Senior officials of the BMC’s octroi department are opposing the civic body’s plan to outsource part of its operations.
The BMC, unable to rein in the rampant corruption in the octroi department, is turning to private contractors to curb duty evasion and boost collections. But the officials claim that this will have the opposite effect.
At Rs4,500 crore per annum, octroi is the single largest source of income for the country’s richest civic body. This year, however, collections have fallen, thanks partly to the economic slowdown.
The administration has drafted a proposal to appoint private contractors to collect revenue at all railway entry points in the city. This model is seen as a way to curb the loss of revenue at these points, which the BMC itself estimates at Rs200 crore.
As per the plan, a fixed share of the collections will be handed over to the BMC by the contractors, who will be allowed to retain the rest.
But a senior octroi department official claimed on condition of anonymity that the contractors would encourage transporters who currently bring goods by road to use the railway network, affecting collections at the five major road octroi nakas. Over 95% of the BMC’s octroi collections come from these nakas.
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