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12 Feb 2024·Source: The Indian Express
4 min
EconomyNEWS

Toll collection by states to hit record high by FY26

Rajasthan, UP, and Maharashtra are leading states in toll collection growth.

Toll collection by states to hit record high by FY26

Photo by Bruno Bergher

Toll collection by states like Rajasthan, Uttar Pradesh, and Maharashtra is expected to reach a record high in FY26. The improved economic activity and infrastructure development are contributing to the increased toll revenue. The toll collection is expected to reach ₹50,345 crore.

Key Facts

1.

Toll collection by states is expected to reach a record high in FY26.

2.

Rajasthan, Uttar Pradesh, and Maharashtra are key contributors to toll revenue.

3.

Improved economic activity and infrastructure development are driving the increase.

4.

The projected toll collection is ₹50,345 crore in FY26.

UPSC Exam Angles

1.

GS Paper 3 (Economy): Infrastructure development, government policies, and investment models.

2.

Connects to the syllabus topics of infrastructure, investment models, and government policies related to road transport.

3.

Potential question types: Statement-based, analytical questions on the role of toll collection in infrastructure financing.

More Information

Background

Toll collection has a long history, evolving from simple fees for road usage to sophisticated systems managed by both public and private entities. Early forms of tolling can be traced back to ancient civilizations, where rulers charged fees for passage through roads and bridges. The modern concept of tolling gained prominence during the industrial revolution with the development of extensive road networks. The National Highways Act of 1956 marked a significant step in India's highway development, though it didn't initially focus heavily on tolling. Over time, tolling policies have evolved to address funding gaps in infrastructure development. The introduction of the Public-Private Partnership (PPP) model in infrastructure projects has led to increased reliance on toll collection as a revenue source. This model allows private companies to invest in road construction and maintenance in exchange for the right to collect tolls for a specified period. The revenue generated through tolls is used to recover the investment and ensure the upkeep of the infrastructure. The NHAI (National Highways Authority of India) plays a crucial role in managing and regulating toll collection on national highways. Several regulations and guidelines govern toll collection in India. The Ministry of Road Transport and Highways sets the policies related to toll rates, collection methods, and exemptions. The toll rates are typically linked to the length of the road and the type of vehicle. There are also provisions for periodic revisions of toll rates to account for inflation and maintenance costs. The use of technology, such as FASTag, has streamlined the toll collection process, reducing congestion and improving efficiency. The legal framework ensures that toll collection is transparent and accountable, with mechanisms for addressing grievances and disputes.

Latest Developments

Recent years have seen a significant push towards expanding and improving India's road infrastructure. The Bharatmala Pariyojana, launched in 2017, aims to develop a network of highways and expressways across the country. This project has led to increased construction activity and a greater focus on toll-based revenue models. The government is also exploring innovative financing mechanisms, such as infrastructure investment trusts (InvITs), to attract private capital for road projects. The adoption of electronic toll collection systems, particularly FASTag, has revolutionized toll collection in India. FASTag uses RFID (Radio Frequency Identification) technology to automatically deduct toll charges from prepaid accounts, reducing waiting times and improving traffic flow. The government has mandated FASTag for all vehicles using national highways, leading to widespread adoption and increased efficiency. This has also improved transparency and reduced leakages in toll revenue. Looking ahead, toll collection is expected to play an increasingly important role in financing infrastructure development in India. The projected increase in toll revenue reflects the growing economy and the expansion of the road network. The government is also considering the introduction of new tolling technologies, such as GPS-based tolling, which could further improve efficiency and reduce costs. However, challenges remain, including land acquisition issues, environmental concerns, and the need for effective regulation and oversight.

Frequently Asked Questions

1. What are the key facts about toll collection by states that are important for the UPSC Prelims exam?

For the Prelims exam, remember that toll collection by states is expected to reach ₹50,345 crore in FY26. Rajasthan, Uttar Pradesh, and Maharashtra are key contributors to this revenue. The increase is driven by improved economic activity and infrastructure development.

