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Revenue loss to the state, windfall gains for liquor cartels

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Arvind Kejriwal’s Excise coverage 2021-22 is believed to be a case examine on how to siphon out authorities cash to liquor cartels inflicting enormous loss to the state income

AAPnomics: Revenue loss to the state, windfall gains for liquor cartels

Delhi Chief Minister Arvind Kejriwal. ANI

Celebrated British poet TS Eliot ends his 1925 poem, ‘Hollow Men’, with the traces: “This is the way the world ends, not with a bang but a whimper.” A celebration which got here to energy in Delhi using a recognition wave on the account of its claimed battle towards corruption, has simply signed a confession assertion on being corrupt.

For the first time in post-Independence historical past we’ve got an occasion of a minister criticising a proposal which he himself piloted in the cupboard. After the Delhi cupboard authorised the abandoning of Excise Policy 2021-22, Manish Sisodia was quoted as saying, “They (BJP) are threatening shopkeepers, officers with ED and CBI, they want legal liquor shops to be closed in Delhi and earn money from illegal shops. We’ve decided to stop the new liquor policy and ordered to open government liquor shops.”

That the metropolis’s finance minister was out of his wits on the problem was evident in a press release issued on the identical day, which stated, “We brought a new liquor policy to stop corruption. Before that, the government used to get around Rs 6,000 crore revenue from 850 liquor shops. But, after the new policy, our government would have got more than Rs 9,000 crore with the same number of shops.”

Can a authorities sound so helpless, can ministers from a authorities which sat on a dharna at Raj Niwas led by their Chief Minister Arvind Kejriwal would act so meekly on the ‘threats’ held out by the Delhi BJP leaders? The level to be famous is that the cupboard resolution to abandon Excise Policy 2021-22 got here following a police investigation into coverage and a faceoff with the Lt Governor who has sought a CBI probe in the matter, based mostly on a report by the chief secretary.

The report has alleged undue advantages to liquor vend licencees in lieu of “kickbacks” and “commissions” and use of the cash in the Punjab elections. The cupboard word based mostly on which the Delhi Cabinet led by Kejriwal took the resolution to abandon the coverage is a tell-tale doc on the extent of loss brought about to the authorities income.

Kejriwal’s Excise coverage 2021-22 is believed to be a case examine on how to siphon out authorities cash to liquor cartels inflicting enormous loss to the state income. The monetary planning of the Kejriwal authorities, which could possibly be referred to as AAPnomics, geared toward ‘income loss’ to the state and ‘windfall gains’ for cartels.

The cupboard word circulated throughout the assembly which deserted the excise coverage, underlining the “revenue shortfall”, mentions, “During the Q-1 of the current fiscal (2022-23), Rs 1,485 was realised which is 37.51 percent below the budget estimates for the current fiscal i.e. Rs 2,375 for Q-1. Even this includes Rs 980 crore of refundable security deposit.” On the problem of “windfall gains to license holders”, the word 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 crore per month.”

The cupboard word goes onto clarify intimately the ‘windfall gains’ for the cartels, saying, “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 per cent in case of whisky and to 87.25 per cent 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.”

In one other point out of strengthening cartels, the word mentions in paragraph 2.5, “The provision of discount on the liquor sales has given rise to unhealthy market practices and also contributed to weeding out weaker hands. In case the same continues during the extension period, there is likelihood of some more vendors surrendering their licenses, which will have adverse impact on government revenue.”

It didn’t cease right here. The cupboard word in paragraph 2.6 makes a selected point out about selling choose liquor manufacturers in the metropolis and creating monopolies. The word stated, “There have been instances of shortage of particular brands. In particular, premium imported brands have not been available for some time now as the sole wholesaler of such brands has stopped supplies. In Excise Policy, 2021-22, a particular brand registration is limited to a particular brand by a concerned wholesaler, which could lead to monopolistic tendencies.”

Chief Minister Kejriwal, days after boycotting a perform attended by the Lieutenant Governor, has now visited the Raj Niwas and his amenable statements thereafter clearly reveals that he’s making an attempt to purchase peace. With considered one of his ministers Satyendar Jain already behind bars in a corruption case, he now can’t afford to run roughshod over the ‘head of Delhi administration’.

However, the Lieutenant Governor’s constitutional obligation calls for that the probes ordered in the matter usually are not slowed down. Delhi wants redemption, the Lieutenant Governor is finest positioned to ship it.

The author is an creator and president, Centre for Reforms, Development & Justice. Views expressed are private.

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