Ludhiana, August 6
In a major decision which may have far-reaching political and financial implications, the Punjab government is understood to abolish the octroi in the state by August 15. Well-placed sources in the government revealed that a final announcement is expected to be made by the Chief Minister, Mr Parkash Singh Badal on Independence Day.

Following a series of meetings held by the committee headed by Mr Arunesh Kumar Shakir, MLA, and comprising members who include Mr Bhag Singh Mallah and Mr V.K. Auri, Secretary, Local Bodies, government is said to have decided to abolish octroi in the state.

The Departments of Finance and Local Bodies are said to be jointly working out a strategy to assess the revenue loss on account of the octroi abolition and the ways and methods to compensate it, the sources said, while adding that both the departments have already accorded their approval to this move.

The last meeting of the committee headed by Mr Shakir was held at Chandigarh on July 20. It was attended by all members. The sources revealed that the committee members and some government representatives have also visited the states of Haryana, Rajasthan and Madhya Pradesh, where there is no octroi, to see the impact of octroi abolition there. The government is said to have sought detailed reports from these states to find out how they were managing to make up the revenue losses incurred on that account.

The move is strategically timed and obviously aimed at the forthcoming elections to the state Assembly as the ruling Shiromani Akali Dal (Badal) and the Bharatiya Janata Party had promised to abolish octroi in the state after coming to power. Moreover, the BJP has also been pressing for octroi abolition given the fact that most of its support base remains in the urban areas, which will be more concerned about this decision.