FASTag Toll Collections Rebound To Pre-Covid Levels: Govt To Reduce Highway Construction Spending

The Covid-19 pandemic and the lockdowns that were called for resulted in a decline in collections across toll plazas. Collections stood at Rs 11 crore during February this year, and dropped to close to Rs 1 crore during April.

Reports are that construction and repair work has started across the national highway network across the country, but analysts say that construction and repair work will see a 12 percent decline this year.

Reports also suggest that national highway construction and repair had covered only 210km during April but have rebounded to 637km in May.

Key construction and repair periods were lost during the lockdown and was affected by migrant labour returning home. Expectations are that a normal situation will return after the monsoons.

The Ministry of Road Transport and Highways also announced that they invested Rs 18,700 crore during the months of April and May - a massive increase from the Rs 400 crore it spent during the same period last year.

The Ministry said that the increase in spending is because of major payments that were made to help with cash flows of highway developers.

While the increase in toll collections is fantastic the government has decided to put a majority of spending on repair work on a backseat. The plan is to invest in healthcare and social welfare. The government says that investing in health and social welfare will help with recovery of the economy.

Thoughts About The FASTag Collections Rebounding Back To Pre-Covid Levels

The Covid-19 pandemic and the lockdowns that were in effect had close to halted movement of people and goods in total during the months of April and May. The ease of restrictions will help boost the economy, and increase resources and revenues that the government can reinvest in development. We expect FASTag collections to increase over the next few months.