Gujarat to abolish octroi from Nov 15

The Gujarat government has decided to abolish octroi from November 15, raising concerns of cut in revenue collection among several municipal corporations.

The municipal corporations of Vadodara, Ahmedabad, Surat, Rajkot, Bhavnagar, Junagadh and Jamnagar will be facing severe financial crunch, as octroi duty collections comprise 65 to 70 per cent of the total earnings in these corporations.

According to experts in the civic bodies, the Gujarat government will have to shell out more that Rs 2,000 crore annually, as compensation for the loss of octroi revenue to these seven civic bodies. However, Deputy Municipal Commissioner of Vadodara Municipal Corporation (VMC) P R Kharsan plays down the issue.

"The civic body has nothing to worry about its financial soundness as long as the state government is committed to compensate it," Kharsan remarked.

Kharsan hoped that as promised, the government will compensate the VMC with Rs 250 crore with an annual increment every year.

On abolition of octroi, VMC is set to lose a steady income of Rs 60 lakhs per day from November 15, which is celebrated as the Labhpancham day in Gujarat.