Context: The Motor Vehicles (Amendment) Bill, 2019, which seeks to amend the Motor Vehicles Act, 1988, has been passed by the Rajya Sabha.  

Key highlights: 

Compensation for road accident victims: The central government will develop a scheme for cashless treatment of road accident victims during golden hour. The central government may also make a scheme for providing interim relief to claimants seeking compensation under third party insurance. 

Motor Vehicle Accident Fund: The Bill requires the central government to constitute a Motor Vehicle Accident Fund, to provide compulsory insurance cover to all road users in India. 

The fund will be utilised for: (i) treatment of persons injured in road accidents as per the golden hour scheme, (ii) compensation to representatives of a person who died in a hit and run accident, (iii) compensation to a person grievously hurt in a hit and run accident, and (iv) compensation to any other persons as prescribed by the central government. 

This Fund will be credited through: (i) payment of a nature notified by the central government, (ii) a grant or loan made by the central government, (iii) balance of the Solatium Fund (existing fund under the Act to provide compensation for hit and run accidents), or (iv) any other source as prescribed the central government.

Good samaritans: The Bill defines a good samaritan as a person who renders emergency medical or non-medical assistance to a victim at the scene of an accident.  The assistance must have been (i) in good faith, (ii) voluntary, and (iii) without the expectation of any reward.  Such a person will not be liable for any civil or criminal action for any injury to or death of an accident victim, caused due to their negligence in providing assistance to the victim. 

Recall of vehicles: The Bill allows the central government to order for recall of motor vehicles if a defect in the vehicle may cause damage to the environment, or the driver, or other road users. 

The manufacturer of the recalled vehicle will be required to: (i) reimburse the buyers for the full cost of the vehicle, or (ii) replace the defective vehicle with another vehicle with similar or better specifications.

National Transportation Policy: The central government may develop a National Transportation Policy, in consultation with state governments.  The Policy will: (i) establish a planning framework for road transport, (ii) develop a framework for grant of permits, and (iii) specify priorities for the transport system, among other things. 

Road Safety Board: The Bill provides for a National Road Safety Board, to be created by the central government through a notification. The Board will advise the central and state governments on all aspects of road safety and traffic management including.

Offences and penalties: The Bill increases penalties for several offences under the Act. 

Taxi aggregators: The Bill defines aggregators as digital intermediaries or market places which can be used by passengers to connect with a driver for transportation purposes (taxi services). These aggregators will be issued licenses by state. Further, they must comply with the Information Technology Act, 2000.

Issues with the bill:

1. With a Fund already existing to provide compensation for hit and run accidents, the purpose of the new Accident Fund is unclear. 
2. State governments will issue licenses to taxi aggregators as per central government guidelines. Currently, state governments determine guidelines for plying of taxis.  There could be cases where state taxi guidelines are at variance with the central guidelines on aggregators. 
3. While the penalties for contravening provisions of the proposed scheme on interim relief to accident victims are specified in the Bill, the offences that would warrant such penalties have not been specified.  It may be argued that imposing penalties without knowing the nature of the offences is unreasonable.
4. States also have concerns about their powers being curtailed in the Motor Vehicle (Amendment) Bill.