New Delhi: Last year’s abrupt scrapping of Delhi’s controversial excise duty policy (2021-22) hasn’t made much of an impact on the union territory’s revenue from liquor sales – and the government has non-brands to thank for it. Conscious drinkers can be those.
In 2022-23, the excise department is expected to earn Rs 6,281 crore in revenue (excise duty and value added tax).
While this is short of the target set under the new policy – Rs 9,500 crore – it helped excise retain its position as the second largest revenue-contributor to the government.
Government officials told ThePrint that about 80 per cent of the total excise duty revenue comes from liquor priced between Rs 300 and Rs 600 – a segment where consumers find it okay to switch between different brands, they said.
Although Delhi stands to lose 17 per cent of its excise revenue to neighboring areas such as Gurugram, officials say the satellite has marched on high-end liquor with attractive prices and a more bustling night-time economy. have stolen Factor.
The Delhi Excise Policy launched in 2021 has emerged as one of the biggest controversies surrounding the Aam Aadmi Party (AAP) administration. It was implemented in November 2021 with an aim to improve liquor sales in the capital, and sought to leave liquor sales to private players.
However, it was canceled in September 2022 amid allegations of giving undue advantage to some private players and is currently under investigation.
Delhi then reverted to its old policy (2020–21), where sales are managed by government corporations, with over 500 shops open to city residents.
The old excise policy will remain in force till September and a new policy is being formulated.
Gurugram challenge
According to the Excise Department, the daily average sale in 2022-23 is 17 lakh bottles and the daily average revenue is Rs 19.71 crore.
Speaking to ThePrint about shopping in the Rs 300 to Rs 600 segment, a senior Delhi government official said, “People who frequently shop from this range are not looking for a specific brand, they Select from whatever options are available within the same category. , He said that since 2012-13, there has been an increase in the overall revenue collection.
A total of Rs 6,762 crore was collected as excise duty in 2021-22 against a target of Rs 6,000 crore. In the financial year 2020-21, when the Covid outbreak first hit, the revenue fell slightly short of the same target to reach Rs 5,811 crore.
Another senior Delhi government official said the capital still loses some part of its total excise duty revenue to neighboring areas, such as Gurugram. where alcohol is cheap,
“And this is typical for brands that cost more than Rs 800. Here the consumer is brand conscious. In the Rs 800 and above price category, we are losing around 17 per cent revenue to neighboring areas,” said the official.
The official said that there are many reasons for this and these include availability fast growing brands [which fall in the Rs 800-Rs 1,500 price category]From attractive prices and discounts to longer operating hours of liquor shops and the presence of a night-time economy, which is absent in the case of Delhi.
Given the absence of fast-growing brands under the above-mentioned category in Delhi, their presence could take the total annual revenue to over Rs 7,000 crore, the official said.
“two companies [Pernod Ricard and IndoSpirits] Widely popular brands are currently not registered in Delhi, their licenses not renewed as their names have been included in FIRs of alleged excise duty scam,” said the official. “And this has affected the availability of popular brands, whereas they are still available in Gurugram, for example.”
‘Looking for improvement’
The canceled Delhi Excise policy envisaged a total of 849 shops – including five super premium shops.
However, the opposition raised some concerns over the opening of liquor shops in residential areas non conforming area [Former commissioner (planning), Delhi Development Authority, A.K. Jain explained non-conforming areas as “those that do not comply with the provisions listed in the Master Plan for Delhi — from having no defined land use to not complying with environmental parameters”],
Other senior officials of the Delhi government quoted above Note that a peculiar problem currently exists in non-conforming areas, where there is no presence of government run liquor stores.
The government cannot open liquor shops in non-conforming areas as they do not have defined land use, and this acts as a boundary, the official said. Liquor shops can be opened in commercial areas. Similarly, liquor shops cannot be opened in residential areas or on land meant for mixed use.
“There are over 60 municipal wards in the city which have non-conforming areas, and the problem is that liquor is often smuggled from neighboring areas and supplied here,” the official said. “This is an area where we can explore possibilities to address the issue starting with presence, but existing limitations hold us back.”
Another official said that as a result of the examination of the Excise Policy (2021-22), the department had to “maintain the status quo”, with some reforms being explored.
These include improving the quality of government liquor shops – some have been opened in areas such as Mayur Vihar, Patparganj and South Extension, the official said.
According to the official, the experience of buying liquor at many government shops includes no walk-in experience, absence of chillers, limited brands and untrained staff.
“The few stores we have experimented with address these issues and the way forward is to see if these models can be replicated going forward,” the official said. “At the moment, we are trying to work with whatever options we have.”
(Edited by Smriti Sinha)