India’s national highway network is expanding rapidly, but so are the challenges faced by travellers at toll plazas. Issues like varying toll rates, long queues, and lack of transparency have made road travel inconvenient. To address these concerns, Union Minister for Road Transport and Highways, Nitin Gadkari, has announced the implementation of a Uniform Toll Policy. This policy aims to ease the burden on commuters while ensuring sustainable development and maintenance of highways.
Let’s take a closer look at what this policy entails and its potential benefits.
What’s Happening?
The Indian government is working on a Uniform Toll Policy to provide relief to commuters on national highways. Recently, Nitin Gadkari highlighted the inconsistencies in the current toll system, which often results in higher payments for travellers. To resolve this, the government is preparing to introduce a standardised toll framework.
Additionally, to make toll payments more convenient, authorities are also considering introducing annual and lifetime toll passes.
New Initiative to Simplify Road Travel
According to a The Times of India report, the Ministry of Road Transport and Highways is developing a new plan that could further simplify toll payments for commuters. Under this initiative, two new toll pass options might be introduced:
Annual Toll Pass: For a one-time payment of Rs 3,000, commuters will be able to travel on national highways and expressways without interruption for a full year.
Lifetime Toll Pass: For a one-time payment of Rs 30,000, this pass will be valid for 15 years, eliminating the hassle of repeated toll payments.
These passes will be integrated into the existing FASTag system, ensuring that travellers do not need additional devices or extra expenses.
Toll Revenue in India
Private vehicles account for about 60% of total traffic on national highways but contribute only 20-26% of toll revenue. Despite the high number of private vehicles, their share in toll revenue remains relatively low.
India’s Toll Collection Over the Years
In 2023-24, India’s total toll collection reached Rs 64,809.86 crore, a 35% increase from the previous year. This growth reflects the expansion of the 1,46,195 km-long national highway network and improved toll management. Back in 2018-19, toll collection stood at just Rs 25,154.76 crore.
What’s in It for Investors?
The rise in toll revenue is creating new investment opportunities. A Uniform Toll Policy will enhance toll collection efficiency, benefiting fintech companies that offer FASTag services. As FASTag adoption increases, these companies could see higher earnings.
Moreover, toll revenue will be used for infrastructure development, including road construction and highway projects. This could benefit construction firms, as they will receive more projects, boosting their business growth.
What’s Next?
According to government estimates, India’s total toll collection could surpass Rs 70,000 crore in 2024-25 and is projected to reach Rs 1,30,000 crore by 2029-30. This growth will be driven by the expanding highway network and an increase in traffic volume.
With these developments, India’s road infrastructure is set to become more efficient and commuter-friendly in the coming years.
*This article is for informational purposes only. This is not investment advice.
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