MoRTH Initiates Review of Toll Pricing Principles

The Ministry of Road Transport & Highways (MoRTH) has initiated a significant policy exercise by directing NITI Aayog to undertake a detailed review of India’s three-decade-old tolling framework to design a modern and equitable user-fee structure that better reflects current traffic patterns, operating costs, vehicle configurations, road conditions and other factors that have evolved substantially since the framework was first conceived.

India’s existing tolling regime is rooted in assumptions dating back to 1995 and is governed by the National Highways Fee (Determination of Rates and Collection) Rules, 2008. Despite annual revisions based on the Wholesale Price Index (WPI), the core methodology for computing base toll rates has remained largely unchanged. At present, tolls are calculated on the basis of (construction cost + maintenance + permissible profit) divided by estimated traffic volume, a static formula that does not adequately capture modern usage dynamics or asset performance.

To modernise this structure, NITI Aayog, in collaboration with academic institutions and sector specialists, is re-examining the key parameters underlying toll pricing through empirical studies and updated modelling techniques. The review includes a recalibration of Vehicle Operating Cost (VOC), a reassessment of the Vehicle Damage Factor (VDF) to more accurately attribute pavement wear across vehicle classes, and a renewed evaluation of Willingness to Pay (WTP) to ensure tolling structures remain financially viable while reflecting user affordability and market behaviour.

Rapid advancements in vehicle technology, shifting axle-load patterns, enhancements in highway construction quality, and evolving user expectations have widened the gap between contemporary realities and the legacy pricing framework. These changes have made the need for reform both urgent and essential.

This review signifies a broader shift from a static, cost-based tolling philosophy to a dynamic, performance-linked model designed to more accurately reflect real-world usage and asset quality. Any policy reforms emerging from this exercise are expected to have far-reaching implications for PPP concession frameworks, NHAI’s revenue strategies, and the overall trajectory of India’s road monetisation programme.