The new financial year will add to the inflationary pressure with toll charges on highways and expressways all set to be hiked by an average of 5-10% even as toll road operators saw an estimated revenue growth of 16-18% in the current year.
Toll revenue growth will remain strong in FY24 as well, but lower at 9-11%, riding on above average traffic growth, a report by research and rating agency Crisil said. The hike, however, will not be uniform across the country and will vary depending on a variety of factors.
The Mumbai-Pune Expressway, which is one of India’s busiest, will witness a jump of 18% in toll charges from April 1, an official from the Maharashtra State Road Development Corporation reportedly said.
Anand Kulkarni, director, Crisil Ratings, “As per the analysis of 49 toll roads across 14 states in India, the toll rates on national highways were hiked by about 10.5% in FY23. As per our own estimates, the toll rate hike would be about 5% for FY24.”
In FY24, traffic growth is expected to taper to 4-6%, but will remain higher than the 4-year compound annual growth rate (CAGR) of 2-3% seen through FY22. Traffic growth is closely linked to real gross domestic product growth, which is expected to decline to 6% in FY24 and 7% in FY23.
“There are many factors kept in mind before toll charges are hiked. Besides, its linkage to the wholesale price index, factors such as added services provided by the toll collector, vehicle density and political influence also play a vital role in deciding changes in toll charges,” PC Grover, director general, National Highway Builders Federation said.
Despite the Delta wave of Covid-19, toll collection during FY22 surged 21% to ?34,743 crore compared to ?28,681 crore seen during FY21, according to the Ministry of Road Transport and Highways. FY23 toll collection is expected to be even higher considering the surge in road travel and the hike in toll charges.