The Fastag track could be key to the government's ambitious programme

Amid a softening of rules and lowering of penalties by all arms of the central and state governments in the middle of the lockdown, the Ministry of Road Transport and Highways went the other way. From May 15, it decreed that vehicles that do not have a functioning Fastag pasted on their windows are being asked to pay double the fees chargeable if they enter a Fastag lane at a toll plaza on a highway.

Till the new orders, the penalty was reserved only for vehicles that encroached on the Fastag lane without the Radio Frequency Identification Device (RFID). Those vehicles with malfunctioning RFID tags could pay cash at the prevailing rate and still get away. The onus is now on the vehicle driver to ensure that the Fastag works. This is quite a jolt for vehicle owners, since the fees are fairly steep (Rs 65 for a car for single journey on  the Delhi-Gurugram highway, for instance).

It is a measure of the confidence within the ministry that an attempt at behavioural change has worked on India’s national highways. Some months ago, the ministry had begun to experiment two “nudge” experiments in road transportation. The first one was in September 2019 when the amended Motor Vehicles Act of a fairly draconian nature came into force. It raised steeply the punishment for all categories of offences for violating road rules. The second one followed in December, to mandate all tolls should be paid only through Fastags.

The first one, however, proved difficult to implement, with many states asking for a rollback of the stringent fines and punishments. The second one did not.

As a result, collections from Fastag has done wonders to National Highways Authority of India (NHAI) revenues. Despite an almost complete shutdown in April, collections till the end of May has reached 12.3 per cent of the total for FY20, at Rs 11,294 crore. 

 

So though Covid-19 slowed the collections, the trend is clear. This has enormous implications for the economy. Investment in public infrastructure will be essential to pull the economy out of the massive downturn the pandemic has imposed. Investment in roads will be a critical part of the building that infrastructure. Minister for Road Transport and Highways Nitin Gadkari says he expects to begin work worth Rs 15 trillion in the next two years. Tightening rules for paying toll plaza is a basic need to make this happen.

Fastags have begun to throw up an impressive body of data on the number of cars that use a stretch of road, proving invaluable for bidders for toll-operate-transfer road projects. Concessionaires had often cheated on the revenue their toll plazas generated which made the monetisation of road projects weaker. It is not surprising that soon after the imposition of the higher penalty last month, the NHAI announced last week that it had launched an Artificial Intelligence-powered Big Data Analytics platform to totally transform its functioning. Data processing capacity would be needed big time to hand out mega road projects, monitor their performance and cut arbitration.

On the other hand, the amended Motor Vehicles Act was meant to remove India’s dubious distinction as the country with the highest number of persons killed in road accidents in the world. According the World Road Statistics, 2018 report 151,417 Indians were killed on the roads. The fatalities were 2.37 per cent more than the year before.

The level of embarrassment was high. Gadkari did not participate in the fifth UN Global Road Safety Week which was held from May 6-12, 2019. The ministry ascribed no reason but the conclusion was obvious. India would have stood out for its dismal record. The ministry had hoped to get the amendments passed in the Budget session of Parliament in 2019 but when the states dug in their heels, the Bill had to be postponed to the monsoon session.

The ministry claims there has some reduction in the road accident rates since the Bill was passed in September, 2019, quoting data from 12 states for five months (till January-end). The list includes high-traffic states such as Delhi, Maharashtra, Uttar Pradesh and Haryana. But a closer look shows a reduction in ten of the 12 states. The problem is that the Motor Vehicle (Amendment) Act, 2019 has many great features focussing on road safety, revision in penalties for traffic violations, electronic monitoring of offences, enhanced penalties for juvenile driving, computerisation of vehicle fitness and driving standards and so on but it is entirely up to the states to implement those. The Constitution offers the Centre only an advisory role except for streamlining of the rules for third-party insurance and payment of increased compensation for hit-and-run cases etc.

So, the ministry could only note that it has developed an “Integrated Road Accident Database System” and implemented publicity measures and awareness campaigns on road safety. But it is nowhere near the spending of $109 billion recommended by the World Bank over ten years to halve the number of deaths on Indian highways.