LBT strike fallout: Traders incur Rs 5000-crore loss

LBT strike fallout: Traders incur Rs 5000-crore loss

Civic bodies to also take the hit; Sena MP says traders would approach NCP chief Sharad Pawar.

Civic bodies to also take the hit; Sena MP says traders would approach NCP chief Sharad Pawar.

The traders’ strike has most certainly been a consumers’ nightmare,but the biggest losers have been the traders and shopkeepers themselves. The civic bodies of both Pune and Pimpri-Chinchwad also stare at the possibility of the strike throwing their annual revenue target off balance.

While there are different estimates of the loss of business incurred by traders due to the ongoing strike against the government’s stand to implement Local Body Tax (LBT),the figure,by conservative estimates,is being pegged at over Rs 5,000 crores.

According to Fatehchand Ranka,the treasurer of Federation of Traders Union of Pune (FTUP),the annual turnover of traders across Pune and Pimpri-Chinchwad is a total of Rs 2 lakh crores per annum,which translates to about Rs 550 crores worth business per day. “In all,over 2 lakh shops remained closed in PMC and PCMC areas for the past 10 days. They were also shut for about a week last month. In past 10 days,the estimated loss of business can easily be estimated at Rs 5,000 to 5,500 crores,” said Ranka.


Agreeing with Ranka,Popatlal Ostwal,president of FTUP,said,“The figure of loss for both PMC and PCMC jurisdictions taken together during this period is over Rs 5,000 crores. The state government too has lost several crores in taxes. During times like these,when the government needs more funds to tackle the drought situation,this loss will do more damage. But the government has taken its time to concede our demands.”

In this connection,Ranka said the government collected Rs 150 crore through these two civic bodies taken together in two months when the old tax regime was in place. Since the traders are not going to pay LBT since April 1 till,the local bodies stand to lose about Rs 150 crore in tax.

According to a PMC official,the average collection of octroi before April 2013 when LBT came into effect,was about Rs 90 to 100 crores a month. Since April,they have so far collected only Rs 8 crore.

“Traders under PMC and PCMC paid a total octroi of over Rs 140 crore per month to these local bodies. We have made it clear that we don’t have any intention to pay LBT from April 1. Moreover,for the past one and a half months nothing has been bought or sold in PMC and PCMC,as a result of which export has also been stalled,” said Ranka.

However,Pimpri-Chinchwad Municipal Commissioner Shrikar Pardeshi said,”70 per cent of the LBT collection will come from the industrial sector. We will definitely be affected,but not by much.”

Shiv Sena MP Gajanan Babar,who also heads the PCMC traders federation,said the traders have now appealed to NCP chief Sharad Pawar to look into the issue and resolve it.

“The strike is not only affecting the consumers,but the traders alike,as they have lost thousands of crores to lack of business during this period. Malls that are running under police protection are fleecing the customers.

“Yesterday,we noticed sugar being sold at Rs 52 a kilo at a mall in Pimpri-Chinchwad,when its wholesale value is only Rs 31. The situation will certainly worsen from April 20 onwards when local bodies will start issuing notices to traders for not paying LBT. We have now sought Sharad Pawar’s intervention in the matter before it goes out of hand,” said Babar.