toll reform

Why toll reform is needed

• Toll collection on National Highways has become perpetual, even after the recovery of construction and maintenance costs.

• Rates are revised annually (3% + WPI-linked), without an independent review mechanism.

• Toll collections have risen sharply (₹1,046 crore in 2005–06 → ₹55,000 crore in 2023–24), with a substantial share going to the Consolidated Fund of India even after concession periods end.

• Motorists often face congestion, poor road quality, and incomplete stretches under construction despite paying toll.

Public Accounts Committee (PAC) Recommendations

(Report tabled in Parliament, August 12, 2025)

1. End perpetual tolling

   • Discontinue or reduce tolls once capital costs + Operation and maintenance O&M costs are recovered.

   • Beyond cost recovery, tolling should only continue if clearly justified and approved by an independent oversight authority.

2. Independent Regulatory Authority

   • Establish a specialised authority to ensure transparency, fairness, and accountability in toll fixation, collection, and monitoring.

3. Toll reimbursement during construction

   • Highway users should be compensated/refunded if road stretches are under construction or partially closed.

4. FASTag reforms

   • Despite high adoption, bottlenecks persist due to malfunctioning scanners.

   • Set up on-location service kiosks at plazas for motorists to:

     • top-up balance,

     • buy new FASTags,

     • replace faulty devices.

Current Legal Framework

• National Highways Act, 1956:

  • Section 7 → allows levy of user fee.

  • Section 9 → Union government makes rules.

• National Highways Fee (Determination of Rates and Collection) Rules, 2008:

  • Fees levied by govt. (public projects) or concessionaire ( Build Operate Transfer (BoT), Toll-Operate-Transfer (ToT) or developed under Infrastructure Investment Trust).

  • Amendment in 2008 → toll in perpetuity (even after concession, tolls go to Consolidated Fund).

Ministry’s Response

• Acknowledged PAC’s concerns.

• With NITI Aayog, has initiated a comprehensive review of toll policy.

• Study will consider:

  • vehicle operating costs,

  • road damage by vehicles,

  • user willingness to pay,

  • rational fee determination framework.

Key Takeaway

The PAC’s recommendations push for a shift from revenue-maximisation to user-centric accountability in tolling. Ending perpetual tolling, ensuring refunds during disruptions, and improving FASTag efficiency could restore fairness in highway use and build trust among commuters.