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Increase in Toll Collections on Indian National Highways: A Sign of Economic Recovery

News:

Toll collections on some of India's busiest national highways  has witnesed an increase in the recent past.The highway connecting industrial hub in Pune to Ahmedabad has shown robust double-digit growth.The Anil Ambani-led Reliance Infrastructure said that it has recorded a 10% increase in toll revenue in roads in the west and south. Those in the north have grown more slowly at about 6% due to ongoing construction works.

Source: ET

SNP Insights:

Even though there is an increase in  toll collections on some busiest indian nationa highways, it cannot be considered as a good sign of relief for infrastructure companies as many of the toll rates of national highways are linked to the Whole Sale Price Index (WIP) which is negative now.But the higher sales of trucks, increased government capital expenditure and higher demand of capital goods may bring hope to the infrastructure companies that the economy may revive soon.

Source: SNP Infra Research