The National Highways Authority of India (NHAI) has rolled out a compensation framework to cushion toll operators from the revenue impact of the newly launched FASTag Annual Pass. The scheme, effective from August 15, 2025, offers considerable benefits to frequent travelers—but it also reduces per-trip toll income for operators.
Why Compensation Is Needed
The ₹3,000 annual pass lets private vehicle owners make up to 200 toll crossings or one year of usage—whichever comes first. It eliminates per-trip charges, leading to significant cost savings for users.
However, providers miss out on revenue. Crisil Ratings estimates a 4–8% drop in toll collections from this segment—depending on how widely the pass is adopted.
Details of the Compensation Plan
- Coverage Period: The compensation applies for three months from August 15, 2025, to offset immediate revenue losses.
- Compensation Formula:
- Calculated based on the number of vehicles with active annual passes multiplied by the applicable private vehicle toll rate at each plaza.
- For return journeys, the toll rate is set at 1.5 times the standard rate.
- Usage Limit: Compensation capped at two one-way annual pass transactions per vehicle per day per toll plaza, even if the vehicle crosses multiple times.
- Review Timeline: The scheme will be reviewed after three months—or earlier if needed—and applies to both existing and new agreements.
Strategic Importance
This compensation ensures continuity and maintains trust among toll operators, who contribute significantly to infrastructure investments. Crisil noted that if well-executed, even a six-month delay in payouts is manageable given the operators’ liquidity coverage.
Moreover, the mechanism helps preserve operators’ Debt Service Coverage Ratios (DSCRs)—a critical factor for their financial health.Business Standard
Conclusion
NHAI’s proactive compensation for toll operators bridges the gap between public service expansion and commercial sustainability. While the FASTag Annual Pass simplifies travel and offers great value to commuters, the compensation plan ensures that operators remain financially stable during this shift.
