Toll Collection Not Linked To Project Cost Recovery, Says Gadkari, Explains Factors Behind Hike

Last Updated:February 11, 2026, 15:41 IST

The minister said the revenue collected beyond the concession period is deposited in Consolidated Fund of India & used for further maintenance & development of national highways

The toll collected from a road is not related to the recovery of project development cost, the Ministry of Road Transport and Highways informed the Rajya Sabha on Wednesday.

Union minister Nitin Gadkari added that the revenue collected beyond the concession period is deposited in Consolidated Fund of India (CFI) and the funds provided through budgetary allocation are utilised for further maintenance, development and augmentation of national highways.

The ministry, in a written reply, said the National Highways Fee (Determination of Rates and Collection) Rules, 2008, as amended, provide a transparent framework for levy and collection of user fee, with rates linked to the length of the highway and type of vehicle uniformly across the country.

Gadkari said collection of user fee (toll) at fee plazas on National Highways is done as per the provisions of National Highways Fee Rules, 2008.

“…the fee notified as per concession agreement is collected by the concessionaire till the end of the concession period, and after the concession period is over, the fee is collected by the Central Government or the executing authority as per the fee specified…," he said.

In a separate reply, Gadkari said the increase in the amount of user fee collection at toll fee plazas on national highways depends on several factors.

“These include the annual revision of user fee, which is linked to the wholesale price index in accordance with the National Highways Fee (Determination of Rates and Collection) Rules, 2008, increase in the length of highways under tolling, the volume of traffic plying on the stretch, and the category of vehicles using the highway," he said.

In August 2025, the Public Accounts Committee (PAC) had said that there is no institutional mechanism to independently evaluate whether toll charges are justified in relation to actual operation and maintenance costs or future service requirements.

The committee said it has found that toll charges on National Highways are linked to base rates first fixed in 2008 and annually revised, with a 3 per cent annual escalation, irrespective of road quality, traffic volume, or user affordability.

“… the concept of tolling in perpetuity was first introduced through an amendment to the Fee Rules in 2008, allowing continued collection of user fees even after the recovery of project costs. This provision was further clarified and codified through the 2023 amendment to the Fee Rules, which explicitly permits tolling to continue beyond the end of the concession period, thereby formalising a regime of perpetual tolling," it had said.

The committee had desired that toll collection on any highway stretch must be rationalised and substantially reduced once capital and routine maintenance costs have been recovered.

“Any continuation of tolls beyond this point should be permitted only if clearly justified and approved by the proposed independent oversight authority," the report added.

The committee also recommended that the ministry establish a tariff authority, on the lines of the Airports Economic Regulatory Authority (AERA) in the civil aviation sector, to ensure transparency and fairness in toll fixation, collection, and regulation.

This authority should be mandated to review and determine the periodicity of toll revisions based on certain parameters, it suggested.

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