One Vehicle, One FASTag by NHAI: Overview, Meaning, Benefits For UPSC Notes

FASTag is an electronic toll collection system launched by the government of India. The FASTag scheme was introduced with the tagline of One Nation One Tag – FASTag to proceed with having a unified electronic system in India. It was launched in 2014 and is operated by the National Highway Authority of India (NHAI).

FASTag is one of the most important topics for the UPSC IAS exam. It covers a significant part of the Government Schemes section in the General Studies Paper-2 Syllabus and current events of national importance in General Studies Paper -1 of the UPSC Prelims Syllabus.

In this article, we shall study the meaning of FASTag in detail, as well as the advantages and disadvantages of FASTag UPSC.

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FASTag | Nationwide Cashless Toll Payment System: Download PDF here!

Why In The News?

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FASTag is an RFID passive tag used for making toll payments directly from the customer's linked prepaid or savings/current account. It is affixed to the windscreen of the vehicle and enables the customer to drive through toll plazas without stopping for any toll payments. The customer's linked account is instantly debited for the toll fee. FASTag is likewise vehicle-specific and cannot be moved to another vehicle after being attached to one. It can be purchased from any of the National Electronic Toll Collection (NETC) member banks. It must be recharged or topped up according to the customer's usage if it is connected to a prepaid account. It is blocked at the toll plaza if the consumer fails to keep an adequate balance. If a customer enters a toll plaza in this situation without recharging, he will not be able to use NETC services and will have to pay the toll in cash.

FASTag Minimum Balance

You must maintain a FASTag minimum balance. This ensures no interruption at toll plazas.

• Light vehicles: ₹100–200
• Heavy vehicles: ₹300–500

FASTag New Rules

Recent FASTag new rules aim to improve traffic management. New guidelines enforce:

• Single FASTag per vehicle
• Deactivation of unused tags
• Timely KYC updates

What Is a FASTag Annual Pass?

Annual Pass activated on the FASTag allows free passage of private car/jeep/van at designated National Highway (NH) and National Expressway (NE) fee plazas for one year or 200 trips (whichever is earlier), without per-trip user fee charges.

FASTag-based annual pass for national highways

In a significant relief for frequent travellers, Road Transport and Highways Minister Nitin Gadkari announced a new FASTag-based annual pass on Wednesday. The new FASTag yearly pass will be available for Rs 3,000. It will be effective from August 15, 2025, Gadkari announced."The Annual Pass will enable seamless and cost-effective travel across National Highways throughout the country. A dedicated link for activation and renewal will soon be made available on the Rajmarg Yatra App as well as on the official websites of NHAI and MoRTH.

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Historical Background of Fastag

The National Electronic Toll Collection (NETC) initiative was created by the National Payments Corporation of India (NPCI) in December 2016 to solve the problem of traffic created by manual toll collection and to digitize the tolls in India. When it comes to the National Electronic Toll Collection (NETC) system, interoperability refers to a shared set of procedures, business policies, and technical requirements that allow customers to use their FASTag as a payment method on any toll plaza, regardless of who owns the toll plaza.

Who is Implementing the FASTag System?

• FASTag is a flagship program of the Ministry of Road Transport and Highways & National Highway Authority of India (NHAI).
• Its initiative is implemented in India by Indian Highways Management Company Limited (IHMCL), a business endorsed by NHAI.
• It provides a cross-country, interoperable toll payment system with Clearing & Settlement House (CCH) services for settlement and dispute resolution. The National Payments Corporation of India provides the services.
• IHMCL has currently approved 26 banks to issue this in India, while 12 banks are authorized to perform acquiring services at toll booths.

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How Fastag Works? | Technology of Fastag

FASTag uses Radio Frequency Identification (RFID) technology to enable cashless toll payments to be made directly from moving vehicles. The working of FASTag is explained below.

• It is attached to the user's vehicle's windscreen after being connected to the user's prepaid account.
• The FASTag scanner scans the tag attached to the car using Radio Frequency Identification (RFID) technology and then instantly deducts the toll payment from the associated prepaid account.
• The toll fee is deducted as the car passes through the toll gate, which eliminates the need for the vehicle to halt there.
• The transaction will then be charged to the prepaid FASTag account of the owner of the vehicle.

What is RFID?

RFID stands for Radio Frequency Identification. It is a form of wireless communication that uses electromagnetic or electrostatic coupling in the radio frequency region of the electromagnetic spectrum in order to identify an object, animal, or human uniquely.

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Advantages and Benefits Of FASTag

FASTag enables automatic toll payments, reducing wait times at plazas and promoting smooth, cashless travel across highways. It saves fuel, time, and supports digital governance in transport. It is used by the government, road users, and toll operators. Let's discuss the benefits one by one.

FASTag Benefits for Government

• Fuel savings and a decrease in pollution caused by idling and frequent stops at toll booths.
• It will enhance transparency in toll transactions.
• It will lead to better tax compliance and will reduce black money transactions. Everyone will pay and receive digital transactions.

