[sustran] Re: Good Investigative Journalism into Auto Overcharging in
Delhi
Simon Bishop
simon.bishop at dimts.in
Thu Apr 22 14:22:43 JST 2010
Dear Sustrans Colleagues,
Following on from my posting a few days ago on the economics of autos in Delhi, I thought you would be interested to read this collection of articles assembled by the Times of India investigating the reasons behind autos overcharging. It basically backs up the points I was making about winners and losers, but does not identify the gender issue. Hope you enjoy reading the articles.
Simon
The Times of India
[cid:image001.gif at 01CAE209.EF6F43F0] Date: 21-04-2010 | Edition: Delhi | Page: 04
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[cid:image001.gif at 01CAE209.EF6F43F0] SCRAP SCHEME
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[cid:image001.gif at 01CAE209.EF6F43F0]Why autos have hefty price tag
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[cid:image001.gif at 01CAE209.EF6F43F0] Atul Thakur & Amin Ali | TIG
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It's the replacement scheme that has given autorickshaws a hefty price tag, says Yash Pal Arora. We got the reply to Om Prakash Tiwari's RTI application seeking information about how the transport department scrapped autorickshaws.
Tiwari and Arora allege the monopoly of one contractor is responsible for the owner receiving only Rs 5,000 for getting his auto scrapped. A 2008 transport department circular states there should be no restriction on replacement of vehicles even before the expiry of its life - 15 years as laid down by the SC, meaning that an autorickshaw can be replaced even in the first few years. All parts of the auto too have to be intact when it comes for getting scrapped; otherwise the contractor deducts an amount - technically meaning that a missing part may result in deduction of, for instance, Rs 500. However, the same part, if intact, will fetch him the price of scrap, which may be less than even Rs 50.
But why would a person replace an auto for Rs 5,000 when he has spent lakhs and on what basis does the contractor decide the amount paid for scrap? The RTI response indicates that parts of the vehicle are pulled out before it's scrapped. The vehicle is then sold on the basis of scrap earning the driver only Rs 5,000 while the contractor sells its parts in the market, alleges Tiwari.
In two RTIs filed by Tiwari and Rakesh Agarwal, the transport department informed them that they had lost the file regarding the terms and conditions on which the scrapping company will repay the auto owner.
But what does all this have to do with the escalating price of autos? Replacing autos at any age is a win-win situation for everyone - the manufacturer is selling autos, the financiers are getting the price of a new auto, the scrapping unit contractor is making money and the transport officials are also getting their share, says Arora.
The SC decision on the cap initiated the trading in permits. Then came the 15-year age limit and CNG autorickshaws. These two decisions changed the ownership pattern. The auto owners had to take loans from the market
and the financiers came into picture. In the early 2000s, the interest rate was 24% and naturally many owners got caught in the debt trap. The missing EMIs and the penalties resulted in loans ballooning to lakhs and the permits were bought for this unpaid loan and some extra money. Then came the replacement scheme and by now a majority of the autos were controlled by the financiers. A permit holder already owing lakhs of rupees to the financier was offered more money and the permits were bought and the price went up to Rs 2.8 lakh.
Remember, the financiers also have snatched autos or autos on which they have got a settlement from the previous owner. So if any new person wishes to buy a new auto, the snatched auto is sent for scrapping. The financier has paid Rs 2.8 lakh for the permit, which added to the Rs 1.3 lakh official price of an auto and the bribes paid to officials brings the price to about Rs 4.5 lakh.
If we assume the average price of the permit to be Rs 2 lakh and considering 20,000 autos have been replaced between 2007 and 2009, it works out to Rs 400 crore, which is all financiers' black money earning them Rs 1.47 lakh per annum, tax-free, says Nagpal.
toireporter at timesgroup.com<mailto:toireporter at timesgroup.com>
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[cid:image001.gif at 01CAE209.EF6F43F0] THE ECONOMY
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[cid:image001.gif at 01CAE209.EF6F43F0]Owns 91 autos, has resettlement colony address!
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[cid:image001.gif at 01CAE209.EF6F43F0] Atul Thakur & Amin Ali | TIG
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We analysed the registration data of 17,932 autos in the K and L series and discovered that only 27% are registered to a single owner while the remaining 73% had multiple owners.
Because of the irregularity in the database, we had to make some assumptions. For instance, Manjeet Singh becomes Man Jeet Singh, Manjeet, Manjeet Singh Luthra, M S Luthra with all of them living in the same house. Similarly, 23 Vikram Nagar changes to 23 Virat Nagar, and coincidentally the person living at both addresses will have the same name and have an auto registered under his name. We have counted most of these easily distinguishable cases as the same person and the same address.
Extrapolating the data from these nearly 18,000 autos to the 55,000 autos presumed to be in Delhi, it works out that only 14,777 are singleowner autos. If we deduct 5,000 autos which would be single-owner autos free from financiers, 9,777 autos would be single-owner financed autos. Of the remaining, we assumed that like the 9,916 autos of the DL1RK series (see story one), 99% of the autos were financed.
Based on media reports and inputs from various auto drivers and experts, we estimated that nearly 35,000 autos in Delhi ply on two shifts employing 70,000 drivers and the remaining 20,000 are either owner-driven or driven by only one driver totalling 90,000 which is close to the estimated figure of 1 lakh auto drivers in Delhi. Based on inputs from the industry and a report of a government expert committee, we worked out that an average auto makes 10 trips per day in which 120km is covered with the passengers shelling out about Rs 750 against the meter rate of around Rs 600. Similarly, the earnings of a 24-hour auto (run on shifts) is Rs 950 while a evening/night time auto earns Rs 650 from the passengers.
Assuming that two and oneshift autos are evenly distributed among all types of owners, we calculated the total revenue of the auto industry which worked out to a staggering Rs 1,958 crore, equivalent to nearly half of the Delhi government's budget allocation to the transport sector. Of this Rs 1,958 crore, the owners get Rs 814 crore while the drivers earn Rs 615 crore. Considering the standard rate of overcharging, which is nearly 20% above the meter, Delhiites pay Rs 326 crore extra which is nearly half of the drivers' earning.
Now considering multiple autorickshaws owners, it works out that if a person owns three or more autos, his monthly income is about Rs 31,000 which goes up to Rs 8.5 lakh for 69 autos, which is the average number of autos owned by people owning more than 50 autos each.
So, who are these multiple auto owners? We analysed the registration number data of nearly 20,000 autos and found that 17 out of the 39 addresses having more than 40 auto registrations are in lower middle class or resettlement colonies. It stretches credulity a little to believe that a person owning 91 autos lives in a resettlement colony.
Clearly, there is some problem with the government data or these owners are linked to the financier. Doing a random check of the addresses of a financier, we found that 31 autos are registered to the same address. Perhaps the officials of Delhi government's anti-corruption bureau should have questioned these people, instead of raiding random financiers and reporting that they could not find them. At the very least, the government should be able to question these people on how they managed to own so many autos and how much tax they pay.
toireporter at timesgroup.com<mailto:toireporter at timesgroup.com>
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