Octroi gone, April salary of civic staff a question mark

Revenue through LBT, even if it begins with the start of the next fiscal, is unlikely to meet the salary bill for the month.

Replacement of octroi with Local Body Tax (LBT) has put the Pune Municipal Corporation (PMC) administration in a fix. How to pay the salary of employees for April, the first month of the next fiscal?

Octroi being done away with, there will be no octroi collection from March 31, the end of the current fiscal.

Revenue through LBT, even if it begins right at the start of the next fiscal in April, is unlikely to meet the salary bill for the month. Every month, Rs 40 crore is paid as salary for the 17,000 staff, and Rs 10 crore as pension of retired employees. Octroi accounts for around 40 per cent of the total revenue.

"We don't expect revenue collection from LBT starting from first day of the financial year. It will take months before something comes to the treasury of PMC from LBT. The second largest revenue source, property tax, also starts coming in from May," said Ulka Kalaskar, PMC chief accounts officer.

She said paying salaries in the first month of the next financial year will be a tough challenge for the civic administration.

"We will have to take a decision to ensure salary of civic staff is not affected," Kalaskar said.

Offering a likely solution, a senior civic official said the PMC should do some financial jugglery in February and March so that some revenue collected in the current fiscal is carried forward to been the salary for the first two months of the next fiscal.

"This means expenditure on development projects this fiscal will have to be cut to some extent so that revenue collected is left for paying salaries in the initial months of 2013-14 financial year," he added.

There is no official communication on implementation of LBT in place of octroi but it is expected by the end of the current fiscal, an official said adding that once the official order comes in, the civic administration would implement LBT and the process would start with the formation of a separate cell for the purpose.

Hike in PMC lab test fee

The civic administration, in a bid to ensure a reduced impact of any adverse fallout of LBT, has started exploring other revenue sources. After increasing property tax, it has now proposed an increase in fees charged for laboratory tests of water and food samples by the PMC lab. The charges proposed is almost eight times higher than the existing Rs 50 per sample.

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