Though smart cities may still be a far-off goal, the government is now making headway towards smart transfers. In a bid to go cashless, after demonetisation, the economic affairs secretary on Wednesday announced that the government would ask all car manufacturers to install radio-frequency identification (RFID) tags in vehicles for e-payment of tolls. The technology will facilitate seamless toll-collection across the country. It will also save the country some money. A joint study by Transport Corporation of India and IIM-Kolkatta posits that e-collection would help save Rs 60,000 crore in fuel spent on slowing down and stopping at check-points and an additional Rs 27,000 crore for the time spent at toll-points.
While RFID has been in existence for the past decade or so, no serious adoption, of the kind likely from this move, has taken place in the country. In fact, it was only this year that the FASTag system promoted by ICICI Bank was able to get through 275 of the 350 toll plazas across the country. While the government had implemented this scheme for commercial vehicles since 2013—and even some passenger vehicles have been following it, its success has been plagued by absence of service centres. Also, toll authorities, like the Delhi-Noida-Direct Flyway, had developed their own tags, instead of those issued by car manufacturers. So, while the government has done well to ask car manufacturers to install RFID tags, a lot would depend on how soon the government will be able to develop acceptance infrastructure. It would do well to learn from the failings of the card economy, where despite issuing 19 crore RuPay card, it was not able to get people to use them because of absence of point of sale terminals.