According to ICRA, FY 24 is expected to see a hike of 2-4% in road projects in India which will result in a sharp rise in toll taxes too. Existing and ongoing road projects will see a rise in their toll taxes due to the falling wholesale price index, a report said on February 13, 2023. The wholesale price index (WPI) based inflation is expected to fall further and is likely to settle at sub-2 percent in March 2023.
“In the backdrop of easing WPI inflation to 4.95 percent in December 2022 and an expected WPI inflation of sub-2 percent in March 2023, the inflation-linked toll hike should be relatively modest at 2-5 percent in FY2024 compared to the 8.7-14.6 percent toll rate hike in FY2023,” ICRA said.
As per sources from the reporting agency, the number of road users or traffic volume and toll rates are the major factors that affect toll collection in the country. Traffic volume has a strong correlation with the gross value added of construction, mining, and manufacturing, as around 65 percent of the freight traffic is dependent on these sectors. Growth in these sectors is estimated to be 5-7 percent in FY24 and is likely to result in 4-5 percent growth in the overall traffic volume.
There is a 25 percent jump in gross budgetary support for the road ministry at Rs 2.59 lakh crore in FY24 from Rs 2.06 lakh crore in FY23, which should support the increased road project execution target of 14,500 kilometers against 12,000 km in FY23.
