More Compensation for India’s Accident Claims Thanks to Reforms

Amendments India’s Motor Vehicles Act, 1988 have meant that there will be more compensation for those making accident claims, new reports have shown. According to the latest official statistics from the Indian government, over 100,000 people were killed in road accidents in India in 2006 and nearly half a million were injured. That means one accident per minute and a fatal one every five minutes.

The plan for amendments to the Motor vehicles Act form part of a national effort to control accidents, due to be introduced in the coming session of parliament. They include suspending the licence of a drunk driver on the spot for up to three months. There were around 460,000 road accidents in the country in 2006, Minister of Shipping, Road Transport and Highways T.R. Baalu stated, killing 105,749 people and injuring nearly 500,000. At 2000 prices, the losses due to road accidents were Rs.550 billion (nearly $14 billion) a year, which amounted to 3% of India's GDP, Baalu told the consultative committee of MPs attached to his ministry.

With the amendments to the Motor Vehicles Act, 1988, "the penalties for various traffic offences are proposed to be enhanced substantially to make it more deterrent", Baalu said.

"We have proposed that the authorised enforcement authorities may suspend on the spot the driving licence of a drunken driver for a period up to three months and we are also proposing to introduce civil liabilities of a driver by providing penalty up to Rs.5,000 if one drives a motor vehicle in a rash or negligent manner, causing injury to a person or damage to property."

Another amendment proposes to raise the interim compensation to accident victims to Rs.100,000 in case of death or permanent total disablement and to Rs.50,000 in case of permanent partial disablement, the minister said. The claimants will be paid within three months from the date of filing the application in the Motor Accident Claim Tribunal (MACT) or civil court.

"We are also providing that the MACT or civil court shall try to finally dispose off the claim for compensation within a period of two years from the date of its filing," added Baalu.

The ministry is designing new model inspection and maintenance centres to be set up by state governments for inspection of motor vehicle, with the centre said to be giving financial assistance to set them up. The government will also soon approve the Sundar Committee's proposal to earmark at least one percent of the money generated from the cess on diesel and petrol for a road safety fund, Baalu said, adding "the committee's proposal for creation of an apex body, the National Road Safety & Traffic Management Board, is also being processed at the highest level."

The committee to look into the matter of promotion of road safety in educational institutions through Road Safety Clubs has given its report and a scheme costing Rs.1.2 billion during the 11th plan (2007-2012) has been formulated and sent to the Planning Commission for approval.

The Motor Accident Claims Tribunals have been constituted by different State Governments, for the speedy disposal of third party claims, in accordance with Section 110 of the M V Act 1939. Such tribunals are presided over by a person of the rank of a District Judge or High Court Judge. Only a nominal fee has to be paid for instituting a case and the court fee is not based on the value of the suit.  Thus, poor third party claimants are not prevented from making proper claims. All third party claims for personal injury and property damage have to be filed with the tribunals.