Deshmukh forms 14th panel to abolish octroi

MUMBAI: Maharashtra chief minister Vilasrao Deshmukh has decided to form yet another committee to consider scrapping of octroi. Maharashtra, the only state charging octroi, has already had as many as 13 committees to study the issue.

The new panel would be formed under principal secretary (urban development) and would comprise traders and municipal commissioners of civic bodies, Mr Deshmukh told a delegation of traders. Mr Deshmukh assured the delegation that the state was committed to abolishing octroi, he gave no timeframe.

Earlier this year, a government panel strongly recommended octroi abolition and suggested ways for municipal corporations to generate revenue. But the government is yet to take any action.

The fate of previous committees appointed by the government has been similar. While Mr Deshmukh said the government was in favour of octroi abolition, he was clear that a consensus would have to be evolved among all stakeholders. He said the loss of octroi revenue would not be a big blow to municipal bodies.

“Bigger corporations presiding over big cities that generate 80% of their revenue from industry and professionals and only 20% from octroi won’t face much of a problem if octroi is abolished. But fiscal health of smaller corporations would suffer. Alternatives have to be worked out,” Mr Deshmukh said. He said the state finance department was examining the matter.