Many use cases for FASTag that govt should consider

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Published: December 23, 2019 12:38:14 AM

UIDAI architect Nandan Nilekani, in a 2010 report, spoke of the benefits of the RFID technology that FASTag is based on.

fastag, fastag revolutionWith the revolution in digital payments, FASTag is sure to become a success.

Teething troubles aside, FASTag holds great promise for India. It is, of course, expected to bring down transport and human resource costs while reducing stoppage time on the road for vehicles. A study conducted by Transport Corporation of India (TCI) and IIM Kolkata in 2014-15 found that even though average speed of vehicles had increased, average stoppage delay per kilometre remained almost the same (0.0032 hr/km vis-a-vis 0.0034 hr/km), whereas the average stoppage expenses per tonne-km worsened, increasing 133% from `Rs .16/tonne-km in 2011-12 to Rs 0.28/tonne-km in 2014-15. Given that FASTag addresses this, it may lead to, as another study finds, a benefit of Rs 12,000 crore per annum.

UIDAI architect Nandan Nilekani, in a 2010 report, spoke of the benefits of the RFID technology that FASTag is based on. Earlier, when the government had made it mandatory for all cars to have RFID, the absence of a payment mechanism and a vehicle database made the exercise fruitless. With the revolution in digital payments, FASTag is sure to become a success. But, the government shouldn’t just think of FASTag as a solution to toll-payment delays. A new high-level RBI committee headed by Nilekani suggests broader use for FASTag. Once the government has a database on vehicles, it can start building services around it—fuel payments, payment of penalty for traffic violations, parking and congestion charges, etc. Not only would this ensure a wider acceptance of the service but it would also mean improving accountability and revenue collection.

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