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Indian Institute of Management Calcutta

IIM Calcutta study indicates huge loss to country's economy due to Shoddy road checkpoint system

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The Economic Times

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It is ironic and shocking that due to delays at checkpoints, highway toll plazas cost the economy around 20 times their annual tax collections.

A study by IIM-Kolkata and the Transport Corporation of India estimates the costs at a scandalous Rs 87,000 crore a year, far higher than the Centre's toll collections of Rs 4,364 crore in 2009-10.

The finding, based on surveys of operation efficiency at 17 transportation trunk routes, calls for speedy introduction of foolproof electronic tolling to avoid lengthy queues and delays at manual checkposts.

Also required is governance reform to put paid to such practices as overloading, the rates for which can apparently be negotiated at will. The study finds that the length of time at toll points adds up to Rs 27,000 crore nationally. And the extra fuel spent on slowing down and stopping at checkpoints amount to an additional Rs 60,000 crore.

While on average, a vehicle requires about 65 hours of driving time to traverse the distance of about 1,400 km between Delhi and Mumbai, of the three hours of stoppage delays, the time spent at toll plazas is around 2.5 hours. The delays are even higher on the Delhi-Bangalore corridor.

While the average journey time to cover the 2,000 km is 94 hours, of the six hours of stoppage delays, over four are spent stranded at toll stops. Such delays and the incredibly high costs they entail, simply make no sense.

The way ahead is to integrate the highway toll collection system with other revenue sources like octroi and state taxes. The transaction costs of upfront payment at toll points can be reduced by standardising IT platforms and protocol.

In parallel, it is now possible to individually embed radio frequency identification (RFID) systems on long-distance trucks at nominal costs, and use global positioning system to track and monitor carriage and haulage cross-country. India is far from a unified internal market due to a plethora of entry taxes and other levies.

The economic costs of toll delays add to the overall costs of market fragmentation. Hence the pressing need to have proactive policy across states to streamline toll collections using up-to-date technology and systems.

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