The new Road Safety and Transport Bill 2014 also proposes a fine of Rs 5 lakh per vehicle as well as imprisonment for faulty manufacturing design, besides cancellation of licences for rash and negligent driving.
The Bill, unveiled today by Road Transport and Highways Ministry for seeking suggestion from stakeholders, proposes penalty of up to Rs 1 lakh or imprisonment for six months which may extend to one year or both in case of using vehicle in unsafe conditions.
First offence for drunk driving will attract "Rs 25,000 fine, or imprisonment for a term not exceeding 3 months, or with both, and a six-month license suspension. Second offence within three years will result in Rs 50,000 penalty or imprisonment for up to one year or both and a one year license suspension.
"Any subsequent offence shall result in the cancellation of the licence, and impounding of the vehicle which may extend for 30 days," it said.
If school bus drivers are caught driving drunk, Rs 50,000 fine will be imposed with imprisonment for three years while "immediate cancellation" of licence will take place in case of drivers in the age-group of 18 to 25 years involved in such incidences.
Causing death of a child in certain circumstances will result in "Rs 3 lakh fine, and imprisonment for a term not less than 7 years" while violating traffic signal three times will result in Rs 15,000 fine, licence cancellation for a month and a compulsory refresher training, the draft Bill said.
It also provides for graded point system for imposing fines.
The ministry has sought comments from public and stakeholders on the Bill and will thereafter finalise it for presentation to Parliament during the ensuing winter session.

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