In order to enhance the efficiency of the electronic toll collection system, the ministry of road transport and highways on Monday announced that banks will deactivate/blacklist FASTags with incomplete KYC (know your customer) with effect from February 1, 2024.

The decision is part of the 'One Vehicle, One FASTag' initiative by the ministry to discourage user behaviour of using single FASTag for multiple vehicles or linking multiple FASTags to a particular vehicle.

"To avoid inconvenience, users must ensure that KYC of their latest FASTag is completed. FASTag users must also comply with 'One Vehicle, One FASTag' and discard all the earlier issued FASTags through their respective banks. Only the latest FASTag account shall remain active as previous tags will be deactivated/blacklisted after 31st January 2024,” says the ministry in a statement.

The decision stems from recent reports received by NHAI (National Highway Authority of India) of multiple FASTags being issued for a particular vehicle and FASTags being issued without KYC, which violates the mandate by the Reserve Bank of India (RBI). “Apart from this, FASTags are sometimes deliberately not fixed on the windscreen of the vehicle, resulting in unnecessary delays at the toll plazas and causing inconvenience to fellow National Highway users,” the ministry says.

The government implemented FASTag to reduce the waiting time at the national highway fee plazas. So far, FASTag has a penetration rate of 98%, with more than 8 crore users, according to the government data. “Deployment of Electronic Toll Collection system at various fee plazas along National Highways has brought transparency in the system and enabled correct valuation of road assets which has encouraged more investors to invest in the highway infrastructure of the country, particularly, in asset recycling,” the ministry said earlier.

The development comes amidst NHAI’s plans to construct 1,000 kilometers of optic fibre cables (OPC) infrastructure across the country by FY25. The government-owned special purpose vehicle (SPV) aims to implement digital highways by developing integrated utility corridors along the national highways to develop OFC infrastructure. For this, approximately 1,367 km on the Delhi-Mumbai Expressway and 512 km on the Delhi-Mumbai Expressway and 512 km on the Hyderabad-Bangalore corridor have been identified as pilot routes for digital highway development.

Notably, in the Union Budget 2023-24, the government allocated a capital outlay of ₹2.58 lakh crore for roads and highways. This is 25% higher than that of the revised estimate for FY23. In the revised estimates for the current financial year too, the allocation has been enhanced to ₹2,06,302 crore. Capital expenditure in FY23 is up by 80% as compared to the previous fiscal. Debashish Biswas, Partner (Infra), Deloitte India in a post-budget interview with Fortune India, said that the ministry of highways is performing well and a road sector ecosystem leads to job creation due to its impact on the overall logistics and transport sectors of the economy.

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