Tolls Keep India From The Fast Lane

Country Struggles Within Its Own Borders To Improve Trade

(Christian Science Monitor)  To get a package from New York to Colorado by road takes four days, he says, and SafeExpress makes the route from Delhi in the north to the southern city of Thiruvananthapuram in four days. "The difference here is that, while the distance is about the same, we pay six different taxes, stop at 28 different checkposts to pay dues, and we fill out documents in eight different languages." In an industry where time is money, all those stops cut into profit margins.

In the past year, some Indian states have abolished their border taxes and put in place a value-added tax on every purchase of manufactured consumer goods in stores, everything from electronics to potato chips. Most states have adopted the VAT, but only two have stripped away the other redundant taxes.

Anurag Mehra, an analyst at Positron Avis Services in New Delhi, says that changing the tax system is only one way to cut the cost of transportation.

Another way is to computerize border checkpoints, and to give truckers smart cards that carry all their data. Signals from these smart cards could be accessed by truck owners to know how far the truck is from its destination. And government authorities could automatically withdraw the appropriate toll or tariff without forcing the truck to stop.

"India is seeing exponential growth, so we should be seeing amazing change in the transport industry," says Mehra. "But unfortunately, in the real world, whatever was true 50 years ago is the same today."

Near the border checkpoints for Rajasthan state, a trucker named Jamshed Khan stops to take a bath at a water pump outside a restaurant.

With chattering teeth, as the water evaporates in the dry desert air, he counts the tolls and taxes he will have to pay on his three-day journey from New Delhi to Surat in the western state of Gujarat. He'll pass through four checkpoints over the 750-mile journey, paying 1,000 rupees ($22) at each post, spending an hour or more at each stop.

"It's a big hassle," he says with a grin. "I'm just taking raw cloth to Surat, and then I bring a truck full of finished clothes back to Delhi."

Bribes Come Out Of Pocket

Pooran Kirpal Singh is taking Coca-Cola products from a plant in the north-central state of Uttar Pradesh down to the thirsty citizens of Jaipur in Rajasthan, paying 160 rupees ($3.45) in toll tax at the Shahjahanpur checkpoint, plus hundreds more in excise tax. All of these costs are paid by the truck's owner, he says, but if a corrupt tax authority at one of the checkpoints demands a bribe to allow an overloaded truck to pass, Singh has to pay that amount out of pocket.

"I've been working 15 years in this same job, and the waits have gotten longer and longer," Singh says. "Now that business is getting better, there are more trucks on the road, but that just means a longer wait at every state checkpoint."

But in true Indian entrepreneurial spirit, Singh's pain is another businessman's opportunity. At the Shahjahanpur checkpoint, there is a shop selling freshly boiled milky tea; another selling cold sodas; another selling chips and snacks; another offering telephone facilities for truckers to call home; and even a shop offering legal services.

A Rupee Per Photocopy

Thirteen-year-old Sol Singh runs a photocopy machine off a car battery, with only a piece of tin sheet serving as shade. On a good day, he makes about 100 rupees, charging a rupee per page.

A giant truck, painted with bright flowers and stacked high with bales of cotton, stops in front of young Singh's photocopy machine, and a driver hops down with a handful of papers to copy.

"This is a good day," grins Singh.