Mandatory use of FASTag - What is it really for ?

Somewhere in last quarter of 2019, government came up with the idea of compulsorily pushing the FASTag onto the front windscreen of our cars. The idea left everyone clueless, the car owners wondered where to paste it  - inside or outside, centre of the windscreen or on either of the sides; the concessionaires tasked with operation and maintenance of national highways wondered how to segregate the FASTagged and non FASTagged vehicles at 543 toll plazas across India; the banks wondered how to deal with potential scams that are going to emerge out of linking the bank accounts with FASTag system, further denting the already deteriorating image of our banking system.

Only one party to this whole business was unperturbed – the government. That leaves us wondering what the intention behind this is all about. Of course, reducing waiting time at toll plazas is the most obvious reason however the question remains - was it such a big concern that forced the government to come up with this solution ? 

The toll plazas on national highways already have dedicated FASTag lanes however there’s hardly any mechanism in place to ensure that only vehicles equipped with FASTag enter these lanes. If the usage of FASTag has been made mandatory, then what’s the point in having the provision of paying double in cash if any such vehicle enters the FASTag lane – that could have been implemented earlier as well. 

Call this a conspiracy theory or not but I firmly believe that this obligatory push of FASTag is conceived as a weapon in fight against black economy. The government has already indicated that the data collected from toll plazas shall be used for monitoring traffic and for reworking on toll policy. In other words, government has agreed that the data (vehicle registration number, bank account linked with FASTag system etc.) will be accessed by the agencies whenever they wish, this is where a hidden agenda starts unmasking itself.

Is the government planning to correlate the data collected from FASTag system with the data collected from E-Way Bill system? Pursuant to the notification of GST ACT, the e-way bill generation system is already in place and is used for tracking goods movement.

Here’s what I feel the problem is and how the government plans to tackle – imagine you are a company working in Madhya Pradesh. As the financial year end approaches, in order to hike up the expenses in your books, you engage the services of a vendor in Rajasthan and place an order for supply of raw material. The vendor generates the e-way bill and the trucks carrying the ordered material, supplies the same to your premises. All well, isn’t ? but there’s a catch – what if the order was never meant to be executed, the trucks never left the vendor’s stockyard and the material was never delivered. The company in Madhya Pradesh placed a placebo order and the payment was duly transferred with an understanding that the vendor shall transfer the payment back in ‘cash’ after deducting his agreed margin. This way the company in Madhya Pradesh converted what could have been its taxable income to unaccounted cash resulting in loss to the government exchequer.

Here’s how FASTag is going to prove a vital tool for the government – any truck carrying goods from Rajasthan to Madhya Pradesh as in our hypothetical case, will have to pass through certain toll plazas as there’s simply no way possible without them. The transporter enters the vehicle details, details of goods etc. and generates the e-way bill for the journey. Once our truck passes through a toll plaza, the details like vehicle number and payment deducted gets stored in the bank’s server linked with the FASTag. The government will simply have to match the entry against the data generated through the e-way bill system. In an instant, government shall be able to check whether a consignment for which the e-way bill was generated, actually made its way across or not.

At this point many readers might argue that this would have been possible in the existing scenario as well i.e. the government could take the data from the toll plaza agency and match it with the e-way bill system. However, the same is not practical owing to two reasons – first, the transporter can claim that it paid the money in cash and had taken the receipt as well but why the transaction is not showing in the toll plaza’s data is not his concern and second, the whole process of collecting data from hundreds of individual toll plazas is a cumbersome exercise. It is a well known fact that many toll plaza operators have installed ‘bypass’ provisions in their system that hides the actual number of vehicles that have used that toll plaza from the government. Thus, the government can never be sure of any information received by them.

However, in FASTag regime the transaction takes place digitally i.e. money is going to get deducted directly from the linked bank account. Thus, there’s no way a transporter can claim to have made the payment in cash. Further, the bank now has the data regarding which vehicle registration number used which toll plaza at what time. A simple software program can match the entries between the data from the banks and the data from the e-way bill system and in an instant the government shall be able to pinpoint the mismatched entries.

Thus, if an e-way bill for registration number MP24XX1ABCD was generated for supply of a consignment from Bhopal to Jaipur, the government can easily check whether a corresponding entry is getting reflected in the FASTag record of MP24XX1ABCD or not.

For the sake of argument, one may come up with the idea of sending empty trucks without any actual consignment of goods. This will ensure that the data gets correlated in both the systems and you achieve your objective by spending a little extra. However, this will carry an inherent risk of getting stopped for a random check anywhere during the journey and falling into a situation wherein on has to explain what an empty truck with an e-way bill showing goods being carried is doing on a national highway.

Overall it would be interesting to see what the government plans to do with the data collected through FASTag system. Only time will tell if it’s a weapon in disguise or imagination of frivolous soul.