HYDERABAD: After the public outcry over the illegal activities of liquor syndicates, the state government is veering round to the view that the best way to break the nexus between liquor merchants and politicians is to revert to the practice of issuing licences by draw of lots.
According to highly placed sources, the government is showing interest in reverting to the earlier practice following excise department’s proposal that the government may adopt this method of issuing licences or take over the retail business. But the government is averse to running the retail business as told by chief minister N Kiran KUmar Reddy to a delegation that called on him recently seeking reversal of the transfer of Kothakota Srinviasa Reddy, chief of SIT of the ACB which is investigating the illegal activities of liquor syndicates.
The practice of fixing the licence fee for each shop had existed till 2005.
Under it, if there is more than one bidder, the successful bidder used to be selected by draw of lots. The method was scrapped to introduce auction of licences with an eye on more revenue.
As liquor business promised greener pastures, even those engaged in real estate business entered the fray and, as a result, the price of licences went up.
To recover the costs, merchants began selling liquor at more than the Maximum Retail Price (MRP) after buying protection from politicians, and excise and police officials.
At present, there are 6,596 shops in the state. The number, which was 6,000 in 1998-99, went up to 10,000 after the government issued licences indiscriminately. With various sections of society rising in protest, the government brought the number back to 6,000.
According to an excise official, the excise year begins on July 1 and the exercise of fixing the price of licence for each shop in the state has begun. If the government cracks down on sale of liquor at more than the MRP and keeps the licence fee exorbitantly high, the auction may not attract many bidders.
At present, the excise revenue stands at Rs 19,000 crore, of which Rs 4,000 crore comes from licence fees.
“We are striving to find a way out to ensure that there will be no fall in the excise revenue and, at the same time, all licences are sold at the prices we will fix,” the official said.