March 16: Bengal has stopped issuing luxury taxi permits to applicants other than beneficiaries of a government scheme, curtailing the assembly line of commercial vehicles joining app-cab platforms like Uber and Ola.

In the past six months, issuance of permits has been restricted to unemployed ST, SC, OBC or below-poverty-line applicants below the age of 45 under the Gatidhara scheme.

The official line is that this is meant to keep vehicular load on Calcutta roads "within limits" and ensure that the benefits of the app-cab revolution are equitably distributed.

"We want more youths to apply through the Gatidhara scheme. They will get priority. The rest can wait," a senior official of the transport department said.

But private taxi operators and aggregators argue that the government's decision to restrict the number of permits has widened the gap between demand and supply in the city's app-cab market. "Users automatically reap the benefits of a larger supply of cabs on our platform but that isn't happening now," said an official of an app-cab aggregator.

Surge pricing on app-cab platforms had shot through the hood during the Dol Jatra-Holi weekend. On Sunday evening, the fare estimate for a 3km Uber ride from Chandni Chowk to Loudon Street was Rs 550.

Several taxi owners said the contours of the app-cab business would change if more permits were made available. Users would benefit in terms of pricing and the earnings of driver-parners could increase because of higher demand, they projected.

The opposite could be true as well. The bottom end of app-cab pricing was never viable. Neither were the incentives once offered to driver partners. The worst-case scenario is that an increase in the supply of app cabs could drastically reduce demand and fares, throwing many driver partners out of business.

The Mamata Banerjee government had launched the Gatidhara scheme in 2014 to create a new generation of transport operators out of a large, unemployed youth bank in a state bereft of industry. The scheme offers financial help up to 30 per cent of the ex-showroom price of a small commercial vehicle - maximum of Rs 1 lakh - to unemployed youths.

In the first three years since Gatidhara started, luxury taxi permits were offered to those opting for the scheme as well as applicants who chose to buy vehicles with their own funds or loans taken independently.

This changed when the government sought to increase the number of beneficiaries under the scheme. Around 1,300 centres were set up across the state to fast-track Gatidhara applications. Allocation of funds for the scheme was raised too.

The allocation for 2016-17 rose to Rs 75 crore from Rs 52 crore in 2015-16.

The number of beneficiaries targeted also shot up from 5,240 in 2015-16 to 7,500 for the current fiscal.

Sardar Amjad Ali, a senior advocate at Calcutta High Court, said the decision to selectively issue permits for contract carriage could end up in a legal tangle.

"According to the West Bengal Motor Vehicles Rules, anyone can apply for a contract carriage permit whenever the state transport authority decides to issue them. The authorities cannot say that permits would be given only under the Gatidhara scheme."

Sources said the policy of "selective preference" had triggered complaints about automobile dealers offering to get applications processed if the applicants purchased vehicles from them.

This reporter called a south Calcutta car dealership posing as a prospective buyer of a commercial vehicle and was told that he would have to pay between Rs 12,000 and Rs 15,000 to get enrolled in an employment bank, one of the mandatory clauses for an offer letter under the Gatidhara scheme.

"Once the application is cleared, you will have to pay another Rs 15,000 out of the subsidy that you would get from the government," the salesperson said.

Officials of the transport department said they had plugged the gaps. "We have made it clear that candidates can reach us directly if they have all necessary documents," an official said. "You do not need to fall into a trap."

The government has capped issuance of contract carriage permits within Calcutta and its adjoining areas at 15,000 a year.