State’s gift to distilleries okay | mumbai | Hindustan Times
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State’s gift to distilleries okay

mumbai Updated: Mar 11, 2010 01:46 IST
HT Correspondent

A petition against the state government’s decision to subsidise foodgrain-based distilleries was rejected in court on Wednesday.

Aurangabad-based activist, Chetan Kamble, had filed a public interest litigation (PIL) in the Bombay High Court expressing apprehension that the subsidy will cause losses to the state exchequer because most the directors of the distilleries were politicians and their relatives.

A division bench of Justice F. I. Rebello and Justice J. H. Bhatia, however, dismissed the PIL because it found nothing arbitrary and mala fide in the scheme promoting the manufacture of alcohol from jowar, bajra and maize.

The Cabinet had approved the scheme in May 2007. It was adopted a month later.

Distilleries were given a concession of Rs 10 per litre of wine produced, apart from subsidies ranging from Rs 25 to 50

crore towards establishment costs.

The state claimed the decision would support farmers from rain-fed areas, and foster development in rural areas of Marathwada and Vidarbha.

Kamble’s lawyer, Uday Warunjikar, argued that the manufacturing of alcohol from foodgrain was being promoted when there is shortage of foodgrain and hundreds of tribal children in the state were dying because of malnourishment.

The state government countered the PIL saying the decision was taken to meet the sudden surge in demand of alcohol for potable and industrial consumption.

From 2006-2007, demand for alcohol rose by 80 per cent.

Until then, 30 to 40 crore litres of alcohol were being produced annually from 18 to 20 lakh metric tonnes of molasses.

One-third of the alcohol was used for manufacturing liquor and the rest, for industrial

purposes, the government said.

The government also said that this will not worsen the shortage of foodgrain because only low quality jowar would be used to make alcohol.