Octroi remains the largest revenue source for local governments, yet its structure is riddled with fiscal anomalies. Based on a representative sample of urban councils, this study quantifies commodity‑wise variations in octroi rates and highlights their regressive incidence where basic goods often bear higher burdens than luxury items. By proposing a rationalized, revenue‑neutral structure, the analysis aims to make octroi more equitable, efficient, and buoyant. Adoption of the revised rates could substantially enhance local revenues, with gains projected to exceed Rs 5 billion by 2002–03.
