The Government of India has announced that it will compensate highway operators and investors for any losses resulting from the newly introduced FASTag-based annual pass scheme for private vehicles.
The move comes as the National Highways Authority of India (NHAI) prepares to launch the annual pass from 15 August 2025, allowing private car, jeep, and van owners to make up to 200 trips on national highways or use the pass for one year, whichever comes first, for a flat fee of ₹3,000.
This annual pass aims to make highway travel more affordable and seamless for frequent travellers. It is expected to cut the average toll cost per trip to just ₹15, offering savings of up to ₹7,000 a year for regular users, especially those who currently pay around ₹50 per trip. The scheme, available through the Rajmarg Yatra app and the NHAI website, is only for non-commercial private vehicles and is not mandatory—existing FASTag users can continue with the regular pay-per-trip model if they prefer.
Concerns of Investors
However, the introduction of this pass has raised concerns among private highway operators and investors. Many of these stakeholders have invested significant sums in highway projects, with their returns linked to toll collections. With the new scheme likely to reduce toll revenues from frequent private vehicle users, the government has assured that a compensation mechanism will be set up to protect their interests. The details of this compensation plan are expected to be finalised in consultation with all stakeholders before the scheme’s rollout.
The government’s decision is seen as a balancing act—ensuring the benefits of affordable, hassle-free travel for the public while maintaining the confidence of investors in India’s ambitious highway infrastructure programme. The new annual pass is also expected to reduce congestion at toll plazas, encourage digital payments, and simplify the tolling process across the country.
As the 15 August launch date approaches, the government is working to finalise the compensation framework, ensuring a smooth transition to the new system for both commuters and investors. The FASTag annual pass represents a significant step towards modernising India’s highway network, while the compensation plan reflects the government’s commitment to supporting private sector participation in national infrastructure development.
