A proposal by Nitin Gadkari’s Union Road Transport and Highways Ministry to charge tolls only for the distance travelled by a vehicle on national highways has the potential to revolutionise road taxation in India.

A report in Business Standard says that the ministry, in conjunction with the National Highways Authority of India (NHAI), will be “geo-fencing” the Delhi-Mumbai Highway to track the distance travelled by a vehicle on the highway. The toll to be collected will be based on the distance travelled on the toll road, not a fixed one.

“Geo-fencing” is about using satellite tracking to create virtual geographical boundaries within which the movement of vehicles can be tracked and tolled based on RFID (radio frequency ID) signals.

The proposal is actually more radical than it sounds as it can be extended to collect tolls in areas other than highways. Currently, tolls are collected as congestion charges in business districts (as in cities like London) or at city entry and exit points (as in Mumbai and other cities); with geo-fencing, this charge, or any charge, can be levied on any vehicle within any geographical area, whether in cities or highways.

India can leapfrog the world in road pricing by making users pay for the amount of roads used, rather than using blunt instruments like high vehicle registration charges, road cesses, and entry and exit charges (at the five entry/exit points of Mumbai, the charge applies whether you just cross the point, or drive deep into the congested parts of the city, causing more congestion).

It is worth belabouring a simple point: one should charge for usage of public facilities like roads and not for mere ownership of cars or bikes. It is not your ownership of a car that causes congestion, pollution or travel delays; it is your decision to use your vehicle that causes these problems. Logically, thus, it is the usage of a car that should be the focus of taxation, and not its ownership.

Right now, road pricing is the exception rather than the rule, and even where it applies, it is paid through toll plazas, which actually become another reason for congestion and pollution. If you don’t agree, check the growing queues at every toll plaza and the amount of time spent waiting in queues despite the existence of FASTag lanes.

Geo-fencing – if it begins to work well – solves all issues of road pricing in one leap: it can reduce congestion, charge vehicles according to usage and reduce jams at toll plazas by effectively abolishing the need for them over time. Since the payment has to be made on the basis of satellite-tracked road usage, it follows that the payment can be made electronically, either through a pre-paid card or even a post-paid bill that comes home every month – like an electricity bill.

Consider the advantages:

One, since the charges are based on geo-fencing, you can get both parking and road usage charges in one bill. The parking charges can be zero, if you are parked in a free parking zone, or high if you are parked in congested areas of the central business district. The same for using roads, whether in cities or highways.

Two, it will become easy to track cars, and prevent their theft. One can see this as another invasion of privacy (Big Brother is watching you and your car), but this is no different from the way Uber and Ola or Google track your location.

Three, at some point all toll plazas can be pulled down and traffic movement made free. Currently, given the volume of traffic passing through major city roads and highways, toll gates themselves have begun adding to congestion and pollution.

Four, sharing receipts from road usage between states, and between cities and local bodies, will become more scientific and tension-free. Currently, tolls collected from using a city road may not necessarily flow to the city, and tolls collected from highways may not necessarily go to the regions on which the roads are built.

Five, tolls and road pricing can be more dynamic, with night-time tolls being lower than day-time ones or on holidays. In fact, like aircraft pricing, road pricing can depend on levels of congestion at any point in time. App-based taxi services build tolls and charges into their pricing, and surge pricing can be based not only on demand for services, but availability of roads.

Six, geo-fencing can be used also on two-wheelers and three-wheelers. Currently, these vehicles are mostly spared tolls due the difficulties in physically collecting charges from so many millions of additional vehicles, and also due to the bogus belief that these serve the poorer sections of people. Actually, the two-wheeler industry is segmenting into power and sports bikes (some of which cost as much as cheap cars) and basic personal transporters. It is best to charge every motorbike or scooter moderately for road usage, rather than seeking to charge a Harley Davidson more than a Hero or a Bajaj.

It is worth praying for the success of geo-fencing and toll-plaza free pricing of roads.