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To offset octroi loss, Mumbai civic body gets Rs647 crore

LiveMint logoLiveMint 05-07-2017 Abhijit Bhatlekar

Mumbai: Maharashtra finance minister Sudhir Mungantiwar Wednesday handed over a cheque for Rs647.34 crore to Mumbai mayor Vishwanath Mahadeshwar as the first instalment of compensation to the Shiv Sena-ruled Brihanmumbai Municipal Corporation (BMC) for the loss of octroi after the introduction of goods and services tax (GST).

Mungantiwar said the government had committed to hand over the compensation for loss of octroi before the fifth of every month. The state government has agreed to pay this compensation factoring in a growth of 8% per annum that the BMC would have collected through octroi, Mungantiwar said.

Octroi was the BMC’s biggest source of revenue and the civic budget for the current fiscal has set a target of Rs7,000 crore. Under GST, the civic body will get this amount as compensation from the state and the Centre.

Corporators from both Shiv Sena and Bharatiya Janata Party leveraged the occasion to flex muscles. In February, after a bitter election campaign to win India’s richest civic body, the Sena edged ahead of BJP, winning 84 seats against BJP’s 82 in the 227-member BMC.

Shiv Sena president Uddhav Thackeray was present at the cheque hand-over event. During Thackeray’s speech, BJP corporators raised slogans hailing Prime Minister Narendra Modi. Sena corporators responded with “Modi chor hai” (Modi is a thief) and hailing Shiv Sena founder the late Balasaheb Thackeray. Corporators from both parties who are allies in power in Maharashtra and at the Centre, nearly came to blows but were held back by senior members.

Thackeray said the loss of octroi check posts had deprived Mumbai of a key security check at the entry points. “The octroi posts were also doubling up as security check posts. Now, the government should deploy police officials at these posts and ensure Mumbai continues to get the protection it needs as the financial capital,” Thackeray said.

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