Delhi was among a few states and Union territories that had a higher age bar even as the rest of the country had moved on. In what can prove to be a major game-changer, the government has also announced that it will exit the liquor business.
These two are among a host of decisions, including checking the liquor mafia, ensuring quality control, transforming the liquor buying experience of customers and, finally, increasing the excise revenue by 20% in the first year, announced by the AAP government as part of its new excise policy on Monday.
In 2019-20, the state government earned Rs 6,574 crore from liquor, which is about 9.5% of the total estimated revenue, as mentioned in the budget, of Rs 69,000 crore.
The policy was approved by the Arvind Kejriwal government on Monday and will come into effect after it is notified in a couple of days.
Deputy chief minister Manish Sisodia, who announced the new policy, said the government will not run liquor shops anymore (currently it runs around 60% of these outlets) because it is not the job of the government to sell liquor. No new liquor shops will be opened, Sisodia said, pointing out that since 2016, no new outlet has been opened in the city.
“The excise reforms announced today will be a major blow to the liquor mafia in Delhi. The liquor mafia runs around 2,000 illegal shops which results in tax evasion of Rs 1,500 crore to Rs 2,000 crore,” said Sisodia. “The mafia and their political patrons are rattled and will do everything to obstruct these reforms. The AAP government has ended mafia raj in many sectors like education, water, elect(ricity), health etc and we are committed to reforming this sector too,” CM Kejriwal tweeted.
Sisodia said new rules will be introduced to make sure that people who are under the age of 21 don’t get access to an establishment that serves liquor without supervision. “The international concept of ‘age gating’ will be introduced to make sure that there is no underage drinking in Delhi and an SOP will be made along with the industry,” Sisodia said at a press conference.
The government will also establish a quality checking mechanism to ensure that the liquor sold in Delhi is of international standard. As the Delhi government exits the retail business, it will allow private players to fill the vacuum. Each private shop will be a minimum of 500 square feet in size. The main door will not open on to the road. Buying liquor from government retail shops, which is currently an unpleasant experience, is likely to change.
The reforms are based on the suggestions of a group of ministers constituted by Kejriwal to study the recommendations of an expert committee, over 14,000 public suggestions and other factors.
The policy aims at equitable distribution of liquor. Currently, some areas of Delhi have a higher concentration of liquor shops than others, which creates space for the liquor mafia to operate. “Delhi has 272 wards, out of which 79 have no liquor shops. Around 45 wards have just one shop. It is also to be noted that 50% of liquor shops in Delhi are present in just 45 wards. It clearly shows that in Delhi, liquor sale distribution is very unequal. The maximum revenue is coming from 189 liquor shops in just 46 wards. This also shows that from other areas, misappropriation of revenue is taking place,” said Sisodia.
The excise department has been cracking down on the liquor mafia. In the past two years, it has recovered around seven lakh bottles of illegal liquor, seized over 1,000 vehicles, filed 1,864 FIRs against people involved in the illegal liquor trade and arrested 1,939 people.
“Delhi has around 850 registered liquor shops, but people say that more than 2,000 are run by the liquor mafia. To stop all these irregularities and to defeat the liquor mafia, we have come up with this new excise policy,” said Sisodia.
He pointed out that more than 60% of the liquor shops come under the state government. “We have also noted that the 40% private liquor shops give more revenue than the ones owned by the state government. The government will get out of the retail liquor business because of this revenue leakage,” said Sisodia.
It is common knowledge that lesser known brands are promoted by many government liquor shops where the popular brands go, quite mysteriously, out of stock. This is in lieu of commission and incentives while the customer gets short-changed. Use of duplicate barcodes is another malpractice that leads to revenue loss.
“We have also decided that in Delhi only quality liquor will be distributed. The Delhi government will set up an international standard checking system by which we will keep a watch on low-quality liquor and stop its distribution. An international quality lab will be set up to test the quality of liquor coming into the city,” said Sisodia, adding that the government has also decided to merge various licences and simplify licensing rules to ensure ease of doing business.