Rs 6,000-cr-divide between Sena-BJP

Jan 18, 2012, 07:46 IST | Varun Singh

The amount is the BMC's target for octroi collection in the current fiscal year; while Shiv Sena is in favour of the tariff, BJP wants it abolished

The amount is the BMC's target for octroi collection in the current fiscal year; while Shiv Sena is in favour of the tariff, BJP wants it abolished

Elections are often perceived as times of change. And it isn't any small change that has seemingly created a rift between coalition partners Shiv Sena and BJP. It's a matter of Rs 6,000 crore.  

MiD DAY had reported on January 6 ('Manifest(o) of discord?') about the BJP deciding to have a separate manifesto for the upcoming Brihanmumbai Municipal Corporation (BMC) polls. A major bone of contention has been the issue of octroi -- while Shiv Sena is in favour of it, BJP wants the tax rescinded. Interestingly, Rs 6,000 crore is the extended target of the BMC for octroi collection in the current financial year.

Trade secret!
According to an insider working on the BJP's manifesto, the party is adamant that octroi be removed from BMC and wants its views to be made public prominently. Analysts say BJP, which relies heavily on the trader/business community in the city, is demanding that the tariff be abolished to keep its vote-bank happy.

Octroi is collected at various entry points of the city, for example: Dahisar toll naka, Mulund, Mankhurd etc. The tax that's levied on almost all goods brought in to the city forms the most important source of revenue for the corporation.

Death of taxes?
"The octroi that's collected can be up to 8 per cent of the total value of the merchandise and it escalates the price of the commodity when it reaches the markets. There are just too many taxes that are already levied upon goods brought in to Mumbai. This octroi is another add-on. Hence, the party wants octroi abolished in the interest of the common man," said the BJP insider.

"When other municipal corporations have come up with various alternatives to octroi then why can't BMC do the same? We do need to abolish octroi, because there are many irregularities that are associated with it," said Raj Purohit, BJP's Mumbai unit chief.

However, Shiv Sena has a very different point of view. "If octroi is done away with, where will we get the money for development work? Octroi is the biggest revenue generator for the civic body. BMC has too much expenditure related to city infrastructure and very limited sources of income. We cannot afford to lose these sources," said Shubha Raul, ex- mayor and senior Sena leader.

Setting sights higher
Meanwhile, according to reports, between April and December 2011, BMC had collected nearly Rs 4,500 crore through octroi. The total target has now been hiked to Rs 6,000 crore for this financial year.

BMC is also expecting to cross the target of Rs 500 crore per month with octroi. Octroi is the biggest source of revenue for the civic agency that had a budget of Rs 21,000 crore for the current financial year.

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