Octroi mafia pushing up vegetable prices?

While vegetables are exempt from Octroi, illegal agents in conjunction with Octroi officials charge a tax of their own to let the trucks enter the city, thereby causing an increase in prices

Octroi mafia pushing up vegetable prices?

While vegetables are exempt from Octroi, illegal agents in conjunction with Octroi officials charge a tax of their own to let the trucks enter the city, thereby causing an increase in prices

Blaming middlemen alone for having to pay through the nose for vegetables may not be fully justified after all.

MiD DAY followed the veggie trail from the farm to your plate and found that transporters have to fork out a huge sum to illegal octroi agents stationed at the city's entry points to ensure their vegetable-laden trucks can enter the city without any problems.
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This, in turn, pushes up the prices of vegetables by the time they reach the retail markets.

While vegetables are exempt from octroi, transporters say that unless they pay these agents, officials catch them for overloading their trucks or on some such ruse.

The octroi agents are so called because they also help transporters evade the tax on goods which attract it.

"These octroi agents have an understanding with a few corrupt officials who let our trucks pass through without any trouble if the agents have been paid.

If that has not been done, however, they levy fines for overloading, rash driving or some such thing without basis.

We are left with no choice but to pay these agents a fixed price per truck to avoid such trouble," said a transporter, requesting anonymity.

The trail

MiD DAY gives you a lowdown on how the trade works:

There are five octroi points in Mumbai Mulund (West), Mulund (East), Dahisar, Airoli and Vashi
According to sources, the government earns more than Rs 4,500 crores per year as revenue through octroi.
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But, besides the authorised octroi collectors working legitimately for the government, an octroi mafia has its talons firmly hooked into the racket.
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Their illegally collected octroi is a charade and the proceeds are shared between all involved.

One such illegal octroi agent, requesting anonymity, said that they have to charge a high amount per truck as they have to share it with corrupt octroi officials, policemen, local politicians and even some members of the underworld who are part of the nexus.

He said BMC officers (mostly from the Vigilance Department), MLAs, Councillors and party leaders receive a fixed income from the collections.

According to him, more than Rs 100 crore goes into the pockets of those involved in the nexus every year.

Octroi evasion

During Diwali or other major festivals, demand for dry fruits is high.

About 500 vehicles loaded with dry fruits pass through Vashi naka alone, and octroi agent Paresh operates the racket allegedly extorting Rs 25,000 per vehicle, which is then divided among all involved.

Several methods are employed to evade taxes, and one way is by passing off trucks loaded with dry fruits as grains.
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Sources said 600 such agents are operating in the city. An official from the Vigilance Department of the BMC admitted to the existence of this illegal operation but said the nexus ran too deep for an individual to intervene.

In a month-long extensive campaign, MiD DAY will trace the tangle of farmer-middleman-hoarder-politician nexus that is ultimately leaving a sour taste in your mouth.

Did you know?
Vegetables, grains, milk and spices do not attract any octroi. However, 7 per cent octroi is levied on cosmetics, plywood, marble, wine and pan masala. 3 per cent is levied onu00a0 cloth and crude oil while 5.5 per cent in levied on electronics.

So far in the mid day campaign...

Peeling layers off the onion trade
As the hue and cry over an unprecedented hike in onion prices hitting R100/kg ebbs, MiD DAY exposes the invisible hand of the cartel behind the rise.

Economics of the vada pav
Prices of pulses and vatana, ingredients that go into making your favourite vada pav, go through a 150 per cent hike from the farmer's hand till it reaches the retailer.

Who's adding to your food bills?
Food inflation hit 17% last month. The common man has almost resigned to the fact of steady price rise. But farmers are none the richer. MiD DAY aims to fill the gaps from the farmer's hand till your plate.

Blackmail on the fields
Vegetable mafia manage to arm-twist the farmer into selling stock at a ridiculously lowu00a0 price in the traders' market, as the farmer does not have the money to cart his goods directly to Mumbai.