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Tax money to boost liquor production

If the state government has its way, at least Rs 788 crore of taxpayers’ money will go towards enhancing liquor production in the state.

mumbai Updated: Jan 07, 2010 01:16 IST
Ketaki Ghoge

If the state government has its way, at least Rs 788 crore of taxpayers’ money will go towards enhancing liquor production in the state.

That is the amount of subsidy the government has promised food grain-based distilleries. The scheme, now stayed by the high court, was mooted in 2007 ostensibly to increase the production of jowar and bajra production and help small farmers in backward regions get better prices for their produce.

On the ground this would mean 21 distilleries, largely dominated by politicians, will get back ‘up to 150-200 per cent or Rs 37.5 crore to Rs 50 crore’ of capital invested by 2013.

“The main reason [for passing the scheme] then was that it would help small farmers in backward regions like Marathwada and Vidarbha to get better prices for foodgrains,’’ said Rural Development Minister Jayant Patil.

His party boss, Union Agriculture Minister Sharad Pawar, however recently criticised the subsidy though he approved of licences for foodgrain-based distilleries.

Out of 21 only seven distilleries are functional and have been granted a portion of the subsidy. The beneficiaries include distilleries controlled by Amit Deshmukh, son of former chief minister Vilasrao Deshmukh, Nationalist Congress Party politician Mansinh Fatesingh Naik and Dhavalpratapsinh Mohite-Patil, relative of former rural development minister Vijaysinh Mohite Patil.

“Cash subsidy for liquor is a ridiculous idea and it was pushed with a clear agenda to benefit a handful of politicians,” said a senior bureaucrat who did not wish to be named because the issue is controversial. “It’s good that the court has passed a stricture.’’

The scheme has come under criticism from various quarters. “This scheme can lead to a food versus liquor war in the long term add to spiralling food costs and shortage,” said Sachin Tiwale, a member of Nirman, a youth platform that has taken up cudgels against this policy. “If the government wants to help farmers, it should subsidise fertilizers, seeds and not liquor.’’