FASTag – A fastrack to Bharat’s digital economy

To enable seamless toll collection at the plazas, the government introduced RFID (Radio Frequency Identification) enabled FASTags. National Payments Corporation of India (NPCI) has developed the National Electronic Toll Collection (NETC) program to meet the electronic tolling requirements of Bharat’s market.

The first pilot project commenced in November, 2014 followed up with several National highways implementing this electronic toll collection mechanism. The government finally rolled out FASTag-based electronic toll collection mechanism from December 15, 2019, across all toll plazas of the NHAI. 

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.

FASTag offers the convenience of cashless payment along with benefits like – savings on fuel and time as the customer need not have to stop at the toll plaza. The cashless system will also result in significant savings to the GDP by reducing delays at toll plazas and cutting down on vehicle fuel. 

An MoU was signed between Indian Highways Management Committee Ltd. and Goods and Services Tax Network for integration of EWB system with FASTag. The integration of EWB system with FASTag will help revenue authorities track the movement of vehicles and ensure that they are travelling to the same destination as declared by the transporter or the trader while generating the E-Way bill. The supplier/ transporter will also be able to track his vehicles through SMS alerts generated at each toll plaza.

The government is making efforts to enable usage of FASTag for making various vehicle related payments apart from toll payments, such as fuel payment, parking charges, etc., to position FASTag as the ‘Aadhaar’ for a vehicle.

As on March 2020, Bharat has 566 toll plazas covering 29,666 kms highway length across the country. Already, over 80 per cent of all toll collected across national highways is through FASTag.

Toll collection has reached around Rs 93 crores per day and the government estimates that by March, 2021 the annual toll collection to reach Rs 34,000 crores and in the next two years the country will become “toll plaza free” with the use of GPS based  automated toll collection system.

The government also estimates the toll collection income in next five years will be Rs.1.34 trillion. 

As of today, all commercial vehicles come with vehicle tracking systems and the government is planning to install GPS technology in old vehicles.

National Electronic Toll Collection (NETC) system will also ensure that the toll collection by the toll plazas is transparent and totally digitalized preventing diversion of funds by the road contractors so that the financing banks can keep a track of the daily toll collections and deduct their loan repayments for the BOT road projects funded by them on timely basis. 

Till 31st January, 2021, 2.49 Crore FASTag stickers have been issued and Rs 38,187.14 crores worth of ETC transactions have been done across the country. ETC Program aims to be an open platform for development of services like congestion or cordon pricing, collection of parking fees, automated collection of fines/ challans by police authorities, payment of road tax and other duties and plethora of other services including buying of petrol. 

A number of MoUs were also inked between State road transport corporations and Indian Highways Management Company Ltd. (IHMCL) for bringing toll plazas in states under National Electronic Toll Collection programme.

Down the line one can expect the FASTag to actively promote digital transactions in Bharat’s transportation sector and provide a wide range of integrated services to the vehicle owners on cashless basis.  

It is estimated that Bharat has around 50 million vehicles with an average monthly demand for petroleum products of 18 million tonnes. Therefore, FASTag has the potential to become a fastrack to digital economy in Bharat in the years to come.

Let us hope the government will take this initiative forward and integrate a wide range to services in transport sector under FASTag at an early date. 


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About the Author

Dr. B.N.V. Parthasarathi
Ex- Senior Banker, Financial and Management Consultant and Visiting faculty at premier B Schools and Universities. Areas of Specialization & Teaching interests - Banking, Finance, Entrepreneurship, Economics, Global Business & Behavioural Sciences. Qualification- M.Com., M.B.A., A.I.I.B.F., PhD. Experience- 25 years of banking and 14 years of teaching, research and consulting. 100 plus national and international publications on various topics like- banking, global trade, economy, public finance, public policy and spirituality. One book in English “In Search of Eternal Truth”, two books in Telugu and 20 short stories and 27 articles published in Telugu. Email id: [email protected]