Target looks out of reach amid low octroi growth and realty slump

After earning high returns from octroi and development charges during the economic boom years, the country’s richest municipal corporation, the Brihanmumbai Municipal Corporation (BMC), finds itself in a tight spot with the US-led recession beginning to impact India. The slow growth rate of octroi, combined with the slump in the realty sector, has got the civic administration worried about how it will reach its revenue target of over Rs 16,000 crore in the remaining three months of the current fiscal (2008-09).

Senior civic officials agree that the economic recession in the West will affect the next financial year’s budget but have refrained from forecasting that the burden will be passed on to the citizens. “The Western recession has had some impact on collections, particularly on octroi and development charges, compared to last year. Although some departments may not be able to achieve the increased targeted income set for 2008-09, the revenue collection will be the same as last year. So there wouldn’t be huge losses,” Additional Municipal Commissioner R A Rajeev told a press conference today.

Every year during the budget session, the targets of income earning departments like octroi, property tax, development charges, water and sewerage are increased, keeping in mind the high growth rate and development needs of the nation’s commercial capital. Octroi, which is the largest income earner for the BMC, is reeling under low growth rates this year due to the slowdown.

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