
Traffic penalties based on income levels would be both effective and equitable

Summary
- India should adopt a progressive scale for traffic fines to ensure that these can deter everybody equally regardless of economic status. This is a fair and implementable way to make our roads safer.
India’s current traffic fine system enforces a uniform monetary penalty, regardless of an offender’s income. For example, a billionaire and a low-income individual may be fined ₹500 for the same violation.
While this amount is negligible for the billionaire, it can significantly burden the less affluent. This approach unintentionally places an unequal burden on economically disadvantaged individuals and fails to act as an effective deterrent for wealthy offenders. Such a system amplifies social disparities in a country marked by stark income inequality.
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It also fosters a sense of injustice and a casual attitude toward traffic laws, particularly among the well-off, who often view fines as minor inconveniences; this contributes to reckless driving and an alarming rise in road accidents. These problems can be addressed through income-based fines or progressive penalties.
The idea behind progressive fines is to align penalties with an offender’s financial capacity. This approach ensures that the consequences of violations are meaningful for everyone, irrespective of income, creating equality of impact rather than equality of penalty amounts.
This would be an equitable and just legal framework. Countries like Finland, Switzerland, Sweden and the UK have implemented income-based fine systems, achieving notable success in reducing traffic violations and promoting fairness.
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Finland introduced its ‘day-fine system’ in 1921, where fines are calculated based on daily disposable income, making penalties proportionate to the offender’s financial status. In one notable case, former Nokia executive Anssi Vanjoki was fined €116,000 for speeding. Sweden followed suit in 1931, adopting a system that considers both the offence’s severity and the offender’s financial situation, effectively reducing violations with minimal resistance.
Similarly, the UK applies income-based fines, where traffic penalties are linked to weekly earnings and the seriousness of the offence. Speeding fines, for example, can reach up to 175% of a driver’s weekly income, with penalties potentially exceeding £2,500. Switzerland employs a similar system, adjusting fines based on daily income and the severity of offences. In one extreme case, a Swedish driver was fined over $1 million for speeding.
The effectiveness of these systems lies in their ability to deter violations across all income levels. Countries with progressive fines have achieved safer roads and better public compliance. Inspired by these successes, Canada’s British Columbia province is considering a similar framework to address the disproportionate burden of flat-rate fines on low-income individuals.
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India can draw valuable lessons from these international examples. Adopting an income-based fine system could involve integrating traffic enforcement with existing digital infrastructure. The Registration Certificate (RC) of vehicles is linked to Aadhaar numbers and also to the PAN database (for taxation), enabling access to the vehicle-owner’s income the previous year.
Traffic police officers may use existing digital challan devices for this. By entering the offending vehicle’s RC number, the system can fetch Aadhaar and PAN details to determine the owner’s income slab.
With the government’s income-tax slab system (under the new regime) acting broadly as a benchmark, this is how slab-based penalties could work:
Slab A: If the vehicle owner’s annual income is less than ₹4 lakh, the standard fine could apply.
Slab B: If the person earns between ₹4 lakh and ₹12 lakh, the fine could be double the standard.
Slab C: If the income is between ₹12 lakh and ₹24 lakh, the fine could be triple.
Slab D: If the income is between ₹24 lakh and ₹1 crore, four times the standard fine could apply.
Slab E: If the offending vehicle’s owner earns above ₹1 crore, the fine could be 10 times.
Similarly escalating slabs could be devised for vehicles owned by corporate entities and other organizations.
For individuals, those without a PAN card or have no income tax records could be made to pay the standard fine. This would ensure that the vast bulk of our population that is not in the tax-paying bracket does not suffer disproportionate penalties. If an offence is committed by a low-income driver of a wealthy person’s car, then the penalty system would have to ensure that it’s the RC holder who bears the fine.
Thankfully, India’s technological advancements and Aadhaar-PAN linkage provide the necessary infrastructure for a progressive fine system.
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Such a system would be beneficial on several fronts. Fairer penalties would end disgruntlement among the less fortunate over being made to pay fines that set them back severely. Those behind the steering wheels of vehicles owned by the wealthy would be incentivized to comply strictly with our traffic laws.
On the whole, traffic mishaps would reduce and lives would be saved. All this could be highlighted in public awareness campaigns designed to gain support for such an equitable approach to traffic-rule enforcement. After all, it is in everybody’s interest to deter reckless driving, and deterrence needs to be effective.
The mechanism needed for it could operate autonomously, without day-to-day coordination between the central and state governments. Revenue generated from higher fines could fund road safety initiatives.
With its vast population and diverse challenges, India has an opportunity to pioneer a traffic-fine system that reflects the realities of its social and economic landscape. Progressive fines offer a practical and just solution to our traffic-management challenges. Such a system would favour safer roads, responsible driving and a more equitable society on the whole.
The authors are, respectively, deputy commissioner, Delhi Police; professor of finance at XLRI Xavier School of Management and BJP leader; and undergraduate student of economics, Jesus & Mary College, Delhi University.