Grappling with a funds crunch and in a bid to shore up finances to complete crucial civic projects, the Pune Municipal Corporation has proposed a hike in octroi charges on all items except essential commodities. With the hike, the civic body is expecting to earn an additional Rs 15 crore per month.

The PMC has defended the hike, citing reasons like need of funds for the increased salaries of the civic employees under the Sixth Pay Commission, development work to be carried out in Uruli Devachi and Phursungi villages after the protests by the local residents over the dumping of garbage.

The proposal says that the octroi charges on all the items should be raised to the maximum charges for the year 2009-10. The minimum to maximum range of octroi charges on all items has been mentioned in the Schedule 1 (Rule 4) and PMC wants to go for the maximum limit of octroi charges.

The proposal says that the octroi had last been revised in June 2008. In the present fiscal (till October 21), the octroi amount collected is Rs 358 crore, while the target set before it is Rs 914 crore. In terms of percentage, PMC has so far collected only 39.18 per cent of octroi considering its target this year.

The proposal further explains the reasons for the reduction in octroi collection. "First of all, as compared to the previous year, the rates of octroi had been brought down by 33 per cent. Thereafter, the world economic downturn left a bad impacts on the overall business, resulting, among other things, the slowdown in the local construction sector."