Maha Bharat: Episode 40

Why do Inter-State Check Posts exist?

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Imagine 2 people that have come together to get married – the wedding rituals, flowers and people congratulating the happy couple. Easy to imagine, right? but this is not happening in a religious place or a wedding hall. The bride and the groom are standing on the two sides of a line … a state border!

Exactly on the border of two states is an interstate check post, and here the happy couple gets married. The staff at the check post claps for them!

Crazy, but true. Earlier this year, with the restrictions on travel due to the COVID-19 pandemic and the lockdown. Unable to meet, many couples got married in cabins that are situated on state borders. These cabins are called Interstate check posts.

But why do they exist? In this episode, we try and answer this question.

Show Notes

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Links to clips used in this episode —

Full Transcript of Episode 40 –

Two people have come together to get married — imagine the wedding rituals, flowers and people congratulating the happy couple. Easy to imagine, right?

Just one thing. This is not happening in a religious place or a wedding hall. The bride and the groom are standing on the two sides of a line…a state border!

Exactly on the border of two states is an interstate checkpost, and here the happy couple gets married. The staff of the checkpost claps for them!

Crazy, but true. Earlier this year, there were restrictions on travel due to the COVID-19 pandemic and the lockdown. Unable to meet, many couples got married in cabins that are situated on state borders — for instance, in Kumily, at the border of Tamil Nadu and Kerala. These cabins are called Interstate checkposts. 

Shaadi toh khushi-khushi ho gayi, but these checkposts have not always been a source of happiness. Remember before the pandemic, when you travelled between states by road, you must have seen a long line of trucks at these checkposts. In recent times, people travelling between states have had to stop at these checkposts and ask for travel permits. Hours and hours are spent here, waiting for inspection. 

Bahar se dekh ke lagta hai: what’s happening here? Why such a long line? 

Andar ki kahani — that’s what we’ll talk about today. Inter-state travel ka mamla, the long lines at state borders and mainly, this: why are there checkposts between states?

Doston, the distance from Gujarat to Kerala is about 1700 kilometers. If you wanted to travel this distance in a car, it would take you 38 hours. 2 din samajh lijiye. 

Now, if you wanted to travel from Tamil Nadu to Kerala in a truck with maal-saman, how long do you think it would take? These are two states which are next to each other, by the way. Here’s the answer: before 2017, it might have taken you four days.

Strange, right?

I’m not joking, though. This is a real incident, jaha pe a traveller was transporting construction material from Tamil Nadu to Kerala. Inspection of the material, document and his truck took a total of 4 days!

What these check posts did, can be understood from this example. But remember, we’re talking about an era before GST.

Now, at this time, If you’re entering or leaving the state with any cargo…samaan jise aapne khareeda hai, ya becha hai…then there are certain formalities that you have to do. Firstly, if you’re selling these items, then there’s a sales tax that you will pay. In this case, the person was transporting construction materials — depending on the amount of this, he would be charged a tax for the transportation. These are called “freight (फ्रेट) charges”. 

When you’re travelling with cargo, there are also forms that you need to fill and sign in advance, for leaving or entering a state. For safety purposes, the trucks or other vehicles are also often inspected. And all of this is done at check posts, by the check post staff. 

You could say that these check posts are like inspection points on borders. There are also check posts on the border between India and our neighbouring countries — like the ones on the India-Nepal border. These are called integrated check posts. Of course, these check posts are extremely important because this is a matter of security for the country. 

But taxes are not the only purpose of check posts. Like I said, after 2017, the rules of GST changed. Aisa nahi tha ke you don’t have freight charges anymore — but, the structure of these charges has changed. And most importantly, the method of paying them has changed, too. You can now do the formalities online, in most states. 

So, what happens to the check posts now?

Like I said, check posts matlab — inspection. And can you think about a recent situation that would require inspection at state borders? Yep – the lockdown. Closed check posts, including the Walayar check post, opened up for inspection of travellers. If you travelled between states during the lockdown you know that you had to issue an e-pass. Officials at these check posts inspected the e-pass and other related documents. Iske alava bhi, you will notice check posts between some states that inspect for minerals and forest material that you may be carrying — to ensure that there is no illegal environmental damage.

