The collection began to decline in the financial year 1997-98 when the economy was hit by recession and industrial growth became sluggish. Again in the budget estimates for 1998-99, the octroi target was retained at Rs 84 crore without any special measures to ensure that the last year's experience was not repeated. But the year turned out to be really bad for the corporation. Alarmed at the decline, the then KDMC Commissioner Madhukar Kokate had appointed DMC Sonawane as the octroi in-charge. Following strict vigil and the modernisation of octroi centres, collections picked up, but only marginally.
Records show that the collection from industries has plummetedin the last two years.
In 1997-98 the octroi collection fell to Rs 17.76 crore from the previous year's Rs 25.21 crore. In 1998-99 it fell further to Rs 12.99 crore. The DMC faces an increasingly uphill task with increasing resistance from the manufacturers and traders. To make matters worse the state govrnment recently announced its decision to abolish octroi in municipal council areas. After Mumbai this is the second highest collection by any civic corporation in the state.