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Octroi withdrawal may hit local bodies Saturday, May 5, 2001

AHMEDABAD: Political realisation is finally setting in on the fallout of abolition of octroi duty from municipalities by the state government from May 1. While the state Congress, officially, is silent over the issue, leaders admit that in one deft stroke the government has clipped the wings of these local self-governments after they voted the BJP out of power.

Rumblings of protests have already started in some quarters , particularly in Vadodara, where the Congress leaders feel the civic bodies have been financially incapacitated with an ulterior motive.

From Tuesday, the state government abolished octroi and promised the 143 municipalities and district and taluka panchayats Rs 194 crore to offset the loss at an incremental rate of seven per cent per year. But the government has not set up escrow account or an independent mechanism where these local self-government can withdraw their money automatically.

The abolition of octroi had been expected for the past couple of years but the government was adamant that it could not support these local self bodies. "Now suddenly when the government has run overdrafts of over Rs 800 crore and has been bogged down with the massive cost of managing the drought and quake rehabilitation, the government finds money to support these bodies", says Congress leader Madhusudhan Mistry.

But many like Mistry are just whining silently while the party as a whole is silent on the issue barring the leadership in Vadodara where almost all municipalities are in Congress control.

Vadodara district panchayat president Ranjitsinh Rathwa has threatened a people's movement, including rasta-roko, to oppose the move as he feels the BJP had taken away the income from the local self governments and there was no guarantee whether the government would disburse funds under the new dispensation with regularity and without discrimination.

VC Trivedi, director of municipalities, says all the municipalities, without exception, are facing a major financial crunch and octroi was their sole income to foot the electricity, water and infrastructure maintenance bills as well as paying salaries. But, he said, the new system could be an advantage if pursued properly.

Hasmukh Patel, spokesman of the state Congress, fears the government will now arm-twist all the non-BJP municipalities and the people will have to suffer. However, he said, the Congress never fought panchayat and nagarpalika elections on the party symbol and so we can't take a stand on this.

The BJP had suffered major political reverses in the elections to district and taluka panchayats and the six municipal corporations which were held last year. Out of the 26 districts, the party lost in all but Porbander. Out of the 143 municipalities, elections for 82 are still to be held and in the remaining the municipalities which are currently in power, the non-BJP parties and independents have a majority stake.

Says executive director of the Municipal Finance Board, M B Parmar, "we are waiting for the guidelines, from now all the money will come from the finance department". He admitted that the municipalities were in bad shape and the daily income from octroi coming directly in its coffers were a great help.

Natwarlal Shah, another Congress leader, says his party had perhaps missed the implications of the abolition of octroi in municipalities. "Soon the drought hit and cash-strapped Congress presidents of the municipalities and panchayats will have to come down on their knees to get grants from the government and then the game of politics will begin. We will soon have pressures for defections and rebellions and I won't be surprised if the BJP takes over control of many of these Congress held bodies through the back door".

 

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