Govt May Pay Rs 42–45 Billion to Toll Operators Yearly

29 Aug 2025 CW Team

While highway users may benefit from the introduction of the annual toll pass, the financial burden on the central government to compensate private toll operators could reach Rs 42–45 billion annually, according to rating agency ICRA.

Passenger cars account for approximately 35 to 40 per cent of revenue for toll operators, with this proportion rising on highways near major metropolitan areas. The annual pass scheme, which offers flat-fee usage for frequent commuters, is expected to reduce direct toll collections from these vehicles, creating a shortfall for private concessionaires.

ICRA noted that in light of the Government of India's continued emphasis on infrastructure monetisation and efforts to attract private sector participation in toll road projects, it is likely that toll operators will receive adequate compensation. This support is expected to offset the revenue loss and prevent any material impact on the operators’ coverage metrics or debt servicing ability.

The assurance of government compensation is considered essential to maintain investor confidence and ensure continued participation in the toll-operate-transfer (TOT) and hybrid annuity model (HAM) frameworks that are central to India’s highway development strategy.

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