Industry slowdown hits octroi

The municipal corporations of Bhiwandi-Nizampur,Kalyan-Dombivli,and Ulhasnagar also witnessed a 20 per cent dip in octroi collection since October-November 2008.

Ajay Vaidya,deputy municipal commissioner (DMC) in charge of the octroi department in Thane said the last good collection was in October 2008 after which it has been plummeting. “In October 2008,we collected 15 per cent more octroi than the previous year’s target. We were hoping to maintain the trend till the end of the financial year. However from November 2008,the situation turned worrisome,” said DMC Vaidya.

Generally,the TMC,which has been collecting around 15 percent higher octroi than the previous year,has to contend with a mere 3.69 per cent now.

“The slowdown in the industry has affected our octroi target. The association of smallscale industries in Thane has submitted a memorandum to reduce octroi as their revenue fell 40 per cent forcing them to cut labour force by the same percentage,” said Vaidya.

However,in Bhiwandi,Kalyan-Dombivli,Ulhasnagar,it is not the civic body that will be affected. The private firms appointed to collect octroi on its behalf have borne the brunt. “Since October 2008,collection has been below expectations. On an average,there has been a 20 per cent loss in revenue,” said Nand Jethani,chairman of Konark Infrastructure,the firm appointed to collect octroi in Bhiwandi,Kalyan-Dombivli and Ulhasnagar.

As the annual collection target agreed upon between the civic bodies and the Konark Infrastructure are in the tune of Rs 100 crore,the losses are immense. Konark infrastructure was to collect Rs 127 crore in Bhiwandi,Rs 94 crore in Kalyan-Dombivli and Rs 102 crore in Ulhasnagar. A 20 per cent loss would mean the agency would be at no-profit-no-loss,or may face a loss.

Jethani said the firm had sought a revision of targets from the civic bodies concerned in view of the poor collections.

“Octroi collection has been hit most by the slump in construction activity. Less construction means less raw materials transported. When people buy houses and occupy them,they buy new things. Less construction activity brings economy that thrives on occupation of new houses to a grinding halt,” said Jethani.

Vaidya also lists the decline in construction activity as one of the main reasons for the dip. “TMC collection of development charges on construction activity,predominantly housing,is 22 per cent less than the previous year. Fuel prices have reduced twice in the current year. After two corrections,the Central VAT has been reduced by 6 per cent,” said Vaidya.