30 consumption.A Octroi is found in many of the local jurisdictions in India, Pakistan, Nepal, and until 1981, Bangladesh. In Calcutta the octroi was introduced by the state government for the entire metropolitan area, with its revenue to be shared among the various local bodies and the Calcutta Metropolitan Development Authority. Despite the revenue success enjoyed by octroi in India and Pakistan, there are strong movements to abolish it. The Indian states of Gujarat, Karnataka, and Madhya Pradesh, have abolished octroi. Further, it has been condemned regularly by analysts of local government finance, including numerous commissions established by the Government of India (Bahl and Linn, forthcoming, Chapter 8). A major problem is that octroi may greatly increase transpor **t** ime and costs, and may therefore increase the price of imported goods. The magnitude of time lost is exemplified by the Mysore Taxation Enquiry estimate that "between Bangalore and Mangalore, about 800 km, a vehicle has to stop for 36 hours and 40 minutes at checkposts." 100. The octroi base is the value, the weight, or the number of items entering a local jurisdiction. In Bombay, the tax is imposed according to value for some commodities, according to weight for others, and on a specific basis for oil entering the city via a pipeline. In Karachi, the tax is imposed according to weight for commodities entering by road, but according to value for commodities entering via the city's port. Rates vary according to complicated schedules, and some goods and commodities in transit are exempt. The tax is collected by clerks at octroi stations: These are located at checkpoints on roads at jurisdictional borders, at railroad stations, at airports, and at docks. In Ahmadabad, India (a city of over 2 million), there were 34 octroi stations in the 1970s - 18 rail checkpoints, 15 road checkpoints, and 1 air checkpoint. There is usually no assessment problem when the levy is specific; however, an invoice is required. Ahmadabad assessors are equipped with a manual of market values for double-checking invoiced amounts (Bahl and Linn, forthcoming).

101. Other problems with the octroi, such as spoilage of merchandise and bribery of octroi staff, occur frequently. Nanjundappa (1973) estimated that in India delays to vehicles at border crossings reduced annual vehicle utilization and increased variable vehicle operating costs by approximately 25 percent. Not all of this cost can be directly ascribed to octroi, but the magnitude of the figure indicates a considerable loss in efficiency.

102. Octroi therefore gives locally produced commodities a pricing advantage over commodities imported from outside the metropolitan area. Octroi may curtail even intrametropolitan trade if a metropolitan area has grown beyond the boundaries of the taxing jurisdiction. As a final irony, the tax can provide a cogent disincentive for metropolitan - integration under an area-wide authority consolidation of fragmented local authorities would

**_&I_ Pats** of **the** diion on octroi is **taken** fiom Roy Bahl **and** Johannes Linn, **Urban** Public Funance and **Administraton** in Doveloning **Countries,** (forthcoming).