Andy Mukherjee: Are highway tolls driving India's middle class to ‘road rage'?

Mint

26-05-2025

The American way of life in the second half of the 20th century came to be synonymous with big cars, bigger trucks and sprawling freeways on which they scurried about like purposeful ants. Cheerleaders point to productivity growth and the 24 cents saved by private industry for every dollar invested in the US highway network; critics talk about communities gutted by asphalt and the weakening of social ties. Decades later, the car economy, with all its promises and pitfalls, has latched on to a new host half a world away.
At 6 million-plus kilometres, India's road network is the world's second largest now after the US, according to official data from New Delhi. Leave aside the vast differences in their quality, the most-populous nation has more than twice as many kilometres of roads per sq-km of land as the US, a much bigger country by size. China, which has built a lot of highways but chosen high-speed trains as the focal point of transport, has a much lower density.
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For inter-city travel, India's template ought to have been 21st-century China, not 20th-century America. The fastest train journey between Chennai and Bengaluru, big hubs of activity, takes over four hours. In that time, one could go from Beijing to Shanghai, a distance nearly four times longer. Whoosh, the Jakarta-Bandung line that Indonesia built with Beijing's help, is a good model. India, however, doesn't want a new dependence on China, even though its own first high-speed line, being built with Japan's Shinkansen technology, is running years late.
Roads hog the limelight in India. Much of its national highway system was built in the past 25 years. It has been the country's single-largest infrastructure development, ahead of railways and power, with nearly $30 billion invested last year. But since the network has been expanded with costly debt, road fees tend to be high.
India's car-owning middle class (fewer than one in 10 households) feels squeezed by the $7 billion it pays in tolls every year. The National Highway Authority, which racked up more than $40 billion in debt, is deleveraging. It's selling assets to private operators and investment trusts; it's also securitizing a part of its portfolio. But no matter who owns them, debt financing means roads still have to generate revenue. The burden on motorists will only swell as new highways get constructed.
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The US confronted the debt-financing problem well before President Dwight Eisenhower started its interstate highway programme in 1956. Toll Roads and Free Roads, a 1939 report prepared for the US Congress, rejected the usage-fee option as revenue from traffic in many places would not be enough to retire the bonds needed to back them. So the funding came from the government, which taxes motorists on petrol and diesel.
However, Indian motorists pay 30% more for fuel than the average American. Then there is the vehicle itself. The auto industry complains that hefty taxes have put cars in the same category as drugs or alcohol. Half the cost of a new SUV is tax. It isn't hard to see why consumers are unhappy.
The logistics industry is thrilled, though. The share of roads usage for freight transport has grown to 65%. Some of it has come at the expense of the British-built railways, once the cornerstone of the subcontinent's urbanization. Blue-collar migrant workers have no other choice. Trains moving slowly at 35-50kmph connect their homes in villages to their workplaces in cities.
For the middle class, however, the romance of the Great Indian Railway Journeys has faded. Just like in the US, they're being pushed towards highways for relatively shorter distances and air travel for the rest. This is when a dozen small airports haven't had a single passenger in months, according to Bloomberg News.
Within cities, subways are coming up even in places where they aren't a practical option. Meanwhile, between cities, 'range anxiety' on highways means slow adoption of electric vehicles.
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No wonder roads account for 93% of carbon emissions from Indian transport, compared with 84% in the US and 81% in China. 'Our malfunctioning toll plazas, with their long queues, cause waste of fuel, underutilization of the vehicle fleet, loss of productivity, and contribute to intense pollution," says Anil K. Sood, a Hyderabad-based public policy analyst.
In a deeply unequal society like India's, the cost of a car-centric economy is felt disproportionately by buyers of entry-level cars; they have practically gone on strike. It is serious enough for the government to consider proposals like an annual highway pass to ease the burden. But those will be temporary relief at best. Better public transport is what will make the middle class breathe easy. Not cars. ©Bloomberg
The author is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia.