Toll policy may see a revamp after 30 years
The ministry of road, transport and highways has appointed NITI Aayog to look at the current situation and recommend changes, a senior government official told ET.
The current fee structure draws on norms set in 1995, which are based on three parameters (vehicle operating cost, vehicle damage factor and users’ willingness to pay).
Current base rates date back to the 2008 National Highways Toll Rules and toll rates are revised annually from 1 April based on the wholesale price index (WPI). However, the basic formula for determining base rates has not changed.
“NITI Aayog is expected to review the existing charging criteria and recommend effective user fee models in line with changes in the last 30 years,” the official said.
User Fee ReviewAayog has appointed academic institutions to review highway user fee norms and will submit its recommendations to the highway ministry by the end of this financial year
The Aayog has appealed to academic institutions to re-examine user fee determination criteria and is likely to submit its recommendations to the road ministry by the end of the current financial year.
The official said changes in the operating cost of vehicles, vehicle damage capacity and stronger payment acceptance due to improved highways necessitated a review of the base rate structure.
Tolls are determined by the total cost of building and maintaining the road plus the profit margin, which is then divided by the estimated number of vehicles that will use the road. Vehicle operating costs are included in the total cost that toll revenue must cover over time and are therefore an important component in determining toll charges.
Vehicle Damage Factor (VDF) is used to measure the relative damage a vehicle inflicts on its pavement structure. It is taken into account in the design and maintenance of roads and is a fundamental concept in determining fair user charges (fees).
Willingness to pay is the maximum price a user is willing to pay to use the toll road. It helps set prices that ensure financial sustainability for the use of public utilities and services.
India currently has around 855 toll booths on its national highway network; of these, 675 are publicly financed and 180 are operated by concessionaires under public-private partnership models.
India’s toll collection stood at ₹73,000 crore in 2024-25 and is expected to touch ₹80,000 crore in the current fiscal; A strong collection of ₹ 40,433.16 crore was recorded in the first six months, compared to ₹ 34,088.88 crore in the same period last year, an increase of 18.6%.
