Monday, May 17, 2021

Liquor policy: Govt divides Delhi into 32 ‘zones’ to streamline excise earnings

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New Delhi: The Delhi government has made some structural changes to the state’s excise policy to augment its liquor revenue, including dividing the city into 32 zones and ensuring allotment of licenses on a zonal basis. The proposed policy, unveiled on Monday, also aims to recover projected revenues mostly through rationalisation of licenses as well as reducing duties and tax imposed on each bottle to “nominal rates”, apart from tightening protocols for issuing license to wholesale distributors, according to a document that HT has seen.

Delhi currently earns 6,574 crore each year through excise revenue. Through the proposed policy, the government plans to increase its annual revenue by 1,500-2,000 crore, Delhi deputy chief minister Manish Sisodia said in a press briefing on Monday.

Delhi currently has 849 liquor shops. These, however, are not equally distributed, which Sisodia said has proved to be an obstacle to the revenue Delhi earns through liquor trade.

He said. “There are some areas of Delhi where liquor is overserved and there are some areas of Delhi where liquor is underserved or unserved. This is the fundamental reason why in Delhi liquor mafias work. You all know that Delhi has 272 wards. Of these, 79 wards have zero liquor shops. Around 45 wards have just one shop.”

“Around 58% of Delhi is either unserved or underserved. Based on liquor sale distribution only 8% area of Delhi is normally served. There are around 37 wards where more than three liquor shops are present. On the other hand, there are 54 wards in Delhi where liquor is over-served some of these wards have more than 10 shops. This means in 20% of Delhi liquor is over-served. It is also to be noted that 50% of liquor shops in Delhi are present in just 45 wards. This clearly shows that in Delhi the liquor sale distribution is very unequal. The maximum revenue is coming from 189 liquor shops of just 46 wards. This also shows that from other areas misappropriation of revenue is taking place,” said Sisodia.

The government plans to keep the total number of vends intact, reshuffling them to ensure a more equitable distribution across 272 municipal wards in the city, the New Delhi Municipal Council (NDMC) area and the Airport, which has been classified as a ‘special zone’.

“Delhi will be distributed into pre-defined zones. Each zone will have an equal number of A category, B Category and C Category wards. A category would be the wards where the vends have the history & potential for higher sale, B category would be wards with history & potential for medium-level sale and C category would be wards which have history & potential of low sales. This method of zoning will ensure that each zone operator will have a fair and equal chance of generating optimum revenue,” read the recommendations by a Group of Ministers (GoM) in the document concerning the excise policy.

Under the proposed policy, Delhi is supposed to be divided into 30 zones with 27 retail liquor shops in each. Other than that, the NDMC area will be one zone with 29 shops and the airport will be another zone with 10 retail shops.

It also recommended that wholesale licenses should only be to experienced distributors who cannot be into manufacturing of liquor and in retail trade. The government in its report cited that manufacturers and retailers doubling up as distributors or using proxies in distribution leads to lapse in duty collection that arise on trade of liquor in each level – starting from a distillery to a household or a bar.

The proposed policy also stresses on rationalising licenses. It has either merged or discontinued several licenses.

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