Home > News > India > FASTag collection policy will offer the best value to highway users

Over the past years, motorists have become used to spending at least 15-20 minutes crossing a user-fee plaza on national highways. Some past studies have assessed that the nation loses about 60,000 crore annually in terms of fuel and time loss due to the waiting time at the user-fee plazas.

With this backdrop, it is imperative for the government to work towards taking steps to reduce the time taken to cross a user-fee plaza. A prudent solution to the problem involved adopting technology, which reduced the waiting time and allowed the vehicle to pass through without stopping. Some potential technologies in the area that were evaluated include traditional swipe-based credit with a transaction time of 40 seconds, near-field communication (NFC) cards with transaction time of 12 seconds, and radio frequency-based cards (RFID) which takes 3-4 seconds.

Given the fastest transaction time, it was no wonder that the government adopted RFID technology under ‘FASTag’ to declutter the national highways and offer better services to road user. The above coupled with the potential to significantly reduce cash transactions at the user-fee plazas, could boost the government’s initiative for digital payments. These were the significant benefits envisaged for the adoption of this technology. Since adoption, this programme has witnessed exponential growth over the years and now contributes over 50% of the total user-fee collection at plazas from a mere 2% in 2016.

With the government’s already-announced plans for making FASTags compulsory across user-fee plazas on national highways, except for one cash lane (on each side), the number of vehicles having FASTags have already crossed more than 10 million and are expected to grow further. High FASTag penetration has also ushered a new era of transparency in user-fee collection. It is understood that the increase in FASTag penetration has coincided with a rise in user-fee collection, leading to the conclusion that FASTag is also helping in controlling leakages in user-fee collection.

With an aim to offer even better services to the end-user, the authorities have collaborated with various state agencies to enable FASTag-based payments at non-national highway user-fee plazas.

However, perhaps the biggest benefits of the programme lie in the non-user fee related avenues associated with FASTags. For example, FASTags linked with GST e-way bills could enable authorities to track a vehicle’s entry across boundaries without physically blocking the vehicle. They could also enable state authorities to track commercial vehicles that have deviated from their permissible routes. Some agencies are planning to offer FASTag-based payments at fuel stations.

Even the above initiatives are just a tip of the iceberg of the programme’s potential, and it is imperative for policymakers to keep up the momentum and explore new avenues with the programme. For example, FASTag can offer distance-based tolling across highways and enable users to pay only for the distance they have travelled. FASTags can offer variable tolling rates at selected stretches and enable authorities to vary traffic volumes as per requirements. FASTag can be a non-obtrusive payment mode for electric vehicle charging stations. We are optimistic that the programme will receive the desired support and upgrades to enable it to offer the best value to Indian highway users.

Kushal Singh is Partner, Deloitte India

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