2. What is driving the increase in toll collection by states like Rajasthan, UP and Maharashtra?

The increase in toll collection is primarily driven by two factors: improved economic activity leading to more vehicles on the road, and significant infrastructure development, particularly in road networks. Projects like Bharatmala Pariyojana have contributed to this growth.

3. What is the projected toll collection by states in FY26, and which states are the leading contributors?

The projected toll collection by states in FY26 is ₹50,345 crore. Rajasthan, Uttar Pradesh, and Maharashtra are the leading contributors to this revenue.

4. How does increased toll collection impact common citizens?

Increased toll collection can lead to better-maintained roads and new infrastructure projects, which benefits citizens through improved transportation. However, it also means citizens pay more for using roads, potentially increasing transportation costs.

5. Why is the topic of increased toll collection by states in the news recently?

The topic is in the news because toll collection by states is expected to reach a record high in FY26. This is due to improved economic activity and infrastructure development, making it a significant economic indicator.

6. What is the historical background of toll collection in India?

Toll collection has a long history, evolving from simple fees for road usage to sophisticated systems managed by both public and private entities. Early forms of tolling can be traced back to ancient civilizations. The modern concept of tolling gained prominence during the industrial revolution.

Practice Questions (MCQs)

1. Consider the following statements regarding toll collection in India: 1. Toll collection by states is expected to reach a record high of ₹50,345 crore by FY26. 2. Improved economic activity and infrastructure development are contributing to the increased toll revenue. 3. The National Highways Authority of India (NHAI) is solely responsible for toll collection on all national and state highways. Which of the statements given above is/are correct?

  • A.1 and 2 only
  • B.2 and 3 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: A

Statement 1 is CORRECT: The news explicitly states that toll collection by states is expected to reach ₹50,345 crore by FY26. Statement 2 is CORRECT: The news mentions that improved economic activity and infrastructure development are contributing factors. Statement 3 is INCORRECT: While NHAI is responsible for national highways, state governments collect tolls on state highways. Therefore, NHAI is not solely responsible for all toll collection.

2. Which of the following statements accurately describes the function of FASTag in toll collection?

  • A.It uses GPS technology to track vehicle movement and calculate toll charges based on distance traveled.
  • B.It employs Radio Frequency Identification (RFID) technology to automatically deduct toll charges from a prepaid account.
  • C.It relies on manual scanning of vehicle registration numbers to process toll payments.
  • D.It utilizes blockchain technology to ensure secure and transparent toll transactions.
Show Answer

Answer: B

Option B is correct. FASTag uses RFID technology to automatically deduct toll charges from a prepaid account, improving efficiency and reducing congestion at toll plazas. Options A, C, and D are incorrect as they describe alternative technologies or methods not used by FASTag.

3. Which of the following is NOT a likely impact of increased toll revenue for state governments?

  • A.Increased investment in road infrastructure development and maintenance.
  • B.Reduced dependence on central government funding for infrastructure projects.
  • C.Enhanced fiscal autonomy and flexibility in budget allocation.
  • D.Decreased focus on public transportation systems within the state.
Show Answer

Answer: D

Option D is the correct answer. Increased toll revenue would likely lead to increased investment in road infrastructure and greater fiscal autonomy for state governments. It is less likely to cause a decreased focus on public transportation, as both road infrastructure and public transport are important for overall connectivity and economic development.

Source Articles

India’s Highway Toll Collection Set to Hit All-Time High in FY26 as These 5 States Lead the Industrial Charge

The Indian Express·12 Feb 2024

With UP, Rajasthan & Gujarat topping the user fee listing, FY25 toll collection headed for a new record | India News - The Indian Express

The Indian Express·12 Feb 2024

From the historic Grand Trunk Road to the nation’s longest highway — Country’s top 10 toll plazas collect Rs 14,000 crore in 5 years | Business News - The Indian Express

The Indian Express·12 Feb 2024

Toll collection on national highways: UP tops the list with `756 cr revenue | India News - The Indian Express

The Indian Express·12 Feb 2024

Almost Rs 12,000 crore collected as toll on Jaipur-Delhi highway, MP asks: ‘Why should common man pay when condition so poor?’ | India News - The Indian Express

The Indian Express·12 Feb 2024

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