FASTag Annual Pass: Authority may face ₹4,500 crore burden, says ICRA

By: Mainak Das
| Updated on: 27 Aug 2025, 08:39 am Share via: ICRA projects a dent in NHAI revenue if the agency starts fully compensating the toll fee collection firms. <div class="imgWrapper" data-item-event="image_clicked" data-ga-widget="Image Interactions" data-ga-label="https://auto.hindustantimes.com/auto/news/fastag-annual-pass-authority-may-face-rs-4-500-crore-burden-says-icra-41756259377495.html" data-ga-action="Image Clicked" data-item-element="image" data-item-story-title="FASTag Annual Pass: Authority may face ₹4,500 crore burden, says ICRA” data-item-target-url=”/auto/news/fastag-annual-pass-authority-may-face-rs-4-500-crore-burden-says-icra-41756259377495.html” data-item-story-segment=”Others”> ICRA projects a dent in NHAI revenue if the agency starts fully compensating the toll fee collection firms. Get Launch Updates on Notify me The government of India introduced the FASTag Annual Pass earlier this month, on August 15, for private non-commercial vehicles. The FASTag Annual Pass comes with a validity of one year or 200 transactions, whichever comes first. The FASTag Annual Pass will be applicable on about 1,150 toll collection booths on national highways and expressways, allowing users to cross 200 toll plazas in a year for a one-time payment of ₹3,000. The facility has received an overwhelming response from the national highway users across the country, with more than five lakh users subscribing to the pass in just four days after launch. Immediately after launching the FASTag annual pass, the National Highways Authority of India (NHAI) said in a circular that it adopted a uniform compensation mechanism for user fee collection agencies, which aims to compensate the agencies for the differences in user fee collections. NHAI stated that this mechanism will be for existing contract agreements as well as for bids invited in the next three-month period. After three months, when the annual pass usage at each toll plaza is available, the bidders will be informed about these annual pass figures in the bid document and will be asked to bid duly accounted for the annual pass and thereafter no compensation will be given. NHAI explained that the number of non-commercial cars, vans, and jeeps crossing the fee plaza under the annual pass scheme shall be determined based on actual transaction data provided by NPCI through IHMCL. Speaking about this, rating agency ICRA has said that the FASTag Annual Pass will have a limited impact on toll operators. However, if the authority decides to fully compensate the differences, it may face a ₹4,200–4,500 crore burden. Ashish Modani, Senior Vice President and Group Head, ICRA Ltd, said that passenger car traffic accounts for roughly 35-40 per cent of toll operator revenue, though their share will be relatively higher on national highways around metro cities. “Given the Government of India’s thrust on monetisation and attracting private sector investment in toll projects, ICRA expects adequate compensation for the toll operators, thereby mitigating any material impact on their coverage metrics. However, the modus operandi of the payout could result in temporary receivable build-up in the interim,” he said, while also adding that considering that commuters with limited intercity or highway movement, as well as commercial taxi operators, will not benefit from the annual pass, the impact on the authority will be limited to six to seven per cent of annual toll collection. “In case toll operators are compensated fully by the authority, it could translate into an additional burden of ₹4,200-4,500 crore annually for the authority,” he stated. If ICRA’s projections are true, then it might dent the NHAI revenue in the current financial year, ending in March 2026. In the last fiscal (FY2025) that ended in March this year, NHAI collected ₹72,931 crore in toll fees. Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date: 27 Aug 2025, 08:39 am IST
Source: hindustantimes.com