Parliamentary Panel Calls for Rationalisation and Independent Oversight of Toll Collection on National Highways

The Public Accounts Committee (PAC) has called for significant reforms in the levy and collection of tolls on national highways, raising concerns over the practice of “perpetual tolling,” where user fees continue even after project costs are recovered.

The PAC highlighted that toll charges currently escalate by three per cent annually, irrespective of highway quality, traffic volume, or affordability for users. The panel recommended rationalising and substantially reducing toll charges on stretches where costs have been recovered and suggested the establishment of an independent authority for tariff fixation.

The PAC has recommended the creation of a specialised tariff authority, modelled on the Airports Economic Regulatory Authority (AERA), to oversee toll fixation. Such an authority would be tasked with ensuring transparency and fairness in toll fixation, collection and regulation. It would also be responsible for reviewing and determining the periodicity of toll revisions based on defined parameters.

Currently, tolls are governed by the National Highways Fee (Determination of Rates and Collection) Rules, 2008, which permit annual rate hikes of 3% plus partial indexation to the Wholesale Price Index (WPI).

The PAC flagged the absence of an institutional mechanism to evaluate whether toll charges reflect actual costs or service requirements. It also criticised the collection of tolls when highways remain incomplete or under expansion.

The PAC urged that users be refunded toll charges in such circumstances, stressing that fees are justified only when roads are “fully developed, safe, and usable.”

The panel has proposed a technology-based system for automatic toll refunds or waivers, integrated with the FASTag network.

While FASTag adoption has expanded nationwide, the panel noted that bottlenecks persist due to malfunctioning scanners at toll plazas. It recommended setting up on-site facilities for motorists to top up, buy, or exchange FASTags.

The PAC also pushed for a real-time monitoring system at toll plazas, integrating live traffic data, queue lengths, lane usage, and projected delays to improve efficiency and reduce congestion.

The Ministry of Road Transport and Highways (MoRTH), while acknowledging the concerns, informed the PAC that it has launched a comprehensive study with National Institution of Transforming India (NITI Aayog) to revise the framework for user fees. The study, which will also involve technical input from Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIMs), aims to comprehensively review base rates, inflation indexing, vehicle operating costs, and users ‘willingness to pay’.

The PAC further called for a review of all existing contracts and publicly funded toll plazas that permit toll collection beyond the cost recovery period. While acknowledging that higher toll charges may be justified during the concession period, the panel stressed that continued collection thereafter must be supported by clear rationale to protect user interests and uphold principles of equity and fairness.

The PAC’s recommendations, if implemented, could fundamentally reshape India’s tolling regime by tying user fees to actual recovery costs, embedding accountability through a new tariff authority, and leveraging technology for fairness, efficiency, and transparency.