NEW DELHI: The Arvind Kejriwal government has admitted that the new Excise Policy 2021-22 resulted in a “revenue loss” to the state exchequer, “windfall gains” to select liquor traders, and a “reduced number of liquor shops” in the state.
The state government’s cabinet note on the withdrawal of the new excise policy admits to almost all the lapses pointed out by this newspaper in a series of articles over the last two months. Underlining the “revenue shortfall” under the new policy, the cabinet note says: “During the Q-1 of the current fiscal (2022-23), Rs 1,485 was realised which is 37.51% below the budget estimates for the current fiscal i.e. Rs 2,375 for Q-1. Even this includes Rs 980 crores of refundable security deposit.”
Another reason given by the cabinet in its note was “windfall gains to license holders”. Explaining this, the note says: “Further, 09 Zonal Retail Licensees have not availed extension during the extension period from April 2022 and 03 more Zonal Retail Licensees have conveyed their intent to not avail the extension beyond July 2022. Out of the 14 wholesale licensees, 04 wholesale license holders have so far opted to discontinue their licenses. The revenue decline on account of surrendered zones is estimated to be around Rs 193.95 crores per month.”
The note further says, “It is pertinent to note that while the exchequer is losing significant revenue due to vacation of zones, there has been no decline in the sale of liquor and the slack has only been picked up by the remaining license holders, which amounts to windfall gain to them. The data from excise department shows that the sale of liquor in first quarter of current liquor in the first quarter of the current fiscal 2022-23 has increased by 59.46% in case of whisky and to 87.25% in case of wine as compared to the corresponding period of FY 2019-20, but the same could not be captured as an enhancement to the government revenue.”
With zonal licensees pulling down shutters by refusing to seek extension of their licenses, “the total number of shops that are operational at present has been reduced to 468 as against the targeted number of 849, which is leading to a number of unserved areas and defeating one of the main objectives of Excise Policy 2021-22. This naturally amounts to windfall gains for existing license holders…”
The note concludes by saying “it can be reasonably concluded that continuation of the Excise Policy 2021-22 any further can be expected to have adverse revenue implications apart from perpetual windfall gain to certain license holders…”
Booze shops to stay open till Aug 31
Lieutenant Governor Vinai Kumar Saxena on Monday approved the AAP government’s move to extend excise licenses of private liquor vends as well as hotels and bars by a month till August 31. P4