Exempting motorists from paying toll tax at the city’s five entry/exit points may cost the cash-strapped state government heavily, and it may be forced to differ the decision.
The committee appointed under (now retired) additional chief secretary of the public works department Anand Kulkarni submitted its report with various options, for the political leadership to take a call. The BJP had promised a ‘toll-free Maharashtra’ in its manifesto during the assembly elections held in October 2014. After coming to power, the government had appointed the committee to suggest measures to either scrap the toll tax for entry/exit at Mumbai — at Dahisar, Airoli, Vashi, LBS Road and Mulund — or to exempt small vehicles from the same.
According to the committee’s report, the government will have to pay Rs2,021 crore to buy out the contracts. The option offers exemption to all heavy as well as light motor vehicles from paying toll tax. The second option of exempting only small vehicles from tax will cost the exchequer around Rs250 crore a year and the government will end up paying the amount to compensate contractors’ annual cash flow until 2031. Small vehicles account for more than 80% of the vehicles at these toll nakas, making it a costly affair.
The exemption to small vehicles from toll tax may lead to a rise in the tax levied on heavy vehicles.
“We have two options. We have been deliberating with the finance department as huge financial implications are involved. If we exempt small vehicles, the annual burden will start at Rs250 crore, which will reduce gradually, for the 15 years,” said Chandrakant Patil, PWD minister.
Though the minister said a decision will be taken very soon, the state is most likely to differ the decision for a few more months. According to officials, the announcement will come just days before the BMC election, which will be held in January 2017. “The state exchequer is in no position to take on further financial burden and it would be ideal for the government to make the announcement by December this year to gain maximum political mileage,” the official said.
As part of the assurance given in the assembly election manifesto in October 2014, the BJP-led government announced it will exempt small vehicles from tax at 53 toll plazas across the state from June 1 last year. The annual burden of exempting small vehicles from these toll plazas was Rs404 crore.