But, don’t confuse a check post with a toll plaza. Though both might look similar, toll plazas are only for collecting a toll for driving through certain roads. And check-posts, as we know, are used for inspection and collection of tax!

Doston, waise aaj ka sawal toh check posts par hai, yes. But what is it that we are really talking about? Not about a few chowkis between states. But about a bigger question that these check posts are a part of. 

The question of trade, travel and…bureaucracy — yanni naukarshahi ya babudom!

This is something we have all experienced. Who among us hasn’t spent hours at government offices, or had trouble getting official documents approved? Now imagine spending days on the road, simple waiting in lines. An old report even said that a truck moved at the speed of 11 kilometres an hour from Mumbai to Kolkata — all because of delays at check posts!

Now, we keep talking about these delays faced by trucks…but why is it important? 

Doston, mudda yeh hai: free and easy trade within any country is important for its economic prosperity . When I say free, I am not referring to trade that is free of cost, but that aisa vyapar which is free of barriers. Delay in delivering of goods costs crores to our industries, and slows down activity!

There are several barriers to inter-state trade, and some you might already know…like the structure of taxes and tolls on the road, poor-quality highways, the ban on transport of some specific commodities. But there are also barriers to road transport jiske barein mein shayad humne kabhi socha hi nahi hoga. For instance, did you know that in many cases, the truck drivers who carry cargo drive slowly on the roads, on purpose?

This happens because of how truck owners pay truck drivers. In many cases, there is a fixed amount of money given to the drivers for fuel for the journey and if the driver exceeds that amount of fuel, then it is deducted from their salaries. So, many drivers tend to drive slowly, to try and use as little (kam-se-kam) fuel as possible and save that money.

And this is only one example!

Yeh kehna galat nahi rahega, that one of the biggest barriers to inter state road transport in our country is what is often called the “inspector raj”. In simple words, I’m referring to the practice of inspection by government officials at different stages of industrial activity. 

So, imagine a truck of raw material travelling from…maan lijiye, Tamil Nadu to Kerala, like the example we heard about before. These raw materials, we can assume, are required by a company’s factory unit to manufacture goods (mal-saman). But because of a delay at check posts, the truck reaches its destination a week late. This delays production — causing a slow down in the whole manufacturing cycle. Some manufacturers were so fed up with check posts, that they would instruct truck drivers to take the longer route, to avoid check posts!

Let me put all of this into numbers for you. In 2002, a report showed that the cost of waiting at these posts was Rs. 20,400 crore — nearly 1% of the GDP at that time! 

In spite of this loss, check posts continued for many, many years. Why?

Pehli baat toh yeh hai, that in our country, check posts were the most ideal way to collect taxes. After 2017, the system of taxes ko online kar diya gaya hai. But think about it yourself: how many traders in the informal sector, from smaller towns, have access to the internet?

Aur check posts ka ek aur important role tha, which we don’t realize: the information collected at Inter state check posts in the form of pakka documents were used to calculate data about imports from different producers and sales across states. 

And collecting data is an important step, right? But here’s an interesting fact: This problem of checkposts existed even in the European Union but the countries of the European Union abolished all check posts in 1993. A single tax, like the GST was introduced, and a new system was introduced to collect information about road transport. 1993 — more than 20 years ago! So what stopped us?

And that’s where we come back to the inspector raj culture. 

Doston, ask yourself a question: how many times have you had to run around collecting documents for approval — for travelling, getting a drivers licence, or even if you wanted to start a small company? Chalo, documents sab jud gaye. But now, how many more rounds of approval and inspection before you can finally get your work done? And how much money have you spent in the process? If you know what I mean.

Basically, this is what we mean by inspector raj. 

Before 1991, the world for us Indians was very different. There were even tighter restrictions for industrialists. Government permissions and approval was necessary to set up any business at all, or conduct any kind of trade. 

With liberalization and new reforms being implemented in 1991, we were able to do away with most of these rok-tok. Matlab? Simple: the process of issuing licences and government permission for running business or conducting any trade was made simpler. What we called as the era of “licence raj” came to an end. But the multiple rounds of inspections and approvals…whether it’s in government offices or on the roads, continued. 

And I’m not the only one saying that!

