PR No – 17
11th December, 2023
India Takes Stride Towards Safer Roads and Cleaner Environment with Nationwide Rollout of Automated Testing Stations for Vehicle Fitness Certification: PHD Chamber
As per a report titled ‘Driving towards Efficiency: The Transformative Potential of Automotive Testing Stations in India’, jointly prepared by the PHD Chamber of Commerce and Industry and Ernst & Young LLP, the private sector is likely to play a crucial role in setting up the Automotive Testing Stations (ATS) network in the country.
India’s growing vehicular population has led to poor air quality, road accidents, and health hazards due to emissions from older vehicles. The report outlines that to address these issues; the Ministry of Road Transport & Highways has amended the Central Motor Vehicles Rules, 1989 to include provisions for ATS which can improve fuel efficiency, road safety, air quality, and capacity building.
The collaborative report aims to mitigate challenges and strengthen the newly envisaged Automotive Testing Stations (ATS) regime of the Government of India. To this end, the report examines global best practices for vehicle fitness policies such as the European Union’s roadworthiness package launched, United Kingdom’s Ministry of Transport (MOT) test, and Japan’s vehicle inspection System.
For a successful implementation of the ATS regime in India, there are certain financial feasibility concerns such as a deficit in overall cash flow and various regulatory issues that would need to be addressed for a robust inspection and certification regime equipped with new and modern technologies.
The report was released during the address of the Managing Committee Members of PHDCCI by Shri. Rajesh Kumar Singh, IAS, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), Government of India.
Shri Sanjeev Agrawal, President, PHDCCI, Dr. Ranjeet Mehta, Executive Director, PHDCCI, Former Presidents, PHDCCI, Managing Committee Members, PHDCCI and Senior Officers from E&Y were present during the release of the report at PHD House, New Delhi.
The financial simulation of the Automotive Testing Stations (ATS) regime in India was conducted using a standard two‐lane model, with revenue estimated mainly based on the testing fee prescribed by the Ministry of Road, Transport and Highways. Major expenses were estimated based on capital expenditure, land, loan interest, and workforce. Regulatory concerns included the non‐inclusion of motor vehicles other than transport vehicles, the mandate of being a test‐only facility, the insufficient nominal fee scale for testing vehicle fitness, and the need for coordinated action from all stakeholders to maintain the vehicle inspection regime, said the industry body.
The report concludes key recommendations for mitigating the challenges in the Automotive Testing Stations (ATS) regime, divided into fiscal and regulatory categories. Regulatory recommendations suggested included incorporating non‐transport vehicles in the scheme of annual/biennial fitness testing, bringing testing frequency on par with global best practices, requiring coordinated action by the union government and states, effective enforcement through fines and minimum testing/inspections, and revising testing fees every three years.
While fiscal recommendations suggested in the report included granting subsidies on capital expenditure, revenue augmentation through revision in testing fees, alternative incentives like Service‐linked Incentive (SLI), customs duty waiver, salary and Employee Provident Fund (EPF) reimbursements, concession on lease rental expenses, subsidy on land and stamp duty exemption, and power and water subsidy.
PHD Chamber of Commerce and Industry