Delhi Budget: Excise revenue far from target
The Delhi government, in its 2022-23 Budget estimates, had estimated that it will earn ₹9500 crore from the excise department. But the government collected only ₹6500 crore
The Delhi government, in its 2022-23 Budget estimates, had estimated that it will earn ₹9500 crore from the excise department. This projection was based on the 2021-22 excise policy, which looked to revitalise the city’s flagging liquor business, and aimed to replace a sales-volume based regime with a licence fee-based one for traders.
One year down the line, the government expects to collect only ₹6500 crore from state excise revenue — nearly a third less than what it expected, according to revised estimates tabled in the Delhi assembly by finance minister Kailash Gahlot on Wednesday. In the Budget estimates for 2023-24, the government has projected an excise revenue of ₹7365 crore, which too is lower than the 2022-23 estimates.
The ₹78,800 crore Budget that the Delhi government has proposed for 2023-24 will mainly be financed from its own resources, including ₹53,565 crore from taxes. One of the most important components of this is excise revenue.
The state has blamed the massive projected loss in excise earnings to the scrapping of the 2021-22 excise policy following lieutenant governor VK Saxena recommending a Central Bureau of Investigation probe into alleged irregularities in the regime. Earlier this year, the CBI arrested former deputy chief minister Manish Sisodia over alleged irregularities in the policy, and the AAP leader was arrested by the Enforcement Directorate this month over alleged money laundering in connection with the case.
A Delhi government spokesperson said, “If we had implemented the new policy, the revenue would have crossed ₹9500 crore.”
In his Budget speech on Wednesday, Gahlot said the Delhi government is committed to augmenting excise revenue, and will regulate liquor in a more effective manner.
“The government has restored the excise duty-based regime from September 2022. The hospitality industry (hotels, clubs and restaurants) are significant contributors towards the improvement of the state’s overall economy by providing employment, tax generation and promoting tourism,” Gahlot said.
Under the current excise regime, retail liquor is sold in the city through four Delhi government corporations, with no private players allowed. The Delhi government recently extended the policy by six months till September 30, and has asked the excise department to frame new rules, so that the Capital can compete with neighbouring cities like Gurugram and Noida.
Industry experts, meanwhile, said the excise regime in Delhi is shadowed by uncertainty. Vinod Giri, director general of the Confederation of Indian Alcoholic Beverage Companies (CIABC), said, “The alcohol industry can progress only when they function in a stable policy environment. The stability helps in proper business planning. The short-term extensions do ensure business continuity, but uncertainty is set to hit investment and employment opportunities in the industry.”
Delhi BJP working president Virendra Sachdeva said, “Chief minister Arvind Kejriwal should come forward and state why repeated economic changes were made in the liquor excise policy and why it was withdrawn after the CBI inquiry started.