Raghuram Rajan, our former RBI governor, said that licence raj may have gone with the new reforms of 1991, but inspector raj still hasn’t. He suggested that a system of self-certification, with a simple round of checking by the government authorities, will help entrepreneurs and the industry in our country. Venkaiah Naidu, our Vice-President, too believes this. 

Dilchaspi ki baat toh yeh hai, ki when asked, he said the roots of our inspector raj culture might be in the steps taken by our former Prime Minister Indira Gandhi, when she introduced socialist ideals into our government. Yeh sach hai ya nahi, I’ll leave that to you to decide. 

And for a very long time, these check posts, too, were a part of this inspector raj world.

Until 2017. 

[We hear the voice of Rajyavardhan Rathore praising GST]

That’s right — In 2017, GST was imposed. The “One Nation, One Tax” (please say this in English) brought a lot of changes in the structure of our taxation. But one of the biggest was this: sales tax that is to be paid on inter-state movement of goods was removed. 

Aur jaise ek hi jhatke mein, another decision was taken:

[We hear a news report about the removal of check posts]

Inter-state checkposts for taxes — which we have been talking about for all this time, were removed from almost all states in the coming months (aane wale mahino mein).

Why’s that? Simple: pehle yeh hota tha, that every time any goods were sold to someone in a different state, a sales tax had to be paid when they were being transported. Tax ke saath aata tha heavy paperwork, which was checked at chowkis at the state borders — the interstate check posts. 

Now, there was no need for trucks full of cargo (saaman) to stop at state borders and pay taxes — so, 22 states simply removed these check posts!

If that sounds like a small administrative step to you, listen to this: the abolishment of these interstate check posts saves the country ₹2300 crore every year! This is the amount that was lost because of the hours and hours of truck delays. Aur haan, truck ki baat karein toh, the travel time for these trucks have reduced by 20% because there are no check posts to go through anymore!

This was seen as a welcome step from truck-drivers and traders across the country. Lekin ab taxes ka kya?

This isn’t a worry, because not only has the method of collecting taxes changed, but the system too. How?

Suppose: as a company trading with another state, you paid a sales tax before, you will pay an Integrated Goods and Services now. Isse IGST bhi kaha jaata hai. But the most interesting thing? No long lines at check posts anymore — you can pay IGST online, through an e-way bill. 

Several states have already imposed the e-way bill, and others are in the process. Some states have even ordered officials at state borders not to stop any trucks! 

Surely, this is one step away from our old inspector raj. But one can’t help but think: if it was so easy to get rid of interstate check posts that caused us so much trouble, why did we have them for so long?

Certainly something to think about.

Let’s come back to the present day. 

Since we have been talking about inspector raj in various parts of our administration, yeh sahi nahi rahega if I don’t tell you about the progress we have made in the past few years. It is slow, but steady.

Small steps are being taken in other industries too — to reduce inspection and regulations. For instance, in the telecom and Information Technology Sector. I’m talking about something that’s only happened a couple of months ago, in November. The Department of Telecommunications made a welcome announcement: companies in the IT and Telecom sector, called Other Service Providers, no longer have to follow most of the strict regulations of the department! 

For instance — did you know that these companies had to deposit a guarantee of ₹1 crore for registration? The new guidelines remove this requirement. Now, these companies do not have to go through a long process of registration and frequent inspection. They have even been allowed to work from home, permanently. 

Baat toh humne check posts se shuru ki thi, and now we’ve reached the IT sector. 

Doston, what we can understand from this is that different sectors of our country are united by common threads – of bureaucracy, regulations, and even of new revolutions in the country, like the Goods and Services Tax. 

Well…thanks to GST, check posts don’t stop trucks and create delays anymore. But they’re not completely redundant yet. Like we heard, inter-state check posts were used to check travel permits during the lockdown. But if your permit wasn’t approved, the same check posts were also a perfect place to get married to someone across the border!

That’s it from me for this episode. I hope we learnt something new, like every time. See you next week, with a brand new episode of Maha Bharat!

Credits

Narrated by – Dhruv Rathee
Producer – Gaurav Vaz
Written by – Anushka Mukherjee and Gaurav Vaz
Edited by – Medha V
Title Track Design – Abhijith Nath
Audio Production – Madhav Ayachit