The Motor Vehicles (Amendment) Act, 2019, which came into effect at the beginning of this month is making headlines, thanks to the steep fines for violation of traffic rules. Some state governments have opposed it, primarily because of the provision of higher penalties. The Gujarat government, for instance, has decided to reduce penalties for a number of offences including not wearing a helmet and seatbelt. While the Act has several provisions, such as the constitution of a motor vehicle accident fund to provide compulsory insurance cover to all road users and the possibility of developing a national transportation policy, it’s the higher level of penalties that is being debated the most.
The idea is that higher penalties will lead to better driving discipline and help make Indian roads safe. It’s true that the quantum of punishment does affect human choices. Economist Gary Becker, for instance, in his Nobel lecture (1992) narrated that while running late for an examination many years ago, he had to quickly decide whether to park his car in the parking lot or leave it illegally on the street, and possibly pay a fine. Becker calculated the possibility of paying a fine, the size of the penalty and the cost of going to the parking lot. In the end, he decided that it paid to take the risk and leave the car on the street. It is reasonable to believe that common people violating traffic rules also make such calculations. It is possible that if the penalty and the possibility of getting penalised were reasonably high, Becker would have arrived at a different conclusion. News reports show that the number of violations, at least in the national capital, has come down significantly because of the higher penalties.
But sustaining this may require more than just fixing fines arbitrarily. Some states are clearly not comfortable with the level of penalties. In order to avoid such differences and confusion, the Centre should have provided the basic structure of the Act and left it to the states to take a call on implementation details. It is possible that this law might be more effective if penalties are decided by states, depending, for example, on the per capita income.
Further, it is not clear how all state governments will ensure that the law is effectively implemented to make roads safer. Law enforcement with limited resources is always a challenge. A new research paper by economists Abhijit Banerjee, Esther Duflo and others, published by the National Bureau of Economic Research, looks into this problem. In Rajasthan, sobriety checkpoints of police stations were either kept fixed at the best location or rotated among three locations. While fixed checkpoints didn’t show any significant impact, rotating checkpoints helped reduce night accidents by 17 per cent and night death by 25 per cent. This clearly shows that the police need to use resources more effectively. Higher penalties for violating traffic rules will itself not help if policing is not effective. The police should also use more technology, which will not only help reduce monitoring cost over time but also eliminate the possibility of people being harassed and lead to better results.