The Cabinet's nod to a Bill seeking to amend the Motor Vehicles Act 1988 will empower state governments to appoint regulators to fix fares and freights, besides facilitating compensation from the insurance authorities.

"An enabling provision has been made to allow state governments to appoint independent regulators for fixing fare and freights," Minister of Road Transport and Highways T R Baalu said in a release in New Delhi on Friday.

The Bill would be introduced in the ongoing session of the Parliament, he said. Vehicle owners who were seeking transfer of registration of their vehicle from one state to another would benefit from the amendment as it would now be possible to get refund of pro rata unutilised one-time tax paid on non-transport vehicles, Baalu said.

Through the amendment, the government proposed to rationalise compensation for road accident victims by introducing the clause of out-of-court settlement.

"In addition, structured compensation formula is also being made more liberal to attract claimant to claim under Section 163 A of the MV Act on a no-fault basis," he said.

The amendment seeks to increase maximum compensation from Rs 4,80,000 to Rs 12 lakhs (Rs 1.2 million), besides seeking to facilitate compensation from insurance authorities easily, the minister said.

The Bill would also have provisions to implement measures for instilling better road discipline among drivers to ensure safety of road users.