FASTag Benefits for Toll Operators

• The operating costs will be low as the workforce will be less.
• Installation of FAStag will improve audit control through centralized user accounts.
• Enhanced capability without having to add more infrastructure

FASTag Benefits for Road Users

• There are several toll plazas encountered when travelling by road between cities or states. You can use it to pay for tolls electronically and have a hassle-free driving experience for the duration of your trip. FASTag will handle all of your toll payments.
• A person can more easily keep track of all your toll expenses using FASTag. Each time a toll payment is deducted, an SMS is sent to the registered number linked to the user's FASTag account.
• Statements for tolls can be downloaded or ordered online.
• Normal users can seek to have their regular monthly passes converted to FASTag passes. For businesses and fleet owners, there is an online application process to complete the same.
• FASTags have no expiration date; therefore, they can be used as long as they are undamaged and readable at toll booths.

FASTag Benefits for the Environment

• Reduction in Noise Pollution: The quick payment method used lessens noise pollution by smoothly directing traffic across the booths.
• Lower Carbon Emissions: All drivers of vehicles save a significant amount of fuel as a result of FASTag payment because it prevents the potential of prolonged traffic congestion at toll booths.
  • By implementing the FASTag toll payment system, the government hopes to reduce India's carbon footprint by about 35% by the year 2030.
• Paperless Payments: They are suitable for the environment because they make it possible to make toll payments online.
  • Overuse of paper contributes to deforestation, which has an adverse effect on rainfall, soil quality, and global warming.
  • The cost of paper used to create currency and toll payment receipts is reduced by using an electronic payment system.

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Disadvantages Of FASTag

FASTag may face issues like technical glitches, incorrect toll deductions, or problems at plazas with poor scanner infrastructure or network errors. Here are some of the disadvantages. Let's discuss them in detail.

• Chances of System or Network Failure: Since an automated network will control every system, the network will play a bigger role in the process and the FASTag technology.
  • The network servers must be kept operational because if they go down, there could be a commotion and difficulties with efficient operations.
  • This could thus have an impact on the public and have a significant financial cost to the government.
• Technical Problems in the System: No machine is immune to malfunction, so it must be remembered that there is a possibility that the scanning mechanisms will be unable to read a FASTag.
  • The FASTag may become unreadable after a few transactions, and in order to reissue the same document to the customer, the government or issuer must have a backup plan.
• Chances of Vulnerability of FASTag Sticker: FASTag is placed in form sticker on the windscreen. It is highly vulnerable to being tampered with and getting damaged. It might stop working, in which case you'd need to get a new FASTag for your car. The registration procedure must be repeated even though the payment is refunded.
• Problems Regarding Vehicle Ownership: It is currently unclear if other individuals are permitted to drive automobiles, given that the owner's registration and banking information will be connected to the FASTag.
• Unemployment: Due to the automatic payment system at toll booths, the workforce is not required, which will further lead to unemployment.

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Fastag and Right to Freedom of Movement

FASTag, while improving toll efficiency, raises concerns when non-payment restrictions hinder highway access, potentially impacting the Right to Freedom of Movement under Article 19 of the Constitution. The requirement to use FASTag does not infringe upon a citizen's right to freedom of movement.

• Its use guarantees quick travel times, smooth traffic flow, and that all decisions were made in line with Central Motor Vehicles (CMV) Rules.
• The Central Government is required by Section 136A of the Motor Vehicles Amendment Act 2019 to establish regulations for the electronic monitoring and enforcement of road safety.
• Reducing human intervention and related corruption will be achieved by establishing vigorous electronic enforcement for traffic offences.
• A strong electronic enforcement system with speed cameras, closed-circuit television cameras, speed guns, and other similar equipment will guarantee that more offences are caught.
• All toll booths along national highways had the equipment necessary to install the chip in cars without it.
• The car was still allowed to operate on highways, on the far left of the FASTags lanes, in circumstances where it was not possible to equip vehicles with FASTag immediately for any reason. However, these vehicles had to pay twice as much in tolls.
• Vehicles without FASTag on national highways were subject to double user fees or fines, which were also in compliance with the National Highway Fee (setting of rates and collection) Rules, 2008. There is no report of whether these rules have been entertained or not.

Fastag and Digital India

It is an initiative towards the Digital India Mission launched by the government of India.

The Union government has launched the Integrated E-Way Bill System that works in sync with the FASTag and RFID and will help in keeping the vigilance of commercial vehicle movement on highways, giving impetus to the Center's flagship Digital India initiative to ensure better digital compliance and check Goods and Services Tax (GST) evasion.

The new program has been added to the tax officers' mobile e-way bill application. It will provide real-time tracking information for commercial vehicles and e-way bill vehicles to help catch tax evaders who are abusing the e-way bill system.

Conclusion

FASTag is an essential digital application that citizens of India will use. However, there can be competition among the best service providers such as Paytm and other UPI. In the digital economy, a variety of service providers will offer incentives and schemes. The Indian government should also broaden the framework to promote growth and ensure objectivity and openness as a component of good governance.

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