L-G approves one-month extension for excise policy

‘Delhi Cabinet note refers to excise revenue shortfall, huge profits for licence holder’

Updated - August 02, 2022 12:19 pm IST

Published - August 01, 2022 10:23 pm IST - NEW DELHI:

During the first quarter of the current fiscal 2022-23, ₹1,485 crore was realised — over 37% below the budget estimates of ₹2,375 crore.

During the first quarter of the current fiscal 2022-23, ₹1,485 crore was realised — over 37% below the budget estimates of ₹2,375 crore. | Photo Credit: FILE PHOTO

Lieutenant-Governor Vinai Kumar Saxena on Monday approved the Delhi government’s proposal of extending liquor retail licences issued under the revamped 2021-22 excise policy by a month acknowledging that he had “no other option but to agree” to avoid disruption of the liquor trade in the Capital. It was sent to Raj Niwas late on Sunday night a day after being circulated among members of the Delhi Cabinet.

The Cabinet note stated that the Delhi government had decided to revert to the old excise policy, which was in force until November 16, 2021 for a period of six months starting September 1, 2022. Raj Niwas sources said the note also “admitted” lapses including an excise revenue shortfall of over 37% and “windfall profits” for licence holders.

“The L-G noted that he has no other option but to agree with the proposal of the Cabinet for one month’s time for stock clearance to avoid any disruption or closure of retail or wholesale vends of liquor, and to prevent the sale of unauthorised liquor, and avoid a scarcity-induced law and order situation,” a Raj Niwas source said.

According to the source, the proposal stated that the government had taken the step since the Excise Policy 2021-22 had not been able to achieve the desired objectives of fetching greater revenue and since several issues in the policy had been flagged and are under detailed examination and investigation by agencies.

Policy reverses

The Cabinet note, the source said, linked the sudden decline in the number of liquor vends in the city to the implementation of the revamped policy.

During the first quarter of the current fiscal 2022-23, a Raj Niwas source said quoting from the note, ₹1,485 crore was realised — over 37% below the budget estimates of ₹2,375 crore.

“In addition, 14 wholesale licensees have so far opted to discontinue operations. The revenue decline on account of surrendered zones is estimated to be around ₹193.95 crore per month,” the source said.

The total number of liquor shops that are operational at present, the source said, was stated in the note to have reduced to 468 against the targeted number of 849, which was leading to a large number of unserved areas – defeating one of the major objectives of the revamped policy.

“This naturally amounts to windfall gain for the existing licence holders and loss of revenue to the exchequer. There have also been instances of shortage of particular brands,” the source said.

BJP, AAP spar

The move triggered an attack against the Aam Aadmi Party (AAP) government by the opposition Bharatiya Janata Party (BJP) Opposition, which said “tall claims” about the policy now stood “exposed”.

“It is now clear from all data in the Cabinet note that there has been a considerable decline in the government’s excise revenue and AAP leaders’ and Ministers’ coffers have only got further filled up,” Delhi BJP president Adesh Gupta alleged. “The liquor mafia has been given all the benefits at the cost of the government’s excise revenue.”

Leader of Opposition in the Delhi Assembly Ramvir Singh Bidhuri said the BJP’s opposition to the attempt to make Delhi a “liquor city” has resulted in the new excise policy being revoked.

AAP said in a statement that chaos surrounding the new excise policy is nothing but a ploy of the BJP-ruled Central government. “For the sake of politics, they have resorted to antics that are going to hurt the economic situation of the national capital. The BJP and its nominee L-G, are the same people who have been repeatedly threatening liquor licensees by coercing the ED & CBI to take their agenda forward,” the statement said.

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