By Aryaman Tandon, Director and Senior Vice President of the consulting and advisory firm Praxis Global Alliance
January 31 2020: The Ministry of Road Transport and Highways through a circular mandated and declared that all lanes of fee plazas on National Highways would be FASTag lanes by December 1, 2019, while provisioning one lane in each direction which would be kept as a hybrid lane to accept FASTags and other modes of payment. Thus, culminating the project to full implementation which started with the setting up of the National Electronic Toll Collection – NETC program under the National Payments Commission of India – NPCI in Dec 2016.
What are FASTags and their benefits?
FASTag is a device that employs Radio Frequency Identification – RFID technology for making toll payments directly while the vehicle is in motion. FASTag – RFID Tag is affixed on the windscreen of the vehicle and enables a customer to make the toll payments directly from the account, which is linked to FASTag without having to stop to pay. The major benefits of FASTags are:
- Reduced congestion and travel time: Customers can travel without stopping at the toll plaza by using the FASTag, thus reduce congestion at plazas, saving fuel and reducing the travel time
- Cashbacks: The Government is offering 2.5% cashback on toll payments on using FASTag at toll plazas
- Ease of recharge and cashless mode: FASTag can be recharged online using internet banking, debit or credit cards digitally
- SMS alerts: Customers will receive SMS alerts on their registered mobile numbers for all the transactions done in their FASTag account
Announcement and immediate impact
Although, there were many indications on various media interactions and informal announcements made by the Government in the prior months indicating that FASTags would be made mandatory soon. But the announcement did propel the sales of FASTags through the roof, as a result, average daily issuance of FASTags had gone up by over 330%, from 8K in July to 35K in November 2019. More than 15 lakh FASTags were issued in November 2019 alone, the highest it’s been since the FASTag program was started in December 2016. Overall, the issuance of FASTags grew sharply by a 24% jump to 79.01 lakh in November 2019 over 63.71 lakh in October 2019.
The Government then pushed the deadline to mid-December 2019, which was followed by another extension of the deadline till mid-January 2020 as it felt that more time was required for better implementation and adoption by the customers. This also reflected in an all-time monthly sales jump of ~47% to 37 lakh for the new FASTags in December 2019.
The way ahead
According to Queueeye (a software giving the real-time status of NHAI toll plazas), the average waiting time is around 12 minutes across 488 toll plazas operated, with congestion of up to 30-35 minutes at several of them. This traffic congestion at the toll plazas is leading to indirect losses of INR 27-28 Cr. per day along with an average fuel burn of 12,81,097 liters per day, average daily loss of 20,00,000 man-hours and average daily carbon emission of over 3,000 tonnes. This required immediate action on the government’s part which started the FASTag program in 2016 and finally after 3 years has implemented the program across India.
|As of Jan 2020, FASTags can be purchased from over 28,500 Point-of-Sale locations set up by various banks and IHMCL/NHAI which includes all NH fee plazas, RTOs, Common Service Centers, transport hubs, bank branches, selected petrol pumps, etc. They can also be purchased online on Amazon and by visiting websites and 12,000 branches of 23 different member banks.
Currently, 60% of the toll is being collected digitally as per the ministry sources. But, with the infrastructure being in place and the support from the public and banks, etc. the government is bound to achieve its objectives of full electronic toll collection and decongesting the toll plazas very soon. ( From PraxisInsights. Reproduced with permission)