The FASTag Annual Pass, which was introduced on August 15, 2025, is already a top-selling product among highway users in India. The scheme is aimed at personal, non-commercial vehicles and it offers up to 200 toll charges or one-year expiry-whichever is earlier-at a fee of ₹3,000.
The pass, which is applicable across over 1,150 toll plazas, already has an array of than five lakh users in less than four days since its implementation.
A Compensation Mechanism in Place
A circular on a compensatory system of the toll collection agencies was issued by the National Highways Authority of India (NHAI) shortly after the launch.
In the upcoming three months, the toll operators will receive compensation for the revenue variation due to the pass mode. More than that, the offers by bidders of toll contracts will require them to consider the yearly pass utilization data to eliminate the necessity to compensate in the future.
ICRA’s Cost Warning
The annual pass scheme will have minimal long-term effects on the toll operators, owing to this compensation mechanism by the credit rating agency ICRA.
Nevertheless, with NHAI providing any additional subsidies to cover the deficit, the financial cost might be too high.
Ashish Modani, Senior VP and Group Head at ICRA, explained:
Passenger car traffic contributes 35% – 40% of toll operator revenue, with higher shares near metro highways.
The scheme’s impact on toll collections will likely be around 6% – 7% annually.
If toll operators are fully compensated, NHAI could face an additional ₹4,200 – ₹4,500 crore burden each year.
Revenue Implications for NHAI
To give some background, the amount of toll collected by NHAI was ₹72,931 crore in FY2025. Provided that the projections, by ICRA, are correct, the scheme would help cut a visible fraction of this amount in FY2026. Although commuters are finding it much more convenient, the scheme casts doubt on long-term financial sustainability.
The FASTag Annual Pass has been regarded as a forward-looking move towards hassle-free travel, however user benefits, weighed against the financial soundness will be the real challenge facing NHAI in the coming months.
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