Growth in toll charges expected to be lower next year due to low WPI: India Ratings

The growth in toll charges for National Highway users will be lower next year because the Wholesale Price Index (WPI) is hovering at 1.9 per cent this year, lower than the four per cent in FY2018-19, according to India Ratings.

Every year, toll charges for national highways are calculated based on the WPI. A large chunk of highway projects have the formula of three per cent plus 40 per cent of WPI, some are directly linked to WPI, while some projects are assured of a fixed growth rate in toll projects.

The WPI was at 3.9 per cent in FY2017-2018, 4 per cent in FY2018-2019 and is expected to hover at a lower level of around 1.9 per cent in FY2019-20. This will lower growth rate of toll charges for users in fiscal 2021, Vishal Kotecha, Associate Director, India Ratings and Research, Fitch Group, said in a concall on Monday.