Highway Tolls Should End After Cost Recovery, Says Parliamentary Report

A parliamentary panel has voiced strong concerns over the practice of continuing to levy toll charges on National Highways even after the project costs have been fully recovered, along with the annual 3% escalation that applies regardless of road quality, traffic flow, or user affordability.

In its latest report, the Public Accounts Committee (PAC), chaired by Congress MP K.C. Venugopal, recommended a rationalisation and significant reduction of toll rates on such stretches. It also proposed the creation of an independent "tariff authority" to oversee toll fixation, similar to the Airports Economic Regulatory Authority (AERA) in the aviation sector. The panel said this body should ensure transparency and fairness in toll rate determination, collection, and regulation, and should review the periodicity of toll revisions based on objective parameters.

“Any continuation of tolls beyond the cost recovery period should only be allowed if clearly justified and approved by this proposed oversight authority,” the PAC said.

The committee pointed out the absence of an institutional mechanism to assess whether toll charges are proportionate to actual operation and maintenance costs or future service needs. In response, the Ministry of Road Transport and Highways informed the panel that it has initiated a study with NITI Aayog to overhaul the toll determination framework. The review will cover base rates, inflation-linked revisions, and concession structures, and will involve academic input from IITs and IIMs.

The PAC also called for a review of all existing contracts and publicly funded toll plazas that allow tolling beyond the cost recovery period. While the panel acknowledged that higher toll charges are reasonable during the concession period, it stressed that continuing them afterward must be clearly justified to protect user interests and uphold fairness.

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