A New Formula for Fairness
In a significant move for motorists, the National Highways Authority of India (NHAI) is implementing a revised formula for calculating tolls on routes that feature major structures like bridges, tunnels, and flyovers. This change stems from a July 1,
2026, amendment to the National Highways Fee Rules of 2008 by the Ministry of Road Transport and Highways. Previously, the tollable length of such structures was often treated as ten times their actual length to account for higher construction and maintenance costs. This could lead to disproportionately high tolls on certain routes. The new system introduces a cap, directing authorities to use whichever of two calculations results in a lower tollable distance, aiming to make fees fairer for commuters.
How the New Calculation Works
The revised rule requires toll authorities to compare two figures. The first is calculated by taking 10 times the length of the complex structures (like bridges and tunnels) and adding the length of the regular road. The second is simply five times the total length of the entire highway section. The lower of these two resulting figures will now be used to determine the toll. For example, on a 40-km highway with 30 km of bridges and tunnels, the old method could result in a chargeable length of 310 km. Under the new rule, the chargeable length would be capped at 200 km, leading to a substantial reduction in the toll fee paid by road users. Structures less than 60 metres in length are excluded from this special calculation.
The Rationale: Balancing Costs and Commuters
The primary goal of this change is to strike a better balance between recovering the high costs of building and maintaining sophisticated infrastructure and ensuring affordability for the public. Bridges and tunnels are engineering marvels that are exponentially more expensive to construct and upkeep than standard highways. The previous tolling model was designed to recoup this investment. However, as India's highway network has expanded, public and political pushback against escalating toll charges has grown. This reform is seen as a way to ease the financial burden on daily commuters and the logistics sector, which relies heavily on these routes, without completely abandoning the user-pays principle that funds infrastructure development.
The Broader Funding Picture
While this revision offers relief to motorists, it also raises questions about infrastructure funding. Toll revenues are the financial backbone of India's highway development, helping to attract private investment and fund future projects. NHAI's asset monetisation programs, which involve long-term leasing of highways to investors, depend on predictable toll collections. Any reduction in toll revenue, however justified, could affect the valuation of these assets. To counter this and attract a wider pool of capital, the government has recently opened up highway projects to new classes of investors, including pension funds, private equity, and venture capital, who can bring in long-term funding. This diversification is crucial for sustaining the pace of infrastructure growth.
What's Next for Indian Highways?
The new tolling formula will be applied to publicly funded toll plazas at their next scheduled fee revision and to new projects from their inception. This change is part of a larger push to modernize India's highway experience, which includes plans to eliminate physical toll plazas entirely by the end of 2026 and move to a fully automated, distance-based tolling system using number plate recognition technology. While some recent toll hikes have occurred on specific stretches due to annual revisions, this new overarching policy for bridges and tunnels signals a significant shift. It shows a responsiveness to consumer concerns and a long-term vision for a more efficient and equitable highway network across the country.
