The government has decided to impose road safety tax ranging from Rs 250 to Rs 2,000 from August 1. The new tax will be Rs 250 for two-wheelers, Rs 1,500 for cars and vans, and Rs 2,000 for heavy vehicles.

According to official sources, the road safety tax will be utilised to pay compensation to those injured in accidents as well as families of accident victims. Transport Minister K N Nehru announced the decision in the Assembly last month.

During 2008-09, the government spent Rs 102 crore on compensation to victims of road accidents, involving buses of state transport corporations. In order to minimise accidents involving government buses, Rs 1.2 crore has been allotted this year to state transport undertakings to honour drivers with accident-free records.