of that tax is used for highways. Now benefit to those who have paid this tax, and do not even own a bicycle is too too insignificant compared to those who own a vehicle. So such general taxes makes infrequent users also pay a substancially high charge. This is unethical.
- Using money obtained from income tax, wealth tax and general sales tax (except sales tax on vehicles/petrol) for development of highways is unethical and should be stopped.
- Giving income or other tax breaks to any person for directly/indirectly investing in roads is unethical, and should be stopped. To give a specific example, tax breaks like breaks on infrastructure bonds are unethical.
- Using money obtained for house tax, water tax, education tax, excise on tobacco, octroi etc for development of highways is unethical, and should be stopped.
The ONLY fair/ethical sources of funds for roads/highways I can think of are
The MOST ethical way is toll. This way, ENTIRE cost is borne by the vehicle owner, who cuases wear and tear to the road, and he may pass the cost to the other beneficiaries. But it is impossible to collect tolls on streets and small roads. And collecting a high toll on highways makes the vehicle owners take small streets and roads --- a loose-loose situation. I will later propose a technoligical mechanism by which tolls on small streets and roads can be collected, but that mechanism has technological complexiety, and can take time to implement. If and when collection of tolls on small streets/roads become possible, no charge/tax other than toll would be required, and ALL taxes like vehicle tax, gasoline tax etc can be abolished. But until then, we need sources other than tolls.
- tolls - based on distance and approx weight/size of vehicle
- tax on gasoline
- excise/sales tax on vehicles based on weight/size (NOT based on cost)
- annual vehicles tax based on weight/size
- parking charges
- An additional property tax on plots adjacent to wide roads -- iff the plots are permitted to be commercial, and they are benefitted by the road.
IMO, after toll, next LESS unethical tax is tax on gasoline. And next less unethical is sales/excise tax on vehicle, and annual vehicle tax. Such tax on vehicle should be based on weight, and NOT value of the car. This tax is NOT as fair as toll, as two vehicle owners may NOT be using vehicles to the same extent, yet they would end up paying same tax. The parking charge is ethical and necessary as creating parking space requires acquiring the land, and it is best that those who park vehicles are maid to pay that price.
Proposed procedures to collect funds
At Central Govt level, I propose following procedures can be used to collect funds.
At state/district level, the citizens of state/district may decide to use above procedures at state/district level. eg a state may decide to have a an annual vehicle tax on vehcile, a tax on gasoline and surcharge on tolls etc. A district may also collect an additional property tax on commercial plots adjacent to wide roads. In such cases, the funds will go to state/district govt and citizens residing there would make laws to allocate them.
- The PM will appoint a Roads/Highways Fund Collector
- The Fund Collector will propose to Parliament a sales tax rate on vehicles, annual vehicle tax rate, gasoline tax and a tax on tolls and parking.
- After the approval of MPs, he will start collection.
- The citizens can replace Road Fund Collector using RLPP.
- After the approval of Grand Jurors and Jurors, the Fund Collector can fine the tax evaders.
Distributing the funds collected
Now how "much" highway is used by whom? And from the money collected by Central Govt's Road Fund Collector, how much money should go on which road segments and how much money should go to individual states. And same problem exists at state level --- of the money collectd by State Road Fund Collector, how much funds should go to individual districts?
The ONLY fair criteria I have been able to come up with so far, is what I would call as "vehicle load" on a road segment or roads in a region. I define vehicle load of a road segment as sum of "vehicle_weights * kilometers_tarvelled" by the vehicles on that road segment in a month. And vehicle load of a region would be sum total of vehicle loads of road segments in that region. The criteria I propose regarding distribution of road development fund is based on vehicle load --- the funds collected from gasoline, vehcile tax etc should be allocated to various regions in proportion to their vehicle loads.
The funds collected from toll should go to that road segment's maintainance, and if surplus is left, it should be used to creating additional highway/roads in the same district or districts of same state.
In short, the National/State/District Fund Collectors should distribute the funds to officers in-charge of creating and maintaining roads in the proprtion of vehicle loads borne by those roads.
- Say vehicle load of India is 1000 cr ton-kilometers. Say taxes collected by GoI on vehicles excise, gasoline etc adds up to Rs 1000 cr. Now a state's load is 20 cr ton-kilometers. Then that 5% of the taxes etc collected will be allocated to that state.
- In addition to GoI, say a state decides to impose additional taxes on vehicles (annual vehicle tax), gasoline tax etc and collects Rs 500cr. Say vehicle load in that state is 10cr ton-kilometers. Now say a district's vehicle load is 2cr ton-kilometers. Then that district's share will be 20% i.e. Rs 100cr.
The "vehicle load" formula has one disadvatage --- at some places, due to nature of soil, terrain etc. creating/maintaining roads are more expensive. eg consider a plain area vs a hilly area. In hilly area, creating and maintaining 1km of road will be more expensive than a plain area. The "vehicle load" formula puts such areas at a disadvantage. To rectify, one may multiply vehicle loads with some factors which can capture these differences.
In any case, such formulae, despite all short comings will be superior than allowing funds' allocation as per babu's whims.
MicroToll - a mean for proper toll collection
The draft of the law needed to bring micro-toll is not complicated, installing devices to sensors and receivers on roads and installing transmitters on vehicles. Is this technology feasible? Very much and it exists today itself. The cell-phones haves transmitters by which they transmit a signal to notify their presence. And the receivers using this singles determine the zone in which cell phone lies. This technology has been around for several years. Putting licence plates which will transmit licence number round the clock will be hardly a few hundred rupees per vehcile, and it can run on vehicle's battery.
- The officer in-charge of collecting tolls, namely Toll Administrator, shall provide number plates with built-in transmistters which transmits the license plate number of the vehicle every 5-10 seconds. The signal should be capable of travelling upto a distance 5-6 meters.
- The Toll Administrator shall install two types of equipment near the road---
- infrared sensors with cameras : it will sense a vehicle when it passes over the road, also read the licence plate's number.
- signal receiver : it will receive the signal that is transmitted by the vehicle's licence plate
so if a vehicle-owner has disabled a licence plate so that it does NOT send signals all the time, it can be known.
- Recording the path of a vehicle : Using technology described in 1-3, it can be accurately determined how many kilometers has a car traveled on which road/street segments.
- Calculating the micro-toll : Now each road can be divided into small segments which are just 1-2 km long. And each segment can have its own micro-toll, as determined by the city-council, which will be a say few tens of paise per km per vehicle depending on the vehicle type.
- Collecting the micro-tolls : Using the trace of the vehicle, as reported by the receivers all along the roads, the Toll Administrator can send a listing to the vehicle owner and collect a bill from him.
- Distributing the funds amongst Road Administrators : The Toll Administrator can distribute the funds amongst the Road Developers of in-charge of various regions or raod-segments based on vehicles traveled on each road segment, and tolls collected from those vehicles.
But still, putting sensors, cameras and signal recievers along the roads will be a substantial task. But once accomplished, it has several benefits
Please note that Micro-toll is NOT necessary for the proposal that funds for road development be divided in the proportion of vehicle load. In absence of technological setup needed for micro-toll, rough estimates for vehicle loads can be made, and funds be divided as per the estimates.
- all taxes likes excise tax, sales tax and yearly tax on vehicles can be removed
- vehicle loads of roads can be determined unambiguously, and amount can be distributed without much disputes
- this will also reduce crimes like vehicle theft
- this will also deter many criminal operations where using vehciles is essential
Some technical Issues of Micro-toll
- Is it possible for the owner of the vehicle to temper the transmitter so that it does NOT transmit the licence number and thus he cansave the toll charges?
Ans : In such case, he will get easily caught. When the sensor senses a vehicle, and the digital camera scans and reads the licence plate, and the signal receivers around it do not register any signal for several seconds, that would mean that the vehicle is NOT transmitting the signal. In such case, the sensor can inform the near-by police control room.
- Can one temper the transmitter in the licence plate, which will tranmist a different number? This will enable the car-owner to evade the tolls.
Ans : In such case, he will get easily caught. If the number transmitted by the vehicle is not same as one on the license plate, the system will immidiately detect it. Also, if a vehicle owner is putting someone else's vehicle number, the receivers will note two vehicles with SAME number at two different spots. The control stations would sooner or later detect it. Using this information, the tempered transmitter can be tracked down, and the vehicle owner can be arrested.
- How expensive is this technology?
Ans : The transmiting licence plates will cost below Rs 500, which is less than 0.5% of the car's cost. The road costs around Rs 1cr to Rs 2cr per kilometer. So putting infrared sensors, cameras and signal receivers at say every 100 meters interval will only cost a few lakhs, and so will increase the cost of the road by only by a small fraction.
The above funding strategy will be sufficient for proper funding of roads and highways.
- Making and maintain roads is an expensive activity, and it is necessary that ONLY road users i.e. vehicles owners pay the price in the proportion they use.
- The funds needed for development of roads MUST come mainly from tolls, excise, sales and annual tax on vehicles, gasoline tax and parking charges. It may also come from an additional property taxes on commercial land plots adjacent to wide roads. But the funds for roads MUST not come general income tax, general sales tax and general excise on goods unrelated with vehicles and transportation (eg tobacco).
- The funds collected should be distributed to various Road Developers in the proportion of vehicle loads their regions/roads bear/
Draft of the act to create procedure TR.01
To enact TR.01 at nationa, state and district levels, the citizens need to pass acts in the Parliament, Assembly and District Panchayats respectively. I have written the drafts. To look at the drafts, please click here.
It will be wiser for citizens to first enact procedures LM.01,LM.02 and LM.03, and then use them to pass this act.
To know about procedure LM.01, please click here ,
to know about procedure LM.02, please click here , and
to know about procedure LM.03, please click here.
If you have any other question, please mail it to MehtaRahulC@yahoo.com. Thousand thanks in advance.
Next - TR.02 : RLPP over Road Developers