Travelling on the highway is often romanticised in the movies. Looking broodingly at the never-ending road, moving your hand like a wave or feeling the wind blow against your hair while you sing along to your ‘on the road’ playlist as loud as you can. Thanks to these scenes, everyone wants to experience a road trip. But in reality, you get stuck at toll gates for hours, every few hundred kilometres nonetheless, as cars ahead move at a snail’s pace and the ones behind honk constantly. These tolls on the highway generate a lot of revenue for the Central government, almost Rs.244 billion in FY19. So, when the nation went under a lockdown, highways started to look deserted and toll counters had to be shut. According to Crisil’s Taking a Toll report, traffic on India’s highways is set to reduce 16.5% this fiscal, which would cull toll collection by 17% due to the latest lockdown extension till May 31. This is due to the fall in freight movement, work-related travel and leisure/tourism journeys amid COVID-19 restrictions. Additionally, toll collections will also be affected due to an estimated ~25% de-growth in passenger vehicle sales in FY21, following an 18% decline in FY20.
Over the long term (FY19-24), as vehicle sales gradually pick up, newer roads are constructed and freight movement increases on the back of e-commerce, Crisil expects toll collections to bounce back at CAGR of ~11-12% (lower than the 14.6% clocked in the previous five fiscals). ‘New road constructions’ is the key term here. Without any new road projects, growth in toll collections will be halved at ~6-6.5%, cautions Crisil. The NHAI executed 3,979 km of national highways in FY20 compared to 3,380 km in FY19. After the COVID-19 slump, the pace of execution is expected to pick up again to ~3,500-4,000 km/year between FY21 and FY24. Looks like India has a long road